The Vermont Legislature will reconvene on Tuesday for the second half of the 2019-2020 biennium, and hand-wringing will recommence over whether we dare, in Vermont, raise additional revenue for necessary funding programs by increasing taxes on the wealthy.
There is an excellent reason to do so. As the famous outlaw Willie Sutton was reported to have said when asked why he robbed banks: “Because that’s where the money is.” (It’s probably an urban legend; Sutton denied having said it, but he capitalized on the quip, whatever its origins, by publishing a book in 1976 titled “Where The Money Was.”)
In Vermont, as recent reports cited in this newspaper have made clear, the money lies substantially in the bank accounts of the wealthy among us. The economy, a tax structure that favors capital gains over wage income, and the Trump-GOP tax cuts of 2017, have benefited upper-income Americans — Vermonters included — far more than middle-, working-class, and lower-income taxpayers.
And, importantly, the Sutton quotation is inapplicable in an important way: taxes are not a theft of wealth; they are each taxpayer’s contribution toward an infrastructure that benefits us all, the wealthy very much included. Taxes are and should be graduated, so that wealthier people pay more. What’s clear is that that curve needs to be — and ought to be — steeper than it is, so that the wealthy contribute a greater percentage of their income to the common good than they do now. They’ll still have plenty left over, and will benefit from an improved and more stable economic environment, and social and physical infrastructure.
Unfortunately, calls for the wealthy to pay higher taxes are often perceived to be shrill, hostile and divisive. Admittedly, they often are, particularly as Democratic presidential contenders vie to condemn “billionaires!” in the harshest terms possible.
Unquestionably, the billionaire class deserves a measure of vilification. Though individuals are progressive and well-meaning, as a class they are the embodiment of a wealth gap grown obscenely, and untenably, large in the U.S. The stark, brutal division between people whose wealth exceeds that of some foreign countries, and the rest of us — but especially the estimated 40% of Americans who live in poverty — could spell the end of this country (in any number of ways) if it’s not rectified.
What we mustn’t do, though, is be afraid of the rich, and this seems to be the reaction of some legislators and policy advisors in Vermont. Their concern probably is tinged by the tenor of the national debate over income inequity. Or maybe it’s innate favoritism toward the wealthy, and the wish not to make waves.
With the new legislative session approaching, State. Sen. Anthony Pollina, P/D-Washington, plans to introduce a Vermont version of the “Green New Deal” proposed at the federal level by U.S. Rep. Alexandria Ocasio-Cortez, D-N.Y., and U.S. Sen. Ed Markey D-Mass. Like them, Pollina envisions an expansive five-year program in which the state would invest in weatherization, energy-conservation improvements, and renewable heating systems for homes, help develop an infrastructure to support and encourage electric-vehicle usage, and design and implement a more energy-sustainable public-transit system. The benefits would come in reducing carbon emissions and people’s energy costs, and stimulating Vermont’s green-jobs sector.
It would be largely financed by $30 million generated by a tax increase on what Pollina says would be the wealthiest 5% of Vermont’s taxpayers. And, he points out, it would cut only minimally into the benefits they received from the 2017 Trump tax cuts.
Already, rumblings can be heard from legislators and the governor’s office, alarmed that those targeted wealthy Vermonters would pick up stakes and leave.
They seem ignorant of, or unpersuaded by, conclusions published last summer by Vermont’s respected Public Assets Institute, which asserted that the wealthy are a lot less flighty and capricious — and yes, perhaps more loyal — than fidgety policymakers believe. Citing IRS statistics, the institute announced that (as one study was titled), “Most Vermonters Stay Put.”
“As for high-income people, those with annual incomes of $200,000 or more,” the institute concluded, “the IRS data show that more of them moved into Vermont than out every year the data have been collected — 2012, 2013 and 2014.” In fact, it said, “(O)ver the last 20 years the average income of those coming into Vermont has exceeded the average income of those leaving.”
The sky will not fall if we ask those folks to kick in what Pollina estimates would be around $3,000 each more in taxes for five years. They’re Vermonters by choice and they’d probably be glad to do it. Frightened lawmakers need to get a grip.