Posted on 02/08/2010 2:57:43 AM PST by Straight Vermonter
As the Vermont legislature struggles to find $150 million worth of budget cuts this year, an attempt to roll back two tax increases is running into opposition. At issue are the capital gains and estate taxes, primarily affecting upper income Vermonters. But there's evidence that the two taxes are driving wealthier residents out of state to places like Florida.
The Vermont senate Economic Development committee met at Burlington city hall last week to hear testimony on repealing last year's increases on the state capital gains tax and the estate tax. Although farms were excluded from the death tax -- as critics call it -- the two taxes together raise tens of millions of dollars a year. And tax advisor Rick Wolfish told the panel the higher taxes are driving out high-income Vermonters.
"That is exactly what is happening," he told the panel, "that people are leaving the state. And CPAs and professionals are advising them."
Last year, the legislature lowered an exclusion on the estate tax from $3.5 million to $2 million. Tax experts say it's not just big Wall Street investors who get hit. Any Vermonter who built up a small business can get hit at anything over two-million of net assets, upon his or her death.
Wolfish said, "Under current law, if a taxpayer is considering the sale of a business, why not move to another state before the sale and pay no Vermont on the sale whatsoever?"
Real estate developer Ernie Pomerleau agreed. He said, "You know, there are people who can survive this, there are people who just say enough is enough. I can live someplace else."
Pomerleau has invested millions in Vermont development projects, creating jobs in the process. He says he'll never leave Vermont -- "I'll die with my boots on here," he said. But Pomerleau said he knows others who already have left. "I know three dozen colleagues that are gone," he told the senators. "And I know you'll hear 'one comes in, one goes out.' The ones that go out have been here for forty years creating jobs, philanthropic, part of the energy of this community."
The legislature raised estate and capital gains taxes to help close a looming budget deficit as Vermont was losing twenty-thousand jobs -- along with a lot of income tax revenue. One Progressive policy advisor says the state simply cannot afford to restore a capital gains tax break. Doug Hoffer testified, "We have four years of data... from when the capital gains exclusion was adopted, in those four years it cost us over $150 million. Now, the highest year was $51 million in a single year. That's a big hole to fill."
But supporters of the tax repeal say the question comes down to whether high state taxes are killing the goose that laid the golden egg. Still, the fact that the economic development committee is the only legislative committee to take up the repeal indicates how difficult that is likely to be.
pretty scenery, socialist politics
the sooner everyone with money and a brain departs, the sooner the socialist paradise will collapse
“One Progressive policy advisor says the state simply cannot afford to restore a capital gains tax break.”
They are always saying that the govt can’t afford tax cuts. What utter BS!
Socialist economic morons!
bump
Estate taxes should be outlawed in the Constitution.
They should apply for receivership from NH.
I live in a high tax blue area of a blue state where the government periodically sees fit to Nazi down on my gun rights. I make a decent living, and of course pay a lot of taxes. The things that keep me in this nightmare hell is social ties, family, and employment. Some day even that’s not going to be enough, and I’ll take my white, well paid, law abiding @$$ to a state that appreciates the kind of citizen I am, and leave this hell hole to the welfare recipients and the politicians who are killing it. I have two words for these people, and it’s not “Let’s Dance”.
ML/NJ
I did the same in 2007 and saved $42,000 in Ohio taxes that year alone..........
Unless the State of Vermont (and others) come up with the equivalent of the recent Federal “exit tax” where they tax your “un taxed” assets upon departure as though you actually had a sales transaction. I’m sure someone up their is thinking about that.
>> pretty scenery, socialist politics
That describes Kalifornia pretty well also.
Socialist economic morons!
Vermont reaps what it sows when they elected the socialist Bernie Sanders to the US Senate.
Why doesn’t Vermont just pass an ice cream tax on those two wonderful progressives known as Ben and Jerry???
They are losing $30 million plus per year, but they can’t afford to change it. That’s like saying we make them for $1 and sell them for $0.90. We make up the difference on volume.
We used to have the opposite. People were charged sales tax on their cars when they moved INTO the state. It didn’t survive a court challenge.
Hey Vt: told you so....
“That’s like saying we make them for $1 and sell them for $0.90. We make up the difference on volume.”
That, ny friend, is exactly why the govt needs to keep their $hithooks off of all things economic.
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