GOVERNOR PHIL SCOTT LAUDS PASSAGE OF STATE INCOME TAX REFORM PACKAGE, WHICH WILL SAVE VERMONTERS $30 MILLION
Montpelier, Vt. – At a press conference Thursday, Governor Phil Scott celebrated passage of his Working Family Taxpayer Protection Act – a state income tax reform package. He was joined by Tax Commissioner Kaj Samsom, Director and Tax Economist Doug Farnham, Research Statistician Jake Feldman and Research Economist Andrew Stein, who helped develop the proposal.
The reforms, which were proposed by the Administration and passed by the Legislature in response to changes in federal law, lowered State income tax rates for all taxpayers. In conjunction with the elimination of the income tax on social security benefits for low and middle-income Vermonters, these reforms prevented a $30 million tax increase on working families and provided tax relief for many retirees in Vermont.
A transcript of the Governor’s remarks from today’s press conference are included below. For more information on the Administration’s proposal, visit: http://governor.vermont.gov/press-release/working-family-taxpayer-protection-act.
After the Federal Tax Cuts and Jobs Act was passed in December, our team at the Department of Taxes – working with a number of agencies and departments – got to work evaluating the impact on Vermonters.
What their analysis found was that while these changes will lower federal taxes for most Vermonters, due to the complexity of our system and its connection points to the federal calculation, it was going to, inadvertently, raise state income taxes on Vermont taxpayers.
If we had taken no action or made no changes to our laws, about half of Vermonters – primarily working families with kids – would have paid a net total of $30 million more in Vermont income tax.
This team behind me [Tax Commissioner Kaj Samsom, Director and Tax Economist Doug Farnham, Research Statistician Jake Feldman and Research Economist Andrew Stein] worked together to develop a smart, simple plan, that not only protected Vermonters from this increase, but also achieved many additional benefits in the process.
I’m pleased to be here today to highlight the fact that this plan, for the most part, has been enacted into state law.
Its passage – in conjunction with our work with the Legislature to eliminate the income tax on social security benefits for low and middle-income retirees – provided $30 million of income tax relief to Vermonters.
This is important because we not only cut income tax rates across the board for all payers, but it also put Vermont in a stronger competitive position relative to neighbors, like New York.
Further, the changes simplify our tax system and maintain our progressive tax code, where the wealthy pay more than those with low and moderate incomes. This proposal was revenue-neutral and ensured working families with children saw the full benefit of the federal tax reductions, without requiring cuts in state spending. Additionally, it greatly simplifies Vermont’s tax calculation, lowers rates, and encourages charitable giving by all taxpayers while adding stability in revenue collection.
I want to thank Commissioner Samsom and his entire team for their hard work on this smart proposal that will benefit working Vermont families for years to come.
As well, I want to thank Administration Secretary Susanne Young, who couldn’t be here today, Deputy Secretary Brad Ferland, Commissioner Adam Greshin, and the Legislature – the House Ways and Means and Senate Finance Committees – for their work in ensuring the passage of this proposal.
While we have more work to do, this relief, coupled with elimination of the tax on social security benefits for many Vermonters, two consecutive years without raising a single tax and fee in the General Fund and level property tax rates for residential payers are critical steps to helping Vermonters keep more of what they earn and move up the economic ladder.
As I continue to work to make Vermont more affordable, grow the economy, and protect the most vulnerable, these steps help us move closer to each of those goals.