(This is a quick briefing; more detail to come later today.)
It was a case of dueling press conferences this morning at the Statehouse. Gov. Shumlin’s weekly presser had been set for 11:30 a.m. And then, in a nice bit of stagecraft, Progressive lawmakers scheduled a presser for 11:00 — immediately before Shumlin, giving the press corps plenty of time to take in both.
And ensuring that Shumlin’s tax plan would be center stage, whether he liked it or not.
The Progs unveiled a package of tax proposals that would raise $50 million in new revenue, mainly from Vermont’s top earners. The measures include reclassifying capital gains as ordinary income for tax purposes, extending sales taxes to items of reducing the exemption in the estate tax from $2.75M to $1M, bringing it in line with neighboring states, and taxing the entire income of the top two tax brackets at the full rate. (Currently, a top earner’s earnings are taxed at a tiered rate — the first dollars at the lowest rate, etc.)
They offered a compelling chart prepared by the state Department of Taxes, showing that income growth over the last decade has been heavily concentrated at the top end. Those below the median have seen their incomes decline or, at best, stagnate. For instance, those earning over $1M have seen a 136% rise in income, while those earning less than $30,000 have lost ground.
Hence, their argument that the wealthy can afford to pay a little more to create a more equitable society.
For his part, Shumlin reiterated his call for enaction of his entire package of new spending and revenue sources — including the controversial cut in the Earned Income Tax Credit. He called the current system “cruel” because it traps people in poverty, while his plan is truly “compassionate” because it would help raise people out of poverty.
After the jump: That Tax Department chart. It’s quite amazing.
Here is the chart showcased at the Prog presser, which vividly illustrates the growing income gap in Vermont: