Art Woolf’s latest tax rant was in the Freeps 11/04/15. I keep seeing it posted and shared on Facebook. It’s great fodder for those who want to grouse about taxes, but don’t actually read the article to draw their own conclusions. I read Mr. Woolf’s analysis of Vermont’s per capita tax collections and came to different conclusions than he did.
Let’s assume his data is right. A population of 626,000 Vermonters were taxed (in 2013) $3.4B, meaning $5,423 for every man woman and child. National average per capita is 10.4% of income and Vermont taxes 12.1% of income. So, the state of Vermont collects 1.7% more tax than the national average. I’ll accept that much, even if the chart Mr. Woolf included has a chopped Y-axis to make the difference in Vermont collections appear to be higher than the national average. Taking a page from the Fox News Graphics Dept. are we?
1) Vermonters Don’t Pay It All
Mr. Woolf rightly points out a major flaw in his own methodology. Many of Vermont’s taxes are paid by folks who visit our state and pay sales tax, rooms and meals, and gas tax. Out of state residents own homes and pay property taxes.
2) What About Fees?
When I was at a National Council of State Legislatures meeting a couple of years ago a politician from NH joked that their state motto was “Live Fee or Die”. NH is able to collect tolls on Interstates because of higher traffic volumes and their fees (see DMV schedules) are higher than Vermont’s.
3) State and Local School Taxes
Vermont has a pretty novel statewide property tax system to fund public education. It levels the playing field so poor towns don’t have dramatically lower investments in education for their students. According to the NEA for the 2014-2015 school year 95.3% of Vermont’s school spending was collected by the state and only 33% came from the state in New Hampshire. We do spend more per pupil, no doubt and there are ways we could cut school costs (see my post on Act 46). We also have world-class public schools across the state. If Mr. Woolf compared apples to apples I bet he’d find that property taxes, when State and Local were summed would not be as disparate as his methods would have you believe.
4) Published versus Effective Tax Rates
Are we talking about the effective rates that Vermonters actually pay, say after we get homestead property tax adjustments? Or is Mr. Woolf using the raw dollars collected by the state to do his math, regardless of whether or not some of those dollars are returned to towns and taxpayers? I can’t tell.
These are just the things I could think of off the top of my head. I think the bigger problem than having state taxes being 1.7% higher than the national average is that lower and middle income Vermonters are paying a bigger share than they should be. That’s really why the “affordability crisis” and these anti-tax rants appeal to people so much. If we had a truly progressive tax structure then Vermont would be in much better shape. We think of Vermont as being a progressive state, but our tax structure isn’t really all that progressive according to the Public Assets Institute.
Art Woolf blithely asserts that if Vermont just lowered its revenues by a billion dollars, things would keep going on the way they have been. I’d love to hear a list of the cuts he’d make in our state budget. Would he close schools, lower the number of insured Vermonters, or maybe let our roads and bridges crumble like they do in New Hampshire? It would hit Vermonters pretty hard to cut that much out of the budget.
For the most part I think New Hampshire just makes up the difference in their low state taxes with higher local taxes and fees. I’d be happy to live in Vermont, even if I really did have to pay 1.7 pennies per dollars more to the state. In reality though, I don’t think I pay that much more. Mr. Woolf is just counting on people to accept his methodology and join him in lamenting about taxes. It will always get you a few votes, but it doesn’t solve a darn thing.