On $26.1 million net increase, divided Senate votes to raise some taxes, cut others

Posted On Jan 1 2021 by

first_imgA wildly fluid package of tax increases that crossed party allegiances was passed by the Senate Wednesday by a thin 18-12 vote. The slew of tax changes would result in a increase of $26.1 million in new revenues. A $4.55 billion budget then breezed through the Senate on a 27-3 vote. Senate President Pro Tem Peter Shumlin pushed the tax package through the upper house despite objections from deep within his own party. Among the tax changes are across-the-board decreases in the income tax; limiting the capital gains exemption to $5,000 from 40 percent of value (to offset the income tax cuts); new taxes on satellite television services and digital downloads; re-imposing of a sales tax on clothing over $110; and increases in liquor and tobacco taxes. The budget includes increase in spending in part because of federal stimulus money being pushed into some programs, but in some cases, like unemployment insurance, are increasing just as major broad-based taxes (income, sales, transportation, education property) have suffered since last summer.Amendments to the Senate bill, before it is finalized, will be offered today. Even if passed as is, the Senate tax package will meet a much simpler House version in conference committee where many of the more controversial aspects of the Senate bill will likely be stripped out, namely the cutting of the income tax at the highest marginal rate and the clothing tax. The budget also could be cut to reduce the need to increase taxes.The tax package as is would lower incomes taxes for 84 percent of Vermonters and would drop Vermont’s top marginal rate from first to fifth nationally.The legislature has cut $70 million from the state budget since January 2008 and the FY10 budget includes an additional $28 million of cuts.last_img read more