by Don Keelan
Why am I not surprised to have read in Seven Days that 23 influential and financially successful Vermonters are volunteering to pay more taxes to the State’s treasury? Specifically, the 23 had their letter included within the Seven Days March 19, 2024 article: “A campaign (is) seeking to create a three percent tax surcharge on earnings over $500,000.”
The announcement was more than just a letter; it is a “movement” called Fair Share for Vermont, working from the left-of-center nonprofit Public Assets Institute’s headquarters in Montpelier.
As noted in its letter, the basic premise of the Movement is that giving more to the State government can better address essential and critical functions.
Anne Wallace Allen, the author of the article for Seven Days, reported what Duane Peterson, one of the 23 signers, had to say, “Charitable giving doesn’t support basic human needs such as food, housing, and health.’ Peterson further notes, ‘Societal needs are better identified by elected representatives than left to the whims of philanthropists.”
I found Peterson’s comments revealing. For one thing, in my area of southwestern Vermont, nongovernment organizations are on the front lines when it comes to providing food, housing, and healthcare to those in need.
The State agencies, which one would think are on the front lines, are not. The State has divorced itself from directly dealing with the fund recipients for housing, health, and food. Decades ago, the State subrogated being “hands-on” to numerous nonprofit agencies throughout the State.
Local agencies, such as United Counseling Services, Meals on Wheels, Southwestern Vermont Council on Aging, Vermont Food Bank, Shires Housing, Southwestern Vermont Medical Center (SWVMC), and others are the nonprofit organizations that know first-hand what is taking place. The State acts as a super-conduit, obtaining billions of dollars from the federal government, stripping off its share for bureaucratic expenses, and then passing the balance to the State’s NGOS.
It turns out that each of these NGOs is also highly dependent on “the whims of philanthropists.”
Another aspect of having philanthropists’ support is the financial assistance they provide to the area’s cultural infrastructure.
Bennington County is far from the size of Chittenden County’s area or population. Nevertheless, it has seen the results of direct philanthropic support over the years.
Recently, multi-million dollar gifts supported local institutions such as the Manchester Community Library, Southern Vermont Arts Center, Robert Todd Lincoln’s Hildene, Burr Burton Academy, Bennington College, and SWVMC. I sincerely hope for philanthropists’ commitment and goodwill and nothing else to characterize these donations.
The supporters of H-828, the bill that proposes to add a three percent surcharge tax to the Vermont Tax Code, are the Public Assets Institute, the ACLU, the Vermont Teachers Union, and, more recently, Fair Share for Vermont. In lobbying for additional taxes, they have no cause to disparage those with wealth. Senator Sanders has done his share of this for over 40 years.
I will submit two other points regarding taxes: one is my opinion, and the other (which I have noted in the past) is by the late Justice Learned Hand.
Numerous taxpayers have taxable income and pay little or zero dollars in taxes. Much of this can be directly attributed to what is referred to as tax credits. As long as the Tax Code, meant to raise revenue for the government, is now being used for social, environmental, historical, welfare, and economic purposes, taxpayers, individuals, and corporations will take full advantage of tax credits and deductions as they should.
The late 2nd Court of Appeals Justice Learned Hand wrote in 1947, in Comm’r v. Newman, 159 F.2nd 848 (2nd Cir.1947):
“Over and over again courts have said there is nothing sinister in so
arranging one’s affairs as to keep taxes as low as possible. Everybody
does so, rich or poor; and all do right, for nobody owes any public
duty to pay more than the law demands: taxes are enforced exactions,
not voluntary contributions. To demand more in the name of morals is
mere cant.”
What Justice Hand noted 77 years ago continues to be applicable today.
Mr. Peterson and his 22 other cohorts should be aware that the State government is little involved in executing services related to food, housing, and physical and mental health. Your contributions, not more taxes, will go further by giving directly to the NGOs.
The author is a U.S. Marine (retired), CPA, and columnist living in Arlington, VT.