By Donald Koch

Democrats think that Vermonters have a lot of problems that only the government can solve.  Their solution is always the same: throw money at it!  That raises the question of where the money will come from, and once again their answer is always the same: taxes!

Here are a few of the tax proposals that the legislature under Democrat leadership has considered to one degree or another.

Just in this past session, the House Ways and Means Committee gave consideration to a tax on “unrealized gains.”  What does that mean?  Well, suppose you buy one share of IBM for $200.00; the price happens to go up to $300.00, so an unrealized gains tax would then charge tax on the “gain” of $100.00, even though you haven’t sold the stock and might not have the money from other sources to pay the tax!  Of course, stock prices are easy to determine, but an unrealized gains tax might capture other types of property, such as real estate or business enterprises; valuing the “gains” on properties like this would likely require an appraisal—on an annual basis!  And suppose that share of IBM goes down to $100.00 the next year; would the Tax Department issue you a refund?  It is suggested—it’s always suggested in order to make the proposal more acceptable—that the new tax apply only to higher income taxpayers.  The trouble with this is that after a few years, when even more revenue is needed, the threshold for taxation gets lowered, resulting in more people being subject to the tax.  This is an idea that should be dead on arrival in any committee to which it is referred!

Another idea that is floated on a regular basis but has, for the most part, escaped adoption is expanding the base of the sales and use tax.  We currently pay 6.0% on the cost of goods purchased in Vermont (or 7% in some so-called “local option” communities.)  But we do not pay sales or use tax on services, unless the service is so intimately connected with the goods sold that it would be impractical to charge for them separately. Frequently, those on the hunt for more tax revenue suggest that the sales and use tax law should be expanded to charge the tax on services—think attorney fees, physician and hospital charges, automobile repairs and maintenance, and the like.  How about making the person who cuts or styles your hair a tax collector?  Or maybe the neighborhood kid who cuts your lawn?  At the urging of a Republican governor about 30 years ago, Florida tried this “services tax.”  It was so unpopular that the governor had to call a special session of the legislature to repeal it, and the governor was nevertheless defeated at the next election!  That’s how bad this idea is; why it keeps coming up for discussion is east to explain: It would raise a lot of money!

A third more-likely-to-pass tax is an increase in the .44% payroll tax that took effect this July in order to support child care for working families.  The advocates for child care have made it clear that they think the work that was done during this past two years is only a start, with much more to do!  The reasons why child care has become so dreadfully expensive can be debated, but not here, where the focus is on taxes.  The fact is that there was no great public outcry when the payroll tax went into effect on July 1, so advocates and many legislators may feel that there is room to increase this tax.  Stay tuned.

These are just three of the taxes that the Democrats in the legislature may attempt to pass in the coming biennium.  There is no end to the list of “problems” that they want to solve.  There is nowhere enough money in the till at present to solve them.  The answer, as always, is to raise more taxes!

Do you wonder why our young people are leaving Vermont for better opportunities in other states?  You may be a lifelong Democrat, but things under the Democrat supermajority have gotten so far out of control that this year you may want to elect more Republicans to the legislature.  Please consider it!

Donald Koch is a lifelong resident of Barre Town, and is currently chair of the Washington County Republican Committee.  He, along with Michael Deering II of Barre City, and Mike Doyle of Montpelier are running for Senate to represent the Washington Senatorial District, which includes all of Washington County, as well as the towns of Braintree, Orange and Stowe.  Donald can be reached by email at kochforvermont@gmail.com, and his website is https://www.donaldkochforvt.org