But Vermont lawmakers routinely seek out bad information if it confirms their bias.
by Rob Roper
Confirmation bias is something we all need to be wary of. We all tend to look for things that support our presupposed notions. It’s a dangerous psychological trap that it takes some intellectual discipline to combat. It requires listening to and understanding counterarguments. This is not a discipline practiced very often – if ever – in our State House these days.
Case in point happened on February 8th in the Ways & Means Committee when Cristobal Young from the Cornell Department of Sociology was called in to testify about his book, The Myth of Millionaire Tax Flight, in a flagrant attempt to provide some confirmation bias to the committee’s desire to pass a “millionaire’s tax” – a 3 percent surcharge on Vermonters’ incomes over $500,000 (H.828).
Young’s presentation, in a nutshell, was that, yes, high taxes will chase away some high earners, but it’s an insignificant number. So, go for it! At his conclusion, committee chair Emily Kornheiser (D-Brattleboro) gushed, “Thank you very much, you’ve made an incredibly, I don’t want to say compelling case because you’re just sharing the research with us, but I really appreciate your sharing the data with us …. I think in our work it’s really hard to separate anecdote from data, and you have laid out the data incredibly well.”
Yeah. About that. Here’s the problem with the research and the data….
Young’s book was published in 2017, before Covid lockdowns and the explosion of remote work options. And, before the 2017 federal tax reform law that ended State & Local Tax (SALT) deductions for federal taxes, effectively raising taxes on wealthy individuals in high tax states – like Vermont – and cutting them in low tax states like Florida, Texas, New Hampshire. The SALT reform forces those who choose to live in high tax states to bear the cost of that tax burden themselves rather than pass it on to federal taxpayers across the country.
The data presented in Young’s slide show was from 1999-2011, 2000-2003, 2005-2014 – when the internet was in its infancy. And, it was primarily focused on New Jersey, where working millionaires are largely tethered to the New York financial markets, and California with Silicon Valley and Hollywood. So, let’s just say that this forty-five minutes of committee time was, notwithstanding Chair Kornheiser’s early Valentine’s expressions of schoolgirl love, largely irrelevant. Except for the fact that it served as confirmation bias for the tax and spenders.
A more up to date study done in July 2023 by the Washington Center for Equitable Growth – hardly a bastion of right wing ideology – echoed some of Young’s conclusions that high earners tend to be more firmly rooted in the communities where they are generating their wealth (ie. New Jersey based Wall Street millionaires, who, not for nothing, are fleeing even higher taxes in New York City) and can’t realistically pull up stakes. Other factors that keep wealthy people in place and putting up with abusive tax policies are children in school, friends, family, and, let’s face it, moving is a hassle. All true.
However, they did note, “… the [2017 SALT] tax reform did not cause greater numbers of millionaires to migrate. But for those already moving anyway, tax reform played a role in where they moved. In other words, taxes do not affect the decision to move, but, conditional on moving, they do influence the choice of destination—making low-tax states incrementally more attractive.” Vermont is a “destination” state. Which begs the question, are the millionaires in Vermont people who make their money here and are “stuck”, or people who moved here with their money? Church Street not being Wall Street, I highly suspect it’s primarily the latter. And thus, by implementing a millionaire’s tax will we be discouraging wealthy retirees or now-free-to-be-remote working millionaires from choosing Vermont as a destination. This would be bad tax policy for us.
The Washington Center’s research also obliterates Young’s stale assumptions about the “stickiness of places” by pointing out, “the pandemic disrupted almost every socioeconomic factor that ties people to places. Offices and schools closed their doors and moved online. Urban amenities were shuttered. And face-to-face contact became a public health problem. Many homes and apartments felt too small for shelter-in-place orders. The pandemic was an occasion to rethink the geography of work and life, especially for top earners, who could work remotely from anywhere.” Uh, yeah. That.
Young also shared a state-by-state map of where millionaires are concentrated, and one of the states painted with a very light shade of green, a very low percentage of population, was Vermont. So, while it is true some, perhaps many, millionaires may be stuck in places with high taxes because the benefits of economic opportunity for them outweigh the costs, Vermont isn’t one of those places. A point entirely ignored by the presenter and the committee.
Lastly, Young advised lawmakers to stick it to older, wealthier taxpayers and focus on policies that attract young, mobile workers who will be the millionaires of tomorrow. All well and good regarding the young and productive, but, as CNBC points out in Young, rich workers are fleeing New York and California – here’s where they’re going, the states attracting these folks are places with tech and/or financial hubs, which Vermont does not have, and/or low/no income tax states like Florida, the Carolinas, Tennessee, and Texas, which Vermont is not. Legislators can’t change that first factor, but they can change the latter! Or not.
So, if we don’t have a lot of millionaires to begin with in Vermont, they are less “stuck” here, and they already provide a disproportionately high proportion of our income tax revenue, how many can we really afford to lose? And how many can we afford to repel? We need good information to form good policy, and our elected representatives are not seeking that out. Too often they actively avoid it.
RELATED: For a more in depth look at who will actually be paying this “millionaire’s tax” should it pass, see my earlier article, When Is Someone Paying More Than Their “Fair Share?” Spoiler alert: it ain’t millionaires.
Rob Roper is a freelance writer who has been involved with Vermont politics and policy for over 20 years. This article reprinted with permission from Behind the Lines: Rob Roper on Vermont Politics, robertroper.substack.com
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Categories: Commentary, State Government
Anyone who thinks ‘millionaires’ are going to sit idly by and pay higher taxes to fund Vermont’s corrupt dystopia is delusional. I know several wealthy people moving across the CT River to NH to avoid VT taxes as we speak. It’s already happening.
However, at the risk of going off-topic: and speaking of ‘confirmation bias’ – a euphemism for self-delusion – consider Elaine Collins, a 32-year public school educator and current North Country Supervisory Union superintendent, who recently explained in the VT Public’s ‘On Point’ program, that “Schools have been asked in the last 10 to 15 years to do much more than school our children. And that is really where the increase of education spending is coming from.”
https://www.vermontpublic.org/local-news/2024-01-26/capitol-recap-lawmakers-retooled-vermonts-school-funding-law-now-no-one-is-happy
Excuse me. The only people asking schools ‘to do much more than school our children’ are the special interest groups lobbying the legislature (i.e., contributing to their campaign funds) to provide those extracurricular services – at an outrageously high cost to taxpayers. Elaine Collins wants to keep her job. And with an annual salary in excess of $92,000 plus benefits, why wouldn’t she. And legislators like Laura Sibilia, Rebecca Holcombe, and the rest of these legislative thieves are enabling Ms. Collins. Yes. They’re thieves.
But not only are public school costs going through the roof. Vermont’s Department of Child Services has a $60 million plus annual payroll. Are they doing nothing? This is tag-team corruption.
And just this morning, on VT Public, I listened to a report that Gov. Scott wants universal mail-in balloting for delayed school budget votes this spring.
https://www.vermontpublic.org/local-news/2024-02-08/gov-scott-wants-universal-mail-in-balloting-for-delayed-school-budget-votes
But, get this, “… the head of the Vermont Clerks and Treasurers Association, Holland Clerk Diana Judd, opposes the plan. Judd says voters already have a handful of ways to vote ahead of an election — including requesting a mail-in ballot. It just seems like if they cared enough to vote they would get their ballot themselves,” Judd said.
Hello!
What about the universal mail-in ballots automatically sent to every registered Vermont voter for the November elections? WTF?
Listen folks. That Vermont’s government is corrupt is no surprise. It’s corrupted to the core. As are all of the people employed by it, including NGOs. Sorry. If the shoe fits, you have to wear it. If you’re not part of the solution, you are the problem.
Our honorable legislators don’t know real evidence when it slaps them in the face. We can each probably tell of one or two friends or relatives who have fled Vermont at least in part to escape our high taxes. The legislative response is, “Oh, that’s just anecdotal “. No, my friend, that’s what we call evidence, and when you dismiss evidence out of hand, the result is bad policy.
According to Jeffrey Anderson, director of the Bureau of Justice Statistics at the U.S. Department of Justice from 2017 to 2021, from the second quarter of 2020 to July 1, 2023 the 2 States with the highest absolute numbers of out-migration were California and New York (high tax States).
The two States with the highest absolute number of in-migrations were Florida and Texas (no income tax States).
In 2023 New Jersey (high tax State) topped the list of most outbound States.
It may also be worth mentioning that:
(1) Vermont is only one of 10 States that taxes social security income (although, to be fair, below a certain level of income the tax is waived) and
(2) according to the Joint Fiscal Comm. of the Vermont Legislature, Vermont has the 2nd highest level of State income taxes (proportionally obviously) of all 50 States
but Vermont always strives to be #1 and, to that end, the Legislature is considering raising more money through increases in income tax rates.
In a previous Commentary I wrote about the head of the Vermont NEA, Don Tinney, calling to raise $100 million dollars from Vermonters with income greater than $500,000
(https://vermontdailychronicle.com/silverstein-selection-bias-a-trojan-horse-and-a-don-tinney-proposal-a-financially-toxic-threesome/)
I detailed the following stats:
In 2021 there were 2541 returns with AGI of $500,000-$999,999, and 1243 returns with AGI of $1 million dollars or greater.
How much did these 3784 returns (about 1% of all returns with positive AGI) contribute to the State government?
$352,673,299 or about 31% of all Vermont personal income taxes in 2021!
Mr. Tinney wants the latter individuals (all 3784 of them) to “contribute” another $100 million dollars. This would equal a 28.35% increase in their State personal income taxes.
With that increase 1% of tax filers in Vermont would pay 36.7% of all Vermont personal income taxes!
Considering such tax filers are already contributing on average $93,200 each (!), Mr. Tinney’s clarion call to further tax this small number of individuals in order to support 12% year-over-year increases in public school spending in Vermont, should be seen for what it really is: a Trojan Horse aimed at increasing the power and monetary income of Vermont’s most powerful union, the Vermont NEA and its constituent members.
I do not agree with how the super-wealthy acquire their wealth, but declaring that their average income tax payment of $93,000 is “not enough” to satisfy the greed of the Vermont NEA, nor the unsustainable spending desires of the super-majority Democratic-Progressive Vermont Legislature, is sufficiently bizarre to be the plot of a new episode of Rod Serling’s The Twilight Zone (cue the music)
Anyone who thinks ‘millionaires’ are going to sit idly by and pay higher taxes to fund Vermont’s corrupt dystopia is delusional. I, too, know several wealthy people moving across the CT River to NH to avoid VT taxes as we speak. It’s already happening.
However, at the risk of going off-topic: and speaking of ‘confirmation bias’ – a euphemism for self-delusion – consider Elaine Collins, a 32-year public school educator and current North Country Supervisory Union superintendent, who recently explained in the VT Public’s ‘On Point’ program, that “Schools have been asked in the last 10 to 15 years to do much more than school our children. And that is really where the increase of education spending is coming from.”
Excuse me. The only people asking schools ‘to do much more than school our children’ are the special interest groups lobbying the legislature (i.e., contributing to their campaign funds) to provide those extracurricular services – at an outrageously high cost to taxpayers. Elaine Collins wants to keep her job. And with an annual salary in excess of $92,000 plus benefits, why wouldn’t she. And legislators like Laura Sibilia, Rebecca Holcombe, and the rest of these legislative thieves are enabling Ms. Collins. Yes. They’re thieves.
But not only are public school costs going through the roof. Vermont’s Department of Child Services has a $60 million plus annual payroll. Are they doing nothing? This is tag-team corruption.
And just this morning, on VT Public, I listened to a report that Gov. Scott wants universal mail-in balloting for delayed school budget votes this spring.
But, get this, “… the head of the Vermont Clerks and Treasurers Association, Holland Clerk Diana Judd, opposes the plan. Judd says voters already have a handful of ways to vote ahead of an election — including requesting a mail-in ballot. It just seems like if they cared enough to vote they would get their ballot themselves,” Judd said.
Hello!
What about the universal mail-in ballots automatically sent to every registered Vermont voter for the November elections? WTF?
Listen folks. That Vermont’s government is corrupt is no surprise. It’s corrupted to the core. As are all of the people employed by it, including NGOs. Sorry. If the shoe fits, you have to wear it. If you’re not part of the solution, you are the problem.
The services for special needs children in schools has dramatically increased over recent years. I think that is just one variable driving up the cost, and is included in cost per pupil. I would like to know how many students have a personal attendant throughout the school day, both quantity and as a percent.
In addition to ‘teachers’, we have Nutrition Managers and Assistants, Student Support Paraprofessionals, Interventionists, Special Ed. teachers, CFG ELA Interventionists, Related Services – School-Based Clinicians, Counselors, Nurses, to name a few. As I’ve noted here several times, the Agency of Education has 37,700 staff serving 72,747 K- 12 grade students. This does not count independent schools serving tuitioned students and various and sundry social services organizations. As I mentioned above, Vermont’s department of Child Services has a $60 Million annual payroll. Personal student attendants for special education kids are but the tip of this iceberg.
Without question, this legislature seeks to further hinder Vermont’s economy, following in the footsteps of massachusetts’ 4% millionaire tax might just not be the best idea ms. kornheiser every had. The Mass 4% tax enacted by constitutional amendment in 2022, is estimated to bring in 1.5 billion this fiscal year- but it is unknown what FY 2025 will bring- as the out-migration from Mass continues- according to a report from WBUR (not exactly a conservative station) and overall tax receipts are down. That’s hundreds of billions of wealth leaving, never to pay a cent in millionaire tax- or any other income tax again.
It appears that Vermont’s version of maura healy would prefer to have an extra 3% of nothing than continue to get 8.75 % of something. I know of many dozens of Vermonter’s that have abandoned Vermont for no or low tax states, not anecdotally,
as kornheiser wishes- and many of these folks left prior to retirement or sale of their businesses, taking with them their earned wealth thru very legal trusts and thorough estate planning.
if kornheiser cannot see the forest thru the trees, she shouldn’t be making stupid decisions we have to live with. From her campaign website: “Born in Louisville, Kentucky, Emilie grew up in suburban New York. She arrived at Marlboro College at age 17, determined to find ways to address the isolation and injustice she witnessed in the suburban environment.”
Like so many other legislators, she came here from there-Because she didn’t like it there- And now wants to change here to be like there.
Confirmation bias knows no political boundaries. Clear crimes are committed by politicians of all stripes, but people only care about the ones that aren’t “theirs”.
BOTTOM LINE : “The fear of the Lord is the beginning of wisdom”. There is an abundance of knowledge in our world. Some is truth/fact, some is false/deceptive. Wisdom is the catalyst that allows true understanding to knowledge. BUT the prerequisite to wisdom is The fear of the Lord. That is God’s order.
A bunch of convoluted, academic gollbidygook that serves no purpose other than distort facts and distract from facts. Seriously, how do people become millionaires or billionaires in Vermont without a schooled tax accountant who knows how to write off 3/4 of their wealth and hide their assets offshore, in trusts or LLC’s? C’mon man! Let’s be clear, the money funding the campaigns and political parties for every selected legislator is not going to pay one extra red cent – guaranteed! Operation Tincup has no intention whatsoever to make the wealthiest pay extra taxes of any sort. Most of them are not even full time residents to begin with. Those who earn $500,000-$1,000,000 will say that money doesn’t go far these days with inflation eating a good chunck of it – even they are crying uncle. The Truth is the American dollar is finished. Those flush with Federal Reserve debt notes are dumping them into hard assets and bracing for impact. Take heed or lose it all.
“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” W.C.