Dems looking at higher sales taxes, sweetened beverage tax, food & clothing tax, cloud tax…
by Rob Roper
Since attaining supermajority status in Montpelier, the Democrats’ education policy can be explained as “give the government school monopoly (the VTNEA, superintendents association, etc.) whatever they want!” This included universal “free” school meals, expanded pre-k spending and control over birth to five care, and a new pupil weighting system guaranteeing more spending on certain classes of students. This cocktail exploded in their – OUR – faces in the form of an anticipated 20 percent plus property tax increase.
Now they are desperate to paper over this colossal political screw up, and their plan to do so is not to spend within our means, but rather to raise more taxes to feed into the education fund to “buy down” the impact on property taxes. In other words, continue to take more and more money from taxpayers to give to their political cronies, just out of different pockets in the hopes we can be fooled into thinking we’re somehow getting a deal.
Behind the Lines is a reader-supported publication. To help keep this project going, consider becoming a free or paid subscriber.
It’s not a new strategy. The Education Fund is currently fed by the property tax, 1/3 of the sales & use tax, ¼ of the meals & rooms tax, the state lottery, and a handful of other minor sources. My friend John McClaughry dubbed the public-school special interests “The Blob” after the 1950’s horror movie monster that grew ever larger by subsuming – killing and destroying — everything in its path. It’s an apt description, and The Blob is on the move again!
The House Ways & Means Committee is currently debating what other new revenue sources can be thrown into the expanding path of The Blob. Here are the top candidates:
- Higher and/or expanded sales taxes. Vermont’s sales tax is currently 6 percent, with some communities adding a local option tax on top of that. It raises $607 million.
According to the Joint Fiscal Office, each 0.1 percent increase in the sales tax would raise approximately $9.3 million. Of course, this would make Vermont even less competitive with neighbors New Hampshire, which has no sales tax, and New York, which has a 4 percent sales tax. It was also pointed out that the sales tax is a regressive tax hitting lower income people harder than those with higher incomes.
Expanding the sales tax base – the things subject to the sales tax – could squeeze as much as $271 million by including groceries, medical products, residential energy, clothing and footwear. These things are currently exempt from the sales tax because, well, people need them to survive. Taxing them would be cruel and unusual. But, you know, if the VTNEA wants the money….
- An Excise Tax on Sweetened Beverages.
The JFO ran the numbers on taxing just “sugar sweetened” beverages – soda, sports drinks, energy drinks, ready-to-drink teas and coffees, etc. — at either 1 cent or 2 cents per ounce (so 12 to 24 cents per twelve ounce can/bottle, but it also applies to syrups and powders to which water is added). This would extract an estimate $15.2 to $29.8 million from thirsty Vermonters. However, Rep. Peter Anthony (D-Barre) floated the idea of taxing ALL sweetened beverages, and idea the chair Emily Kornheiser said she could potentially get on board with, regardless of what the sweetener was. This would roughly double the take. Hey, why not? The VTNEA wants the money.
Of note, no other state has a sugar or otherwise sweetened beverage tax, although a handful of municipalities do. So, look for “Vermont will lead the way!” propaganda to come if this takes off.
- A “Cloud” Tax on Pre-Written Software Accessed Remotely.
Democrats in the legislature have been salivating about the Cloud Tax on software as a service for over a decade, and this might just be the year! (Because the VTNEA wants the money.) For the most part Vermont does not tax services (more on that in a moment). This tax, which would cost Vermonters roughly $20 million per year, would hit things like your Microsoft Office or Google Apps subscriptions, Quickbooks, Mailchimp, Toast or Square, Force, Amazon Web Services, and with cruel irony, TurboTax, so you’ll get to pay a tax to pay your taxes.
While this has implications for everybody, it will be particularly painful for small businesses that need these software services to operate competitively.
- Expanding the Sales Tax to Services.
Although a general expansion of the 6 percent sales tax on good to include services – everything from school tuitions, legal advice, hair salons, personal trainers, lawncare, etc. – was not part of the JFO presentation, it was raised by members of the committee. The JFO presenter referred them to the Rand Study done in 2023 to determine new revenue streams to fund expanded government-run pre-k. That study showed that expanding the sales tax to services at the 6 percent rate would extract $105 to $143 million depending upon what and how many exemptions are allowed.
- Tax candy
Currently candy is considered a grocery and is exempt from the sales tax. Taxing it at 6 percent would only raise $3.7 million, but as long as you’re stealing you might as well do so from babies. The VTNEA wants the money!
The tragedy of all this taxing and spending – or perhaps the intent – was pointed out by Representative Scott Beck (R-St. Johnsbury). “Given how we define education spending and calculate the yield, this would be worse because you’d get all of the taxes and not get property taxes down at all.” Asked to elaborate, Beck went on, “If you pour all of this money into the system, the districts are going to spend it up because it’s cheap money. I mean we’ve added in the last – with Wayfair [v. South Dakota sales tax SCOTUS decision] we’ve added $100 million in sales tax to the Education Fund and look what’s happened to property taxes. The money’s cheap to the districts, and so they spend it.” Just like The Blob monster that it is.
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
Discover more from Vermont Daily Chronicle
Subscribe to get the latest posts sent to your email.
Categories: Commentary, State Government
The Vermont tax payers must not be to smart they keep voting these money grabbers back into office year after year
Not to mention they keep voting to pass the ever increasing local budgets!
“Lawmakers consider pushing back school budget votes as they rethink property tax cap” – VT Digger
The legislative dystopia surrounding public education monopoly funding and governance is imploding, as any rational human being paying attention to the details has seen coming. They’ve killed the goose that laid their golden egg. And now they are going to try to cover their collective rear-ends. But they can’t figure it out. They don’t know how to do it. They don’t know much of anything. And their incompetence is becoming evident for all to see.
There is one legislative answer to this malaise. It’s been collecting dust on the House Education Committee shelves for a year now. It’s called H.405. Check it out. And before these buffoons make an even bigger mess for Vermont’s families and taxpayers, ask your local representatives to at least consider moving H.405 forward for consideration and debate.
“Who is more foolish? The fool or the fool who follows him?”
2020 Spending:
Education = $1.314 Billion
Total State = $5.8 Billion
2022 Spending: (a Covid year)
Education = $2.16 Billion (64% increase over 2020)
Total State = $10.08 Billion (74% increase over 2020)
Now that Covid is over, are we going back to pre-Covid spending? Of course not. It’s a racket. Thievery. And there’s nothing anyone but the government cartels can do about it. Can’t wait for the next ‘emergency’ from which the State can ‘protect’ us.
With more than 37,700 AOE employees serving only 72,747 K-12 students (an increase from 72,183), one would think the VT Agency of Education and its public schools had the staff to do a better job in all categories. After all, with a $2.08 Billion projected education budget ($28,400+ per K-12 student) one would think they’d do a better job keeping tabs of what’s going on *and* educating the kids. That fewer than half of Vermont’s high school graduates meet grade level proficiencies at that price isn’t anything for these kids to write home about (if they can even write).
$28,400 per pupil, boggles the mind. There are families and individuals who live on less than that.
How did we get here? As I think back, Vermonters’ limited/low incomes were the reason legislators in their “infinite wisdom” devised one of their biggest blunders with Act 60. They realized people were leaving the state because they couldn’t afford to pay the education property tax. The formulation of Act 60 gained traction with the Brigham vs VT Supreme Court decision, a decision we would recognize now as an “equity” decision, meant to bring spending to the lowest common denominator. In effect Act 60 was an excuse for an income redistribution scheme that encouraged more spending because of the perception the “needy’ would get a tax break. That was followed by the “brilliant” move to consolidate schools a few years ago, with the promise of saving money.
But the proof is in the pudding, none of it solved the spending problem and it has gone through the roof. I recognize the issue is complicated by subsequent legislation and formulas only the IRS would understand. It needs much more serious discussion including H.405 and possibly funding education with a straightforward income tax. One thing for sure, I don’t think adding more sales tax solves the spending problem. It just makes Vermont less affordable and people near enough to the borders, spend their money elsewhere. There are many ways to skin a cat.
“Free” money is never a good option. With an ever increasing a
appetite the Blob is now a morbidly obese entity requiring exponentially increasing inputs just to sustain its administrative junk food caloric needs. We the people do not need to be co-dependents in feeding the VTNEA and its entities revenue which only increases its profligate use in funding that which has no benefits to the decreasing needs of the decreasing student enrollments. This blob needs to be on a funding restrictive diet in order to get their priorities rectified and to reduce the administrative personnel and eliminate the woke indoctrination programs, the latter which only serve to spread a toxic sludge into the minds of our children.
you voted for them /// pay your taxes/// stop crying///
Audit, audit, audit ! everything from the Department of Education, to the Kindergarten teacher, but especially, the VTNEA. I’ve said it before, and I’ll say it again, get the teachers, and anybody else who pays dues to the VTNEA out of the VTNEA, and give them the option of joining the VSEA like every other state employee.
I’ve voiced my opinions many times on “The Blob”, so let’s go in a different direction.
Vermont already taxes sweetened beverages at 6%. This despite the fact that Vermont has one of the lowest obesity rates in the nation, at 8%. Point this out though, and we are told, “Yeah, well, that might be true, but our ‘overweight’ percentage is much higher”. No ****, Sherlock! As is every other state’s! And who defines “overweight” anyway? The vegetarians? The CDC? You mean the same agency that lied and lied and lied about fauxid and the effects and morbidity of the gene alteration shots? “Trust the science!, Trust the science!, Dr Fauxci!, Trust the science!, Trust Dr Fauxci!” You know what I believe? I believe that Lucy is going to keep pulling the football away every time Charlie Brown goes to kick it for all time. And if you don’t? Well, at least I tried.
And now they’re considering a “per ounce” sweetened drinks tax on top of the 6% they already have? Of course they are, and here’s my solution. You want to tax a beverage? Fine. Tax coffee on a per ounce basis. Ever see someone try to kick the coffee habit? They shake, they get migraines, they get angry. Those, my friends, are symptoms of drug withdrawal. Ever see those behaviors from someone quitting soda? Nah, me neither. Coffee has become a cult, a sacred cow. “Let’s have coffee!, Let’s meet for coffee!”, right? Let’s walk around with a sippy cup attached to one hand and a phone to the other 24/7. Oh, and don’t like the taste? Well, add chocolate! Or call it a “latte”! Or even better, add packet upon packet upon packet of sugar! But no, don’t tax our coffee! That wouldn’t be fair.
And speaking of regressive taxes, care to take a guess at who buys the most sweetened drinks? If you guessed “people with less money”, you win! On a per ounce basis, soda is still far, far cheaper than coffee. So in addition to everything else, this is a wealth disparity tax, even at the 6% soda is taxed at now. Like so much else, it comes down to the “elites” trying to screw the “deplorables”.
You know who doesn’t have to pay sugary drink taxes? People getting public assistance – EBT card users, etc. And why exactly is that, I wonder? Well, they are becoming a more significant voting bloc. Best not to hit them where it hurts. I’m just sayin’.
On to a proposed grocery tax. Or services tax. Or any other tax the legislature wants to invent. Yeah, those are good ideas! You know what the average Joe who lives within 20 miles of NH or NY is going to do? They’ll shop there! They’ll get their cars fixed there! Anyone with a brain already makes all their major purchases (aside from cars) across this border or that. And I guarantee you our hypocritic dem legislators do the exact same thing. They’re many things, but stupid ain’t one of them.
So that sucking sound you hear that will result from whatever array of new taxes the legislature chooses to subject us to will be Vermont money headed to another state. And what will the legislature do then? Why, raise or enact more taxes, of course, which will gradually drive more and more people out of state, lowering the revenue and causing taxes to be raised yet again. It’s an endless feedback loop.
But maybe I’m not giving them enough credit. Maybe that’s their long-term plan – Run the rest of us out of here by hook or by crook. Then they’ll have their own little liberal utopia, Maybe they can even import commoners, er, workers, on the McBus.
I believe coffee (by the cup) is subject to rooms and meals tax (9 or 10%), I wasn’t aware that there was a 6% sales tax on sweetened beverages. I don’t drink coffee or soda, but I do enjoy quality local beer which I believe I pay in the 10% range of tax. If they start taxing my chocolate, I will start an out of state chocolate running operation.
Well that was a lot of complaining from the commentator and all these commenters without a single helpful or creative suggestion on what major cuts to government and social services could be made if we were to lower taxes.
That’s because you, apparently, can’t or won’t read the comments.
“There is one legislative answer to this malaise. It’s been collecting dust on the House Education Committee shelves for a year now. It’s called H.405. Check it out. And before these buffoons make an even bigger mess for Vermont’s families and taxpayers, ask your local representatives to at least consider moving H.405 forward for consideration and debate.”
I stand corrected, I missed that, an actual suggestion. I don’t see how that bill would in any way reduce taxes, or be helpful financially to our public school system.
What are your suggestions? It has to begin somewhere. The Boston Tea Party was preceded by the people’s complaints. We have the vote, but we need willing and able candidates. Maybe our complaints will stimulate a few qualified people to run for office.
I have no complaints, glad to pay my fair share to our fine State.
So… you weren’t actually interested “a single helpful or creative suggestion”. Go figure.
The beatings will continue until moral improves…..
I cannot emphasize this enough. Either you start tightening your belts or there will be serious repercussions. More people moving out, increase in rental amounts. Fewer units built for rentals. WAKE UP!