by Dave Soulia, for FYIVT.com

In recent years, Vermont has grappled with an increase in theft and other crimes, compounded by criminal justice reforms that some argue prioritize the rights of offenders over those of victims. The state’s no-bail policies and a perceived “revolving door” justice system have left many residents and businesses feeling unprotected. Beyond the personal pain and financial hardship crime causes, there’s a broader economic toll: individuals, businesses, and even the state suffer under the weight of persistent crime. Addressing this imbalance requires rethinking policies—notably, allowing tax deductions for crime-related losses.

The Economic Toll of Crime on Victims

For individuals, crime is more than a violation of personal property—it’s a financial burden that can have lasting effects. Theft often results in unreimbursed losses, especially for items not covered by insurance or for those unable to afford adequate coverage. While federal tax law once allowed deductions for theft losses, the Tax Cuts and Jobs Act (TCJA) of 2017 eliminated this relief for most thefts, leaving victims to absorb the full cost unless their losses occurred in a federally declared disaster area.

For businesses, the stakes are even higher. Repeat theft, vandalism, and fraud lead to increased operational costs, such as higher insurance premiums, investments in security measures, and the direct cost of replacing stolen goods. Small businesses, often operating on thin margins, are particularly vulnerable. Persistent crime can force closures, layoffs, or relocation, further weakening local economies.

These losses ripple outward, affecting the broader economy. Businesses unable to recover from theft contribute less in taxes and may shutter, leaving employees out of work and communities without essential services. Victims of crime, meanwhile, have less disposable income to spend or reinvest locally, further compounding economic stagnation.

The State’s Responsibility

The social contract between taxpayers and the government is clear: individuals and businesses contribute taxes in exchange for essential services, including safety and security. When the state fails to uphold its end of the bargain—whether through insufficient law enforcement, ineffective judicial systems, or policies that enable recidivism—taxpayers understandably feel cheated.

Vermont’s current justice system, which critics describe as overly lenient on repeat offenders, exacerbates this problem. Policies that prioritize reducing incarceration and limiting pretrial detention have, in some cases, emboldened criminals. The result is a growing sense of insecurity among residents and businesses, who bear the brunt of the state’s inability to deter crime.

A Case for Tax Deductions for Crime Losses

One way to address this imbalance is by allowing victims of crime to deduct their unreimbursed losses on state income taxes. While this wouldn’t eliminate the personal and emotional toll of crime, it would provide a measure of financial relief, acknowledging the state’s failure to adequately prevent these losses.

Why This Makes Sense:

1. Fairness for Victims: When the state fails to prevent or adequately address crime, victims shouldn’t be left to shoulder the entire burden. A tax deduction would offer some compensation, ensuring that victims aren’t punished twice—once by the criminal and again by the system.
2. State Accountability: Sharing the financial burden of crime through tax deductions would create an incentive for Vermont to invest more in crime prevention, law enforcement, and programs to reduce recidivism. Reduced tax revenue tied to these deductions could serve as a tangible reminder of the cost of inadequate public safety measures.
3. Economic Benefits: By alleviating some of the financial pressure on victims, this policy could stimulate local economies. Businesses and individuals would have more resources to recover, reinvest, and rebuild after losses.

Potential Challenges and Solutions

Critics might argue that such a policy could be open to abuse, with taxpayers exaggerating or falsifying claims. To mitigate this risk, deductions could require thorough documentation, such as police reports and proof of loss. Caps or limits on deductions could also prevent excessive claims while still offering meaningful relief.

Another concern is the potential short-term reduction in state tax revenue. However, this impact could be offset by long-term gains from a healthier economy and reduced crime rates, as the state invests in more effective crime prevention strategies.

The Broader Debate: Rights of Victims vs. Offenders

Much of the frustration with Vermont’s justice system stems from a perceived overemphasis on the rights of the accused, often at the expense of victims. While ensuring fairness for defendants is vital, this focus should not overshadow the rights of those harmed by crime. Victims deserve justice, restitution, and support—not just from offenders but from the state tasked with protecting them.

Policies that ignore the plight of victims, such as limiting pretrial detention or downplaying repeat offenses, risk eroding public trust in the justice system. By contrast, policies like tax deductions for crime losses would signal a commitment to balancing fairness with accountability.

Moving Forward

Vermont’s economy cannot thrive under the weight of persistent crime. Individuals and businesses need to know that the state values their safety and will support them in recovering from harm. Allowing tax deductions for criminal losses would be a step in the right direction, providing immediate relief to victims while encouraging the state to take a more active role in reducing crime and recidivism.

The message is clear: when crime hurts, everyone pays. It’s time for Vermont to share the burden and prioritize the safety and well-being of its residents.