Vermont’s current tax system employed by the Legislature needs overhaul
By Gregory M. Thayer, MBA
It’s time to change our state government’s archaic tax system and truly make it fair for every single Vermonter.
We need changes under both the current tax systems and the thinking under the Gold Dome. They are taxing on income, payroll, property, consumer goods, vehicle use, commercial vehicles, gas, diesel fuels, airplane fuels, recreational vehicles and fuels, all forms of entertainment, and our fun, hotels, you get it everything under the sky. They are trying to tax it all. All in the name of BIG government control. Soon, they will try to tax our thinking process. Third, their system is not fair to Vermonters, especially to young Vermonters and seniors.
Let me concede right here, that I despise taxes, especially the overtaxation and government involvement or control over all programs that could be more efficiently run by the private sector. Take S.56, which aims to take control of childcare in our beautiful state. And the Home Heating Act.
And what about school funding? School spending is out of control and taxing property is both unfair and unjust. We appreciate the need for some taxation in our government to pay for “reasonable” governmental spending, including helping the vulnerable in our communities, but this has gone too far.
Under this Make Vermont Affordable plan, every business transaction taking place in Vermont, whether as an individual consumer or a business or a non-profit doing business will pay the same fair tax at point-of-sale at the marketplace, period. And every tax in the VSA’s (Vermont Statute Annotated) will be repealed, eliminated, and gone. This taxed, will be spread around all people to cover every dollar raised to fund state government.
A complete consumption tax. A consumption tax is a point-of-sale tax or added value on the purchased consumer goods, products or services that individuals purchase. In our estimate gross sales across Vermont exceed $100,000,000,000. or $100 billion dollars annually. These sales incorporate every and all business transactions within the Green Mountain State borders, with no exemptions, no credits, no adjustments: just a straight tax on everyone’s consumption, on every single purchase in our borders, including all on-line purchases inside a Vermont-based internet operation’s platform. We know that the gross sales cited above are real, and at a reasonable rate, between 8 to 12% we will realize the same budgetary revenues needed to fund the state government’s current budget. However, we believe that government spending will decrease under this new taxation plan, and that the government will become more efficient and effective for Vermonters.
I reached out to the Vermont Dept. of Taxes, the Joint Fiscal Office, the Legislative Council and others for real total gross sales figures here in Vermont. No one would help with the request. They said that they only keep figures on current sales type tax compilations. I disagree. That said, any Legislator can get those figures because a couple of these offices work for the Legislature. It’s pretty simple, businesses must file quarterly or monthly business transaction returns, some are only required to file sales figures annually. When every business organization, nonprofits and individual’s file as sole proprietorship (Schedule C) they file their gross sales data, hence we have the total and complete information of gross sales figures in our State. They just need to dig for it a little deeper.
Every business, big or small files their, Corporation’s taxes on a 1120 or 1120S; Partnerships 965’s, Non-Profit 990s, and self-employed individuals, a sole prop. files their 1040 Schedule C must file taxes with the State Tax Dept. In their tax filing there is a section for Cost of Goods Sold on every return filed with the IRS and the Vermont Dept. of Taxes. In there tax return their gross sales figures for the year, are included, equating to the $100 billions that I cited above. And this total gross sales amount, taxed at a reasonable rate of say 10% (less or higher) will completely fund total state government.
This consumption tax is a new found source. Currently millions of dollars in gross sales dollars goes un-taxed annually. There are millions of illegal money that is not taxable for obvious reasons, but with this consumption tax all that money will be captured with this new consumption tax plan, when these people go to the marketplace to purchase anything or use any paid service. These point-of-sales transactions will be taxed only. Remember, that no Vermonters will be paying all the other taxes imposed under current Vermont law; no property taxes, no income or payroll, no death tax, nothing. Some taxes will be traded for this new current consumption tax.
This new system will save the state government millions of dollars in different departments, with salaries and various antiquated and useless tax system platforms that just don’t work and are expensive to maintain. Now we are working with some legislators to introduce this into the legislative process. This is a fair and just taxing source, it’s bold, but deserves a solid discussion. Stay tuned for additional information.
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Categories: Opinion, State Government
Gregory, your plan makes sense, but it will never happen as long as we have rabid spending junkies within the ” Golden Doom “……………… Yes, Doom, we all see it but most ignore it.
I hope your plan is adopted, as it would make Vermont a place to live, a Vermont that has Vermont values, not a big-city liberal nonsense agenda, but until the state house gets under control or ” cleaned out ” that’s my hope.
Vermont is dying a slow painful financial death, people need to wake up !!
Huh. A Johnny Bananas meets Babylon Bee kind of article. Sorry Greg, it won’t work for so many reasons. Think for a minute how regressive a 10-12% tax would be on energy- be it fuel oil or electricity. Food? That’d surely help the lower income folks join a tax revolt, but wouldn’t slow the spending. Aside from an increase in Black Market transactions, what’s left of the wealthiest residents will increase their use of out-of-state transactions to bypass this plan. Regressive taxes such as Consumption taxes, Value-Added Taxes (VAT’s-similar to Canada and Europe use) haven’t actually lowered anyones tax burden in those countries- as their governments just continue to spend…as our legislature does.
Vermont has a spending problem, not a taxing problem.
This would create boom times for New Hampshire.
I agree, with a few here. Vermont does have a spending problem. Those under the golden doom invent new ways to spend every legislative session. So many under the golden doom are either paid of shills or idiots who embrace a plethora of society destroying agendas: climate change, the villainizing of carbon, a necessary component for all life, embracing globalist plans for one world government which is fraudulently cloaked as that which is necessary for humanity, for the environment, in reality the UN/WHO nexus want a one world tyrannical government. They are behind the many policies and regulations which the foolish under the dome have no realization or comprehension that these things are to destroy a moral, human, productive, democratic republic. Those policies have nothing to do with respecting humanity but everything to do with ripping apart and dividing society. Vote them out. The post liberal left who label themselves as progressives are regressives.
Exactly right. There is no “budget” that legislators work within; instead, it’s a constant nicking and bloodletting of the taxpayer for every additional pet project that bureaucrats come up with. “It’s just a little extra we’re asking for”, conveniently ignoring that there’s a line out the door of idiots looking for their “little extra”. And meanwhile, the taxpayer is turning white because they have no blood left to give; they have been drained, squeezed, and wrung. So now the leeches start taking blood on credit, telling you that when you do regain consciousness, you owe them your next pint.
It’s that bad.
Unless you can hard code something into the law that says anyone attempting to spend more than this rate, or to adjust/modify this tax system anything higher than this rate, will be subject to death penalty immediately – Fat chance of any changes being anything other than a new tax and new increase in costs.
We don’t have a tax issue, we have an illegal tax, and illegal spending by illegal politicians issue. However when politicians do something illegal, they get rewarded with more money instead of Jail. When there is no accountability, there is lawlessness. You’d think that the most important laws in the land being broken would have the highest penalties. You’d figure servants would be held to the highest standards in a system of liberty and justice. Go figure…
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Article 9. [Citizens’ rights and duties in the State; bearing arms; taxation]
That every member of society hath a right to be protected in the enjoyment of life, liberty, and property, and therefore is bound to contribute the member’s proportion towards the expense of that protection, and yield personal service, when necessary, or an equivalent thereto, but no part of any person’s property can be justly taken, or applied to public uses, without the person’s own consent, or that of the Representative Body, nor can any person who is conscientiously scrupulous of bearing arms, be justly compelled thereto, if such person will pay such equivalent; nor are the people bound by any law but such as they have in like manner assented to, for their common good: and previous to any law being made to raise a tax, the purpose for which it is to be raised ought to appear evident to the Legislature to be of more service to community than the money would be if not collected.
“I reached out to the Vermont Dept. of Taxes, the Joint Fiscal Office, the Legislative Council and others for real total gross sales figures here in Vermont. No one would help with the request. They said that they only keep figures on current sales type tax compilations.” Shocker! Not!
How dare you ask for information that would expose their thieving, stealing, and wasting? It is not only about sales tax, it is about all the taxes, fees, penalties, fines, compounding interest, bond bundling and selling, pension colluding, federal pork, grants, loans and all other forms of legalized theft that is never audited or books opened for public review. A small State with big time fraud and corruption. Start prosecuting the thieves and claw back the stolen goods with seizure of assets. Start with the Congressional representation and work down from there.
Yes. Vermont has a spending problem. And I’m encouraged to see that most commenters understand this. But the ‘tax system’ is a symptom of that problem, not the cause. Another symptom is corruption – legal, ethical, and moral. But again, these are symptoms of out-of-control taxation. Not causes.
The motto, ‘That government is best which governs least’, is the key. And obfuscation by those who argue about who it was who coined the phrase is, again, symptomatic… not causative. That taxes should represent some quantitative benchmark, a consensus ‘fair share’, if you will, is pure sophistry. That the system for collecting taxes be assigned to any number of various revenue sources, e.g., income, sales or consumption fees of various kinds, and the most usurious of all, property taxes – these are symptomatic, not causative. And our Founders knew this.
“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” Some say it was Alexis de Tocqueville who coined the phrase. But it doesn’t matter who said it. The observation is a truism – a fact of life, an inherent aspect of human nature. After all, not only has the government bribed the public, the public has succumbed to the inducement. It takes two to Tango.
As well-meaning as Mr. Thayer is, as altruistic as almost everyone is at one time or another, without this basic understanding, no rearrangement of our deck chairs will change our current course. In that regard, there are two points by Milton Friedman I often reference that best describe the basic understanding we have had, and for whatever reason, have lost.
First: “The key insight of Adam Smith’s Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it.”
Second: “Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property. When government — in pursuit of good intentions tries to rearrange the economy, legislate morality, or help special interests, the costs come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.”
So – what should we be doing?
First, understand the two concepts listed above and recognize the inevitable distractions that have been plaguing us. Then, act accordingly. As a government, do as little as possible, as opposed to doing more and more.
Re: “As a government, do as little as possible, as opposed to doing more and more.”
As VermontVermonter points out – in Article 9 of Vermont’s Constitution:
“… previous to any law being made to raise a tax, the purpose for which it is to be raised ought to appear evident to the Legislature to be of more service to community than the money would be if not collected.”
This is a high bar, not a mere bump in the road. Our elitists legislators will argue that whatever they do on our behalf, it will be ‘of more service to community’ than anything we can do as individuals. Then remind yourselves that without the opportunity to keep your money and spend it as you see fit, your legislators can never know if they can do more on your behalf than you can do for yourselves. In fact, when they persist at preventing you from having the opportunity to make your own choices, it should be clear to you that they are corrupt.
If anyone thinks this will lower government spending, I have some beachfront property in Ukraine you might want to purchase. Remember the Golden Rules –
1. Anything a D/P legislature approves, especially if they say it will save you money, will always cost you more money.
2. No city, county, state, or country ever taxed their citizens into prosperity.
What’s the solution? Simple. As many others have said, stay within your budget. And your budget should be maxed out at what was collected the previous year. Of course, this is fundamentally no different from what every household in the state does.
Think about it – unemployment goes up? Less revenue… cuts have to be made. Of course, there are many other examples, but the point is this would incentivize the legislature to work for the actual benefit of Vermont’s residents. They want more revenue? Fine. Help the middle class do better instead of squeezing every last dime out of them.
Now THAT would save Vermonters some money.
I can’t think of anything more business UNfriendly than taxing gross sales. With due respect, this seems like a really dumb idea and a complete non-starter. Did you really mean to tax *gross* sales? (ie. before qualified expenses such as rent, payroll etc.??)
Sounds like a VAT tax. IE 50% of the price at end sale of a product is tax. Not cheaper just hidden in each interaction.
the vermont state auditor said every thing is okay on the radio the other day m. c./// of course he will protect his own interests/// the radio has become the audio version of tel//// lie//// vision///
Grammy Yellen says the US economy is in good shape. All lying liars from Liarsville and compensated well for doing so. No conscience, no morals, no ethics – that is what makes them all qualified to be where they are today.
For over a decade I’ve thought that a 25 cent toll booth at the Vermont-Mass border on I-91 would solve the entire budget issue. Automatic cameras catch license plates and bill the traveler. That infrastructure exists and the money generated would more than likely Vermont residence would likely generate a refund !! Put the burden of 25 cents on the tourists. Problem solved.