Governor’s Race: Candidates’ approach to taxes

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(Host) One of the key issues in this year’s race for governor is the debate over tax policies. In the first part of a series looking at issues in the gubernatorial contest, VPR’s Bob Kinzel looks at how the candidates are trying to frame the issue of taxes in the eyes of Vermont voters.

(Kinzel) It was clear at the beginning of this year’s gubernatorial race that taxes would be a key concern. Incumbent Republican Jim Douglas launched a TV campaign to suggest that his Democratic opponent, Peter Clavelle, is a person who has a history of supporting a variety of tax increases.

In the ad a driver approaches the drive in window of a fast food restaurant:

(Sound of Douglas ad)
“Welcome to Clavelle’s can I help you?”
“Uh, how about a serving of Pete’s higher property taxes?”
“No, let me have a…”

(Kinzel) The basic tax disagreement between the two candidates involves efforts to reduce property tax burdens. Clavelle wants to explore raising new revenue by implementing either a local or state income tax. He then wants to use these new funds to help lower property tax rates.

Clavelle argues that a person’s income is a better measurement of their ability to pay to taxes:

(Clavelle) “You’ll recall last year that the Republican-controlled House of Representatives was prepared to bring forth an income tax proposal. The governor said ‘no way, no how.’ A Clavelle administration would put the income tax on the table with other taxes that would have the discussion as to what is the fairest and most equitable way to tax Vermonters.”

(Kinzel) Douglas supported increasing the state sales tax last session to help finance changes to Act 60, changes that reduced property tax rates in about 80 percent of all Vermont towns. But Douglas doesn’t want to consider using the income tax to further reduce property tax burdens:

(Douglas) “I’m reluctant to go to the income tax because we have a relatively high income tax compared to the rest of the country. And economists suggest that that would be a disadvantageous to the creation of jobs and our economic future.”

(Kinzel) The two candidates also sharply disagree over the issue of local option taxes. Act 60 allows so called “gold” towns to implement a local sales or rooms and meals tax as a way to help reduce pressure on the property tax if voters in that community support the plan.

At a recent debate, Douglas made it clear that he’s not a fan of local option taxes, while Clavelle strongly endorsed the concept:

(Douglas) “We have to realize that we don’t want raise the overall burden on the people of Vermont. So just allowing unlimited taxation opportunities, I think, relieves the pressure to contain spending at both the state and local level.”
(Clavelle) “The state has said that we have 16 taxes and don’t you even think of looking at any of those for your local needs. And this is not about opening the skies and saying, ‘tax as much as you want,’ Jim. This is about allowing folks at the local level to decide how they want to tax themselves.”

(Kinzel) The two candidates are participating in more than 18 debates this fall and Clavelle’s tax record as mayor of Burlington is a major theme for Douglas:

(Douglas) “Well Pete, you’ve been advocating lots of different taxes over the years in Burlington. I think that’s the concern that many taxpayers have: we don’t want to continue to tax Vermonters. We’re a heavily taxed state and we have to moderate that.”

(Kinzel) It’s charge that clearly irritates Peter Clavelle.

(Clavelle) “Jim, you’ve used this fear and smear tactic suggesting that Peter Clavelle is the big taxer. If you look at the effective tax rate for the city of Burlington you will find that it is among the very lowest in the state of Vermont. So please stop this nonsense about Peter Clavelle being the big tax and spender because if you look at the record that’s not the reality.”

(Kinzel) While both candidates say they want to avoid higher property tax rates by exploring ways to control local education expenses, neither one has released a detailed plan to achieve this goal.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

Thursday as we continue our close look at the governor’s race, VPR’s Nina Keck looks at how the presidential election affects Vermont politics.

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