(Host) Members of the Progressive Caucus in the Vermont House say they back Governor Jim Douglas’ plan to eliminate the 40 percent exemption on capital gains revenue.
But the Progressives would like to take the 15 million dollars raised by this action and use it to meet some of the state’s budget needs. Douglas has proposed using the money to reduce personal income tax rates.
Speaking Tuesday night on VPR’s Switchboard program, Burlington Representative Steve Hingtgen said he supports the governor’s plan because it represents a fairer tax policy for the state:
(Hingtgen) “Interestingly, Governor Douglas has come up with several very good ways to raise some money. And the question is whether we’ll be following through on that, or he will be following through on that. A couple of those things – one is to close the capital gains loophole. And the capital gains loophole is a loophole in the tax code that allows for money that’s earned through wages to be taxed at a much higher rate than money that is received from, let’s say, the sale of stocks and bonds.”
(Host) Burlington Representative Bob Kiss says the money from the tax plan could be used to meet several of the pressing health care needs facing the state:
(Kiss) “People on Medicaid now don’t get eyeglasses as part of that program, they don’t get dentures if they need them. And now we’ve created a premium program for people on extended Medicaid that, I suggest, is going to drive 30 percent of those people off the program because they can’t afford the premiums. But those are some of the elements of government now that are out there and we’ve approved them as a Legislature. But I think they’re clear, unmet needs and if we had more money we probably need to address them.”
(Host) The governor’s tax plan is being reviewed by the House Ways and Means Committee but Republican leaders are reluctant to bring the measure to the House floor. They’re concerned that revenue from the proposal won’t be targeted to reduce tax rates but instead will be used to boost spending.