Shumlin’s Tax Initiatives Face Opposition

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A number of Governor Peter Shumlin’s new tax initiatives face strong opposition at the Statehouse and this disagreement could affect a number of the Governor’s top legislative priorities.

The Governor says his overall tax policy has one clear objective. He won’t support an increase in the income tax, the sales tax or the rooms and meals tax.

"Don’t raise broad based taxes," said Shumlin. "I say that because Vermont’s biggest problem is not that our taxes are not high enough it is that they are too high and every time we raise them we add to the burden that we currently have in the state."

Calais Rep. Janet Ancel is the chair of the House Ways and Means committee. She doesn’t agree with the Governor’s philosophy on broad based taxes.

"I think the whole question of you know is it a broad based tax or isn’t a broad based tax really misses the point," said Ancel. "I think the point that we need to ask ourselves is are we going to raise revenue to do the things that we feel we need to do and if we raise revenue how do we do that equitably and fairly."

Senate Finance chair Tim Ashe notes that the Governor has proposed increasing the state gas tax.

"So it is a definitional question and at the end of the day it’s sort of beside the point. The real issue is are we raising the appropriate amount of funds to pay for the appropriate priorities."

Shumlin wants to impose a 10 percent tax on the sale of break open tickets. He says this tax will raise roughly $17 million for several important energy programs.

But the Legislature’s Joint Fiscal committee thinks the tax will raise only $6 or $7 million and Ways and Means chair Ancel thinks even this lower estimate is far too optimistic.

"I wouldn’t be surprised if as we continue to look at this we discover that there’s really very little revenue that could be realized here."

Shumlin also wants to take $17 million from the state’s earned Income Tax Credit program to fund new child care subsidies.

But Senate Finance Chair Ashe says the Governor’s plan will hurt as many as 40,000 low income working Vermonters.

"So the question that each of us have to look at when we evaluate the governor’s proposal with the EITC or any other one and this is how I phrase it I say why was I put on this planet ?" said Ashe.

"Was I put on this planet to move the dial to the negative for low income workers or to the positive? And for me the answer is I was not put on this earth to move people to the negative."

Both Ashe and Ancel says lawmakers will have to look for other funding sources if they support the Governor’s child care subsidy and energy initiatives and that could lead the discussion back to a broad based tax.

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