Just over three months before the $100 million payroll tax is set to start, the House Ways and Means Committee has passed an additional $125 million in new tax increases. None of these tax increases are slated to go into Vermont’s education fund deficit, which means that the additional $230 million that is projected to be needed for the education fund will be accounted for in double-digit increases to property taxes, a possible new cloud tax, and additional options.

Tax increases passed by the House Ways and Means Committee include:

• $15.3 million – Increase in the Global Intangible Low Tax Income (GILTI) and Foreign Derived Intangible Income (FDII) taxes to increase the amount of revenue from foreign corporations doing business in Vermont
• $17.7 million – Increase in the top marginal tax rate of corporate income tax from 8.5% to 10%
• $74.9 million – New personal income tax bracket of 11.75% starting at $500,000 of income
• $17.5 million – Property transfer tax increase from 1.25% to 3.25% for transfer values greater than $600,000

Notably, these changes were voted out swiftly without the robust testimony and due diligence normally afforded for major policy changes, leading to speculation that this was strategic to gain approval amid the Friday deadline to pass these bills. The Vermont Chamber raised concerns about these new taxes and the lack of thoroughness in their review with both the committee and the Speaker of the House.

The vote count for the bills containing this breathtaking spending in the committee was split on party lines. If this is any indication of what is to come when these proposals hit the House floor, it will be up to the Senate to once again make choices that align with the fiscal reality of Vermont, and an already highly taxed population.

Legislators need to hear from you about your concerns. Please contact your Representatives before these proposals are considered by the full House next week and help them understand the collective impacts they will have on Vermont’s economy.