Vermont Tax Reports

This list provides links to official reports and studies by nonpartisan nonprofit groups about Vermont’s tax structure, in support of our mission to ensure adequate funding for the VSCS. This posting does not imply a particular stance by VSCS Thrive! on the relationship of Vermont tax structure to achieving our goals.

Among other things, these reports provide data suggesting that Vermont, over the time periods addressed, has been or is:

• Relatively progressive on income tax.
• Relatively regressive on municipal and property tax.
• Has roughly average property tax levels compared with neighboring states.
• Is losing many lower income residents, but at the same time gaining a much smaller number of very high income (and mostly younger) residents, such that the tax base itself has only declined slightly.
• Potentially in danger of tax revenue declines due to aging of the population.
• Is ranked “bad for business” in terms of tax policy by entities such as Forbes, but at the same time actually ranks better than many of the states ranked “best for business” by these same entities in terms of per capita income and GDP growth.
• The Vermont Public Assets Institute estimates that already identified tax reforms might be able to save about $25 million, which is roughly the additional increase need to raise VSCS’s funding to the 30% level from it’s present 17% level.

Links to Reports

• Vermont Budget Breakdown, by the Agency of Administration
• The Vermont Tax Study, 2005-2015, Joint Fiscal Office, January 17, 2017
  • Possible loss of tax revenues due to aging population.
  • Progressive income tax rate.
  • Regressive consumption taxes.
  • Flat property tax rates
• Report to the Governor and the General Assembly: “Making Economic Development Policy: Anecdotes or Peer-Reviewed Literature”, State Auditor, Douglas R. Hoffer, July 9, 2018
  • Discussion of “bad for business” rankings (pages 59-62)
  • Overall assessment of the progressiveness or regressiveness of Vermont’s tax burden (pages 63-68).
• Issue Briefing on the relationship of state-to-state migration and Vermont tax burden based on IRS evidence, Joint Fiscal Office, October 8, 2019.
  • “This data shows only a weak linkage between differences in state tax burdens and net migration for the population as whole.”

• Issue Briefing on the tax revenue impact of state-to-state migration based on IRS evidence, Joint Fiscal Office, August 26, 2019.
  • Concludes that Vermont lost many lower-income residents but gained enough high-income (most younger) residents to roughly remain level in tax revenue.

• Summary Comparison of Vermont Property Taxes to Peer States, Vermont Department of Taxes, apparently based on circa 2017 data.
  • Concludes that Vermont property taxes are roughly in the middle of those in our neighboring states, while property tax relief exceeds that of all neighboring states.
• “Who Pays?”, Report by ITEP (Institute on Taxation and Economic Policy – nonpartisan nonprofit tax policy analysis group), October, 2018.
  • Ranks Vermont as the third most equitable state in the US terms of tax policy.
• “Meeting Vermonters’ needs in Fiscal 2018 and beyond.” Report by the Vermont Public Assets Institute.
  • Commentary from the Institute to VSCS Thrive!: “This plan was proposed by the One Vermont coalition three years ago to balance the state budget without cuts in fiscal 2018.  The plan would have saved over $50 million in tax expenditures at the time. The Legislature has enacted some of these reforms since then. While we haven’t updated this analysis, it can reasonably be expected that if they enacted the remaining reforms they could free up at least $25 million a year going forward.”