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Experts say homestead exemption risks preserving regressivity; Tax Department recommends $400,000 cap
Summary
Witnesses debated proposed changes to Vermont's homestead exemption. Public Assets Institute warned the plan would preserve regressivity and create winners and losers; the Tax Department recommended a $400,000 cap on the exemption and highlighted administrative advantages and timing benefits.
Stephanie Yu of the Public Assets Institute told the committee that a proposed homestead exemption would perpetuate the regressivity of Vermont's current property-based system and would produce different bills for homeowners with the same income but different home values. "Because higher income taxpayers are essentially held harmless under this plan, it's really just redistributing the taxes among Vermonters under $115,000 in household income and creating different winners and losers," Yu said.
Jake Feldman of the Tax Department recommended limiting an exemption to a $400,000 up‑to‑limit, saying the department's modeling shows that a $400,000 cap would cost about $35,000,000 compared with an unlimited exemption…
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