Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Millionaire Tax topic
No spam. Unsubscribe anytime.
Rep. Kate McCann unveils proposal for new top tax bracket to fund education and transportation
Summary
Rep. Kate McCann introduced H.77 to create a new marginal tax bracket on taxable income over $1 million, modeled in part on Massachusetts' surtax; she said revenue would be directed to education and transportation and cited prior estimates and Massachusetts' early revenue results.
Rep. Kate McCann introduced H.77 on Feb. 28 to create a new marginal income tax bracket for taxpayers with taxable income above $1 million and to earmark revenue for education and transportation.
McCann said the idea was inspired by a Massachusetts ballot measure and described the proposal as a targeted way to raise revenue for the state—s pressing needs. She said Massachusetts voters approved a 4% surtax in an amendment to Article 44 on Nov. 8, 2022, and that Massachusetts collected about $1.8 billion in the first nine months after the measure took effect. McCann said Vermont needs revenue structures that are “strong, sustainable, and raising sufficient revenue to meet the state's needs.”
McCann cited income inequality data included with her introduction: she said the top 1% of Vermont taxpayers make on average 20 times the income of the other 99% and that if incomes for the bottom 99% grew as quickly as the top 1% between 1974 and 2022, the average income for the bottom 99% would be about $130,000 higher. She also noted estimates that recent federal tax changes have disproportionately benefited high-income taxpayers and referenced an estimate that the top 1% of Vermonters would save, on average, $54,000 a year under a cited federal plan.
Committee members asked technical and fiscal questions. One member asked whether the 12.75% rate in the proposal matched Massachusetts' rate; McCann said she believed it was the same number but was not certain. Members noted a very similar measure moved out of committee and through the House in the prior year but did not pass the Senate; McCann said that prior proposal was estimated to raise about $75 million a year. Committee members asked whether Massachusetts had experienced out-migration of wealthy taxpayers after the surtax; McCann said reports showed less movement than initially feared and that Massachusetts has raised more revenue than anticipated.
McCann said she proposed directing revenue to education because of her committee role and concern about education funding, and to transportation because the transportation fund has growing needs. The bill was introduced for committee consideration; no fiscal note, amendment, or committee vote was presented during the Feb. 28 hearing.
