Ways & Means opens tax workshop series with primer on tax bases, rates and six guiding principles

The Ways & Means Committee convened the first of a four-part tax workshop series where Legislative Council analyst Kirby Keaton and Joint Fiscal Office Associate Fiscal Officer Chris Roop explained basic tax concepts and the trade-offs lawmakers face when drafting tax policy.

Keaton, who handles the tax portfolio for Legislative Council, framed tax policy in three parts: the tax base, the tax rate and tax liability. He told the committee that "one way of thinking about this is you take a tax base, you multiply that by your tax rate, and you get the tax liability." Keaton emphasized that exemptions, deductions and credits shrink the base and create compliance costs for taxpayers and administrators.

Roop outlined what he called the six principles of a high-quality tax system — sustainability and reliability, fairness, simplicity, economic competitiveness, tax neutrality and accountability/transparency — and walked through how Vermont’s current tax features…