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Expert tells Ways & Means HR 1 yields regressive cuts; Vermont faces choices to claw back or bolster low-income supports
Summary
Carl Davis (Institute on Taxation and Economic Policy) told the Vermont Ways & Means Committee that the federal HR 1 tax bill produces largely regressive benefits, with modest average gains for low-income households and outsized cuts for the highest earners; he urged the state to consider targeted responses and strengthened compliance.
Carl Davis, a tax analyst with the Institute on Taxation and Economic Policy, told the Ways & Means Committee on Jan. 15 that the newly enacted federal HR 1 produced a broad set of tax cuts that fall disproportionately on higher-income households.
"The tax package is a regressive tax cut," Davis said, citing Joint Committee on Taxation tables and ITEP’s Vermont-specific microsimulation. He summarized the package as including rate reductions, a pass-through deduction for business income, estate tax cuts and a larger standard deduction, while noting modest average gains for low-income households.
Davis said the JCT…
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