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Rep. Teddy Wozozak proposes two new top income-tax brackets to raise about $100 million
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Summary
Representative Teddy Wozozak introduced H.621 to add tax brackets for incomes over $500,000 and over $1,000,000, increasing top rates by 3% and an additional 2% (5% for $1,000,000+). Supporters said the change would protect low- and moderate-income Vermonters; no vote was taken.
Representative Teddy Wozozak, a lawmaker from Berry City, told the Committee on Ways and Means on Jan. 16 that he would focus the committee’s attention on H.621, “an act relating to personal income tax brackets,” which would add two new top tax brackets and raise projected revenue for state priorities.
"The first new bracket would begin at incomes over $500,000," Wozozak said, and the second would apply to incomes "over $1,000,000." He said the $500,000 bracket would increase taxes by 3% and an additional 2% would apply at the $1,000,000 level, resulting in a 5% increase for incomes of $1,000,000 or more. He described the plan as a fairness measure amid widening income inequality and estimated the change could bring in "over a $100,000,000 a year."
Wozozak framed the proposal around constituent pressures. "The rich are getting richer and the poor are getting poorer," he said, adding that many constituents struggle with rent, transportation and sharply higher health-insurance costs.
He also presented two related options: H.619, a 3% surcharge on incomes over $1,000,000, and H.620, a proposal to create a wealth-tax commission that previously passed the body in 2024 to study wealth that may be escaping taxation, including unrealized capital gains.
Supporters on the committee said the measure deserves a full hearing despite political risks. A cosponsor identified in the transcript as Representative Blumley said the proposal aims to make the top of the tax code "as progressive as the bottom part of the tax bracket is." Representative Dave Yacoboni (Morristown) said he has researched the risk of out-migration tied to higher rates and that "thus far, there's been no evidence that there has been a an exodus of people," adding that Joint Fiscal Office staff can verify empirical effects.
Committee members asked staff whether the bill would change lower brackets; a staff participant identified as Kirk said some statutory figures in the draft reflect old (2003) numbers and that the two new brackets were "tied to trust and estates" language in the statutory update, clarifying that some edits are technical updates to current statute figures.
Several members cautioned about unintended consequences. One member relayed a conversation with Mike Fisher about benefit cliffs, saying there is a cliff near $60,000 and warning that small income increases can trigger large healthcare-cost changes. The speaker described the potential impact as, in their words, a "$32,000 hit," and urged careful policy design so that tax and benefit rules do not discourage work.
No formal votes or motions were recorded on the proposals during this session. Committee members referenced Joyce’s report and JFO staff analysis as sources for additional data and said more detailed costing and drafting will be needed before any final action. The meeting recessed for eBoard business; committee members said they would reconvene at 1:15 p.m.
The committee did not take action on H.621, H.619 or H.620 during the morning session; the proposals were introduced and debated for informational purposes and further study.
