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Representative Cole's proposal to add top tax brackets falls short in committee straw poll
Summary
Rep. Cole proposed two new top marginal brackets (3% above $500,000; 2% above $1 million), citing $100'$200 million in annual revenue. Members raised questions about inflation adjustments, tax flight, and whether the committee had sufficient testimony; the committee declined the amendment in a straw poll.
Representative Cole presented an amendment to add two new top marginal brackets to Vermont's personal income-tax schedule: a 3% surcharge on income over $500,000 and an additional 2% on income over $1 million. Cole told the committee the change would raise between $100 million and $200 million annually based on prior analyses of H621.
"This amendment adds two new income tax brackets to Vermont's personal income tax structure," Cole said, outlining the revenue range and arguing the change would make taxation more proportional and allow funding for unmet program needs.
Members asked technical questions about how the amendment handled statutory inflators and bracket indexing; sponsors said most of the complicated-looking statutory language was mechanical to capture the current inflated brackets. Several members raised concerns about the state setting the nation's highest marginal rate and the possibility of tax-driven migration; others said the middle tier currently bears a disproportionate share of the tax burden.
Committee members also cautioned that the committee had not taken full testimony needed to understand the amendment's implications, and some expressed concern that the measure could be vetoed if it reached the governor's desk. After discussion the committee held a straw poll and declined to move the amendment forward during this hearing.
Why it matters: The amendment would materially change Vermont's tax structure and could raise substantial revenue for state priorities if enacted; it touches on equity, competitiveness, and budget trade-offs.
What comes next: The sponsor said the amendment was intended to spark further debate; because the committee declined the amendment by straw poll, any next steps would require additional testimony or a different vehicle.
