The truth about Dean and Vermont taxes

I post this thread to let people look for themselves at Vermont's taxes before and after Dean's tenure. Here are two links which combined provide that picture.

www.state.vt.us/tax/majorvttaxes.htm
www.leg.state.vt.us/reports/tax/vol1-03.htm

The first link provides the current tax stucture of Vermont and goes back to 1998.

The second is a study commissioned in 1996 which looks at taxes from 75 to 95. Combined they give a reasonable look at before, during, and after Dean's governor ship.

I won't quote anything from either link due to the fact that there is no fair way to quote this in 3 to 4 paragraphs. I will give a synopsis of what is in them on income and sales taxes which are the bones of contention.

First on income taxes. Until 2001, Vermont based its tax rate on the taxes you paid the feds. Vermont charged a percentage of what the feds charged its citizens. When Dean took over he inherited a 28% tax rate which was scheduled to fall to 25% which was its usual rate. The 28% rate was the result of a special temporary tax hike to eliminate a deficit. That rate expired in 1993. In 1999, the tax rate was cut to 24% of federal taxes. In 2001 the tax code was decoupled from the federal one and the top rate was 9.5%. Obviously until 2001 Vermont was very dependent on US tax policy for setting its rates. Also, and equally obviously, Vermonts actions have to be taken in the context of those decisions. The effective marginal rate of that 28% tax was 9.9%. When it fell to 25% that rate only dropped to 9.75% due to the interviening Clinton tax increase (federal marginal rates went from 35% to 39%). When it was cut again in 99 it fell to 9.711%. Then Dean set it at 9.5% in 2001 which was an effective increase due to Bush's tax cut. Under Bush the marginal rate would have been 8.217%. So if you look at the 28% rate as what Dean inherited he cut rates very modestly (9.9% to 9.5%). But if you use the 25% figure and discount the Clinton tax increase it would have been an increase from (8.75% to 9.5%). No matter how it is sliced it is not Bush's tax policy.

On sales taxes Dean inherited a 5% rate which applied to all sales but food. It may have been cut to 4% in 97. Then increased to 5% in 98 with an exemption for clothes. It may not have been cut at all. But bottom line the net effect of Dean was to take a 5% sales tax, keep it 5% but not apply it to clothes. By any definition that isn't regressive. It also isn't increasing sales taxes as one poster likes to say it is.

I don't expect you to believe what I wrote. Look at the links.

If this looks familiar also posted this in the general discussion forum.

nor do I really want them, but I do have the point of view from a friend in Vermont who happens to be a conservative Republican, although far from a wingnut.

He tells me that during Dean's tenure there was a vast squawking from his end of the spectrum about Dean and his tax policies, and he was happily calling for Dean's head along with the rest of them.

This year, though, thanks largely to Dean's past policies, Vermont is one of the few, perhaps only, state that actually has a surplus in its budget.

He is not by any means a Dean supporter, but does admit grudging respect for a guy who does what he thinks is right and takes the hits. Particularly when it turns out all right after all.

He's not all that thrilled about the crew in the WH, and hinted he might be tempted to vote for Dean should the occasion arise, although he's still too Republican to say it outright.

He wouldn't be the first fiscal Republican to do so.

Which were high in 75, lower in 95, and rise again by 95 thir adjusted growth during the last yeas were the highest.

And your figures for taxation from 1992 at 11th place, move to third.

Major Source: US Census Bureau. Local revenue data from State Dept.’s of Revenue. See Appendix 6, Tables 2 & 21 for additional source information.

Among the 12 comparison states, the average state and local share of tax revenues is 61% state tax revenues and 39% local tax revenues. (See chart above.) Vermont, at 56% state revenues and 44% local (property tax revenues), has the third highest reliance on local taxes after New Hampshire and New York. New Hampshire relies on property taxes, while New York has local income and sales tax revenues in addition to property tax revenues.

Because of the significance of local taxes, we obtained FY95 state and local tax data for the 12 comparison states. The local data include local sales, property and income taxes, which are the primary sources of local revenue we identified and qualified.


Vermont’s state and local revenue share is similar to that in other states. What is atypical is the share of property taxes as a proportion of local taxes. Many other states have local sales and/or income taxes as well as local property taxes. In part, this is a New England phenomenon. States in other regions have more developed county governments, which rely on broader revenue sources.



http://www.leg.state.vt.us/reports/tax/vol1-02.htm

Major Vermont Taxes

There are fifteen major taxes listed here, and that does not inclide the minor staxes

http://www.leg.state.vt.us/reports/tax/vol1-03.htm

From the Institute on Tax and Economic Policy...non-partisan, and rather on thedemocratic centrist side.


Vermont’s Tax Code: No Breaks for the Poor and Middle Class
When all Vermont taxes are totaled up, the study found that:

The richest Vermont taxpayers—with average incomes of $686,000—pay 9.7% of their income in Vermont state and local taxes before accounting for the tax savings from federal itemized deductions. After the federal offset, they pay only 7.1%.

Middle-income taxpayers in Vermont—those earning between $27,000 and $44,000—pay 9.8% of their income in Vermont state and local taxes before the federal deduction offset and 9.5% after the offset—much more than what the rich pay.

“Vermont’s income tax is not progressive enough to offset the regressivity of its sales and excise taxes,” McIntyre said. “Taxes ought to be based on people’s ability to pay them, which means that the share of income paid in taxes should rise as income grows, not fall as is the case in Vermont.”

http://216.239.51.100/search?q=cache:fJRaEEEPn3gJ:www.itepnet.org/wp2000/vt%2520pr.pdf+Vermont+Taxation+regressive+Tax+institute&hl=en&ie=UTF-8


No matter what the tax breakdown looks like, what is most important is WHO pays more of a percentage their income in taxes anmd who pays the least. Between 1989 and 2000, there was a major reversal, in whicbh the burden was more and more, the lower the income level.

Talk about a recipe for inequality...

The state is now the levier of most propoery taxes and they provide heavy exemptions for incomes of 75k or lower. Those people pay a percent of their income instead of a percent of their propery. I don't think there is any valid way to compare property taxes due to that one act. It was intended to, and did, equalize revenue across the state. In any case I don't think it is Dean's fault that those taxes exist.

On edit I think gasoline, cigarette, and liquor taxes are on the whole good public policy. Especially when those taxes are dedicated to valid purposes. In Vermont the gas tax is for roads and the cig tax is for health care. All three items cause problems to society and should pay their way so to speak.

He is not responsible for either Clinton's increases nor Bush's decreases in federal taxes. Without those the rate was 9.9% when Dean took the job and 9.5% when he left it. If you use the more fair 25% rate that makes it 8.75% vs 9.5%. In the first case he very narrowly lowered taxes, in the second he actually increased them.

As to the sales tax he made it less regressive and didn't raise it (as you inacurately stated he did). That means his net effect was to make things better.

At worst he probably left taxes around the same (without property taxes being discussed) and in real life probably made taxes a little less regressive while instituting programs which made government better for the poor.

Because they discourage driving and encourage the use of public transportation, which is more environmentally efficient.

For me this is a dilemma between my self-interest and what I think is the best policy. I don't want to pay more for gas but I think in some ways a gas tax is a good thing. The problem is Philly does not have much of a public transportation system, and in South Jersey you cannot get anywhere without a car, so if you are going to have a high gas tax you have to have the public transportation there as an affordable and viable alternative.

How many people died because of Kerry's vote on the Iraq resolution?

But no one died because of the Iraq resolution, because it did not give Bush the authority to act without meeting the consitions of the act. Many people have diedd because bush did not abide by the terms of the act.

Sorry Thorstein, your namesake probably would have had Dean shot if he could have, and knew about him

We will never know how many thousands have been unable to get medical care becasue of Deans cuts. Becasue they had to choose between eating, paying te rent and going to the doctor. As Dean did not support universal health insuraance in Vermont, but threatened to veto legislation, all they had to rely on was medicaid, which Dean did nothing to improve. Clinton did. There is NO special medical program in Vermont that differs one iota from medicaid in other startes. All increases during Deans terms as governor werev results of federal changes, and no Vermont legislatiopn requested for by Dean.

"But no one died because of the Iraq resolution, because it did not give Bush the authority to act without meeting the consitions of the act."

Very subtle point there. I hope the American people can see your logic, because it sure looks like bullshit from here.

In my world, war is either justified or not. It is not a grey area. I hope you and your candidate like living in the twilight because that is where you are living.

PRESIDENTIAL DETERMINATION- In connection with the exercise of the authority granted in subsection (a) to use force the President shall, prior to such exercise or as soon thereafter as may be feasible, but no later than 48 hours after exercising such authority, make available to the Speaker of the House of Representatives and the President pro tempore of the Senate his determination that--
(1) reliance by the United States on further diplomatic or other peaceful means alone either (A) will not adequately protect the national security of the United States against the continuing threat posed by Iraq or (B) is not likely to lead to enforcement of all relevant United Nations Security Council resolutions regarding Iraq; and
(2) acting pursuant to this joint resolution is consistent with the United States and other countries continuing to take the necessary actions against international terrorist and terrorist organizations, including those nations, organizations, or persons who planned, authorized, committed or aided the terrorist attacks that occurred on September 11, 2001.

IRAQ WAR RESOLUTION

107th CONGRESS
2d Session
H. J. RES. 114
October 10, 2002

http://www.themoderntribune.com/war_against_iraq_-_joint_resolution_-_us_congress_-_use_of_military_force_against_iraq.htm

Here's what future President Dean said just days before:

"The greatest fear I have about Iraq is not just that we will engage in unwise conduct and send our children to die without having an adequate explanation from the president of the United States," he said. "The greater fear I have is the president has never said what the truth is, which is if we go into Iraq we will be there for 10 years to build that democracy and the president must tell us that before we go."

http://www.dre-mfa.gov.ir/eng/iraq/iraqanalysis_27.html

Yes he used Medicaid but to say that Vermont's Medicaid is no different from say Ohio's is just plain false. To use one personal example I would have insurance if I lived in Vermont and don't here (Ohio). That is because Vermont chose to use its Medicaid program to provide that insurance while Ohio doesn't. All Clinton did, and it was something, was let governors do what Dean chose to do. He chose to expand that program and use state dollars to do so. Dean chose to let people buy in. He chose to raise the income limits to the highest in the nation. He chose to do those things. It is nice that Clinton let him. And he deserves credit for that. But if Vermont had Governor Taft and Ohio had governor Dean then I would be insured and many, many Vermonters wouldn't be. And yes we did have President Clinton here too.

DSC - I couldn't have said that better myself.

Taft has done a job on Head Start, Meals On Meals, and others. Cut, cut, cut.

Vermont also doesn't have the money problems of Ohio or the lack of rainy day funds. Columbus OHIO was not even on the list to receive Homeland Security Funds - and where did the truck driving Al Queda guy live? COLUMBUS You would think that a fellow 'Sculls & Bones'(Taft and Bush) would look after each other more. I guess Taft sending Ohioans down to Florida to help re-count votes just weren't enough... :o

(and to think that Alfonzo Taft was its founder)

I would miss the likes of Voinovich or God Forbid Rhodes I would have told them they were insane. But Taft is a new level of horrible. Bad policies. bad governance, bad economics.

Nobody died because of Kerry voting for the resolution. I was disappointed in his vote, but had he voted against it, it would have passed 76-24 instead of 77-23. So as much as I support Dean, I don't think that is a very fair talking point, especially since i think that Kerry is one of the Dems who may have gone the other way if his vote would have been the difference.

If it was going to pass anyway, then wouldn't it have been easier to take an opposing stance? Kinda like his vote AGAINST Persian Gulf War 10+ years ago. Kerry's vote was about personal politics and ambition - which makes it even worse in my eyes.

sound judgements based upon evidence or lack of evidence on hand.

In 1991, Iraq was invading another country, and he should have voted in support of US action to stop it. That was not true in 2002. We were the sabre-rattlers in 2002.

Kerry voted against AN INVASION in 1991 because he felt we had not built up enough of a coalition. Despite taking heat for over 10 years, he still agrees with his vote, although he credits Bush Sr. with excellent success.

Kerry voted for ENFORCING A DISARMAMENT in 2002, but only after Bush Jr. exhausted diplomacy.

that state that Bush's agreement to go to the U.N., as the first action required by the act, comitted him to leaving the decision on how to handle Iraq in the hands of the Security Counsel, and that once he went to the U.N., he was obligated to let THEM decide on the correct time frames, the correct diplomatic actions, sanctions, or degree of use of force under the U.S. agreements under a number of international conventions and charters that the U.S. is signatory to.

Going to the U.N. to ask them to intervene or act regarding a charge that one nations is in violation of international law is an agreement to let the U.N. be the final arbiter between the two nations.

The president would only be able to act if he could prove that Iraq was about to actually attack the U.S. or U.S. interests or citizens or embasies abroad. By gong to the U.N. to act as intermediary, the U.S. agreed to U.N. rules regarding pre-emption. If he did not start the U.N. process, he could have done what he wanted and faced international criticism, but having started the process, he comitted himself under international law and agreements we have signed onto to wait until the Security Counsel made a decision.

Thats what the abstracts say, but now I have to read through a few hundred pages of arguments, and precedents set in the past when presidents have been brought to court in similar circumstances.

This seems to have happened far more times than anyone can imagine.

had he voted against it, it would have passed 76-24 instead of 77-23.

Jesus, if everyone in Congress voted a certain way because it wouldn't make a difference anyway.........Good LORD!!! What ever happened to making the right decision?

You have to inject this into every conversation, no matter how off-topic? It really casts doubts on your real motivations for me.

Of course, something tells me the Anyone-But-Dean club will find ways to distort what you have there, because God knows they don't let the facts get in the way of anything.

:kick:

Thanx dsc. I bookmarked, downloaded and mirror imaged all the links and this whole page. Excellent job and analysis.

http://www.SeattleActivist.org/Dean/DEAN-INDEX.html


YOU ARE THE COOLEST,




Dave (AmyStrange.com)

DU (slang/ folklore) Glossary (Dictionary): http://DUG.SeattleActivist.org/
Index of WMD Articles: http://WMD.SeattleActivist.org/

Here are some excellent resources and timelines of quotes and interviews and newspaper article quotes documenting the different things Bush and Co did and said for the last two plus years concerning the war in Iraq and WMDs (and other fun things) from the Howard Dean Website---even if you're not a Dean Fan, these are still excellent resources:

The Bush Administration And WMDs: Then And Now:
http://www.deanforamerica.com/site/PageServer?pagename=bush_wmd_summary

Niger-Uranium Timeline:
http://www.deanforamerica.com/site/PageServer?pagename=niger_timeline

Bush and WMD: Assumptions vs. Reality:
http://www.deanforamerica.com/site/DocServer/TikTok_-_Bush_-_Iraq_-_Side_by_Side.pdf?docID=781

The Bush Administration and WMD: What did they know and when did they know it?:
http://www.deanforamerica.com/site/DocServer/TikTok_-_Administration_-_Iraq_Deception.pdf?docID=762

I am beyond flattered.

damn you!!! I hate blushing grrrrrr grrrrrrrrr

Thank you for this post!

State income taxes are deductible on ones federal return. That is of much more benefit to the rich than to the poor as they are way more likely to itemize. Thus itemizers were not paying state taxes on their state taxes since they were paying a percent of their federal taxes. By decoupling the taxes like he did in 2001 he ended that practice and thus increased the taxes of the richest Vermontians.

:kick: I need the links for another post so I am kicking this.

I am by no means a tax guru.In fact when it comes to the tax situation a lot of the time i hear "waa waa waa waa" . Thank you for clarifying at least one effect that decoupling state income tax rates from the feds has. .

They still tax federal income which means that the state taxes are still deductable.

But only a part of it. It you cannot itemize deductions, if you are not rich enough, you dont get to deduct them at all, which means:

Vermont Taxes Poor and Middle-Income Families More than the WealthyLow- and middle-income families in Vermont pay more of their income in state and localtaxes than do the richest families in Vermont, according to a new study by the Institute onTaxation & Economic Policy.

“State and local governments are being called upon to take on more and more responsibilities,” said Robert S. McIntyre, ITEP’s tax policy director and lead author of the study,titled

Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. “When it comes topaying for services, Vermont has a moderately fair tax system.”

Vermont’s Tax Code: No Breaks for the Poor and Middle ClassWhen all Vermont taxes are totaled up, the study found that:#

The richest Vermont taxpayers—with average incomes of $686,000—pay 9.7% of their income in Vermont state and local taxes before accounting for the tax savings from federal itemized deductions. After the federal offset, they pay only 7.1%.#

Middle-income taxpayers in Vermont—those earning between $27,000 and $44,000—pay 9.8% of their income in Vermont state and local taxes before the federaldeduction offset and 9.5% after the offset—much more than what the rich pay.#

Vermont families earning less than $16,000—the poorest fifth of Vermont non-elderlytaxpayers—pay 10% of their income in Vermont state and local taxes, one and half times the share the wealthiest Vermonters pay.“Vermont’s income tax is not progressive enough to offset the regressivity of its sales andexcise taxes,” McIntyre said. “Taxes ought to be based on people’s ability to pay them, whichmeans that the share of income paid in taxes should rise as income grows, not fall as is the case in Vermont

http://216.239.51.100/search?q=cache:fJRaEEEPn3gJ:www.itepnet.org/wp2000/vt%2520pr.pdf+Vermont+Taxation+regressive+Tax+institute&hl=en&ie=UTF-8

Prior to Dean becoming governor, this indicates that the tax structure in Vermont was more progressive, and that during the time Dean was governor, taxation became more regressive. Whilestill moderately progressive, Dean was the governor to reverse this trend.

A look at the economic reversals during Deans tenure as governor is also apparant here:

Median family income for four-person families
Middle-income families in Vermont have not fared particularly well during the current economic expansion. The incomes of families in the middle of the income distribution stagnated over the 1990s. Median family income for four-person families was $53,691 in 1998, compared to its 1989 level of $53,103 (in 1998 dollars).

Income inequality
Income inequality in Vermont grew over the 1990s. In the late 1990s, the income of the wealthiest 20% of families was 8.4 times that of the poorest 20% of families. By comparison, in the late 1980s, the wealthiest 20% of families had 7.4 times the income of the poorest 20%.

Poverty rate
The poverty rate in Vermont grew during the 1990s, from 8.1% in 1987-88 to 9.6% in 1997-98. However, the poverty rate in Vermont in the late 1990s remained below the national rate (13.0% in 1997-98).

Wages
In Vermont in the 1990s, the wages of low-wage workers declined, while the wages of similar workers grew at the national level. In 1999, the inflation-adjusted hourly wages of low-wage workers (workers at the 20th percentile) were 0.4% lower than they were in 1989, but due to wage gains in the 1980s they remained 10.5% higher than they were in 1979. The wages of workers in the middle of the wage distribution grew over both the 1980s and 1990s. The inflation-adjusted median wage (the wage of workers in the middle) in 1999 was 12.2% higher than it was in 1979.

http://www.epinet.org/content.cfm/datazone_states_usmap_vt

NOne of this data refers to Dean directly, nor is it partisanly directed, but does indicate changes in Vermoont while Dean was at the helm of government there

Deductions make it like you never earned the money at all. If I earn 10k and have 9k in deductions/exemptions then I pay taxes on 1k. All taxes on the other 9k are removed. That is what a deduction is.

I conceed that non itemizers can't deduct. But also the supper wealthy ususally can't either due to the AMT. That leaves the upper middle class who get that deduction.

If you take a ten thousand dollar deduction from your GROSS INCOME, you do not get ten thousand dollars more back in your income tax return...


So if you get to deduct 5,000 dollar in state sales taxes from your gross income, you DO NOT GET THAT 5000 dollars back, it just lowers the income you can be taxed on, so you will pay a smaller federal income tax, but not 5,000 dollars less.

That is the fallacy of Deans repeal of the tax cuts not effecting the working poor and the working middle class.

A guy making a taking a 500 dollar home a month before the Bush tax cuts, takes home 550 after the cuts, But now lets say the states increased his property taxes by 600 dollar a yeat in order to adjust for cuts from the federal government. Well Dean repeals the tax cuts, his salary drops back down to 500 a month, and he still has to pay the extra 50 in property taxes. He gets to deduct 50 dollars from his gross income, but that does not lower his tax liability by the fifty he shells out. It may save him 5 or ten bucks

So now where is he, earning 50 dollars a month less, but still paying 50 dollars a month more in property taxes until or even if the state decided to DROP the taxes as the federal government starts ssending money to the states. Dean repeal of taxe cut has him 50 bucks in the hole every month.

A tax deduction IS NOT a tax credit. You do not get the same amount you get to deduct BACK from from the federal government. it just lowers the amount of money you end up paying taxes on, so a deduction is NOT worth losing the money from the tax cuts.

No where. But Dean's point isn't that state taxes are deducatable (in point of fact many aren't). He point is that due to the feds refusing to help states states have raised taxes. State taxes are more regressive in many cases than the taxes that Bush cut. Thus by removing the tax cut, funding states, he will end that shift.

n/t