On the brighter side, the commission rejected two bad ideas, an unenforceable wealth tax and a value-added tax hidden in the price of goods in place of the visible sales tax. It did lamely “support the use of tax credits and exemptions to reduce the upfront cost of some investments that will make the transition possible, even though in general the commission strives to keep the tax base as broad as possible.” As usual, it noted that revenues from any carbon tax should be used to diminish the burden on lower-income families caused by … the carbon tax. The commission did, however, stop short of urging a carbon tax or cap-and-trade system to make motor fuel and heating oil so expensive that Vermonters can’t afford them anymore. Its report avers that “when accounting for the environmental and health benefits, all options considered by the decarbonization study commissioned by the Legislature would result in net benefits.” Actually, the decarbonization report found that the only way decarbonization of Vermont could produce enough “climate benefits” to overcome the conceded loss of economic welfare was to include undefined global benefits enjoyed by the whole world. Shumlin’s characterization) of the coming climate change end times, without asking whether that mantra is scientifically defensible. The commission obligingly recites the horrors (Gov. So it’s no surprise that the commission addresses taxation as a technique for exacting that contribution. The Legislature that commissioned the report was eager to force everybody to contribute to the campaign to defeat the menace of climate change. ![]() ![]() The commission recommends some mechanism to hold low-income persons harmless from the effects of the tax on services and goods (notably food) not now taxed but people with incomes above the lower-income line would of course pay the full freight. Most, if not all, of the groups targeted by the services tax will clamor to be exempted, like “health care.” As the exemptions mount, the promised 3.6% tax rate creeps up to 4%, then 5% and maybe further, to raise the same amount of revenues as today’s 6% rate. A sampler: attorneys, architects, accountants, engineers, plumbers, electricians, excavators, truckers, taxi drivers, barbers, cosmetologists, auto repair and investment counselors. The report lists 121 services that could be covered. It’s hard to imagine a single tax change that would produce a more politically potent reaction from thousands of Vermonters faced with collecting and paying the tax over to the government. ![]() As a sweetener, it says that the sales tax rate could be lowered from 6% to 3.6%. It proposes that consumers pay the sales tax on scores of service transactions, other than business-to-business exchanges, casual exchanges, and - the big one - health services. The commission wants the sales tax to fall on the widest possible range of goods and services. What economic effect it would have by driving up the income tax rate schedule remains to be seen. The commission believes this will be an improvement.
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