Source: Public Assets
Income inequality is already growing in Vermont. And if Congress has its way on tax reform, that problem will get worse.
Analysis released yesterday by the Institute on Taxation and Economic Policy shows that, like the House plan from earlier this month, the newly released U.S. Senate’s tax plan helps Vermonters at the top the most.
Nationally, the plan is heavily tilted in favor of upper-income households and profitable corporations. The top 1 percent gets around one-fourth of the total tax cuts and the top 5 percent receive half of the tax cuts. In Vermont, 60 percent of the benefits go to the top 20 percent of taxpayers.
Under the Senate plan, the top 1 percent of Vermont taxpayers would on average get a tax cut of $21,910, growing to $29,820 by 2027. Meanwhile, the bottom 20 percent of taxpayers would save an average of $100 in 2019 and $200 in 2027.
Both plans would add $1.5 trillion to the federal deficit over 10 years. And both plans would substantially cut taxes for corporations and those with the highest incomes, while providing minimal relief for most working families, and in some cases actually increasing taxes for those families.
The plans also have a number of differences, among them how they handle the estate tax, the mortgage interest deduction, and the deduction for state and local taxes. But these differences don’t change their overall aim to lower taxes for corporations and high-income taxpayers.
Neither plan would provide much help to low- and moderate-income Vermonters. And the cuts to education, health care, infrastructure, or other public services that would be needed to pay for these plans would hit working families especially hard.