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Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Shumlin, Lawmakers On Collision Course Over Tax Package

Shumlin on 042613 by kinzel IMG_0075.jpg
VPR/Bob Kinzel
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Governor Peter Shumlin and the Senate Finance committee are on a collision course concerning a new tax package.

The Governor didn’t like the tax package that was passed by the House last month and he doesn’t think m

uch of the proposal being crafted by the Senate Finance committee.

The committee’s draft plan caps mortgage interest deductions on the income tax, it creates a new minimum income tax rate and it imposes the sales tax on bottled water.

The Governor made it clear that he opposes the committee’s approach.

“You know where I stand but I’ll just say it once more just in case there’s any confusion,” said Shumlin. “This is not the time to raise income taxes, sales taxes, meals taxes on hard working Vermonters. It’s just not the time.”

Chittenden senator Tim Ashe is the chairman of the Senate Finance committee. He says capping mortgage interest deductions will affect a relatively small number of people, and will help keep taxes lower for everyone else.

“So some people will say it’s semantics the Legislature can’t find a tax that it doesn’t want to increase,” said Ashe. “But the reality is when you reduce a benefit that’s accruing for purposes that it was never intended you’re actually relieving taxes on everybody else who’s paying for it right now.”

The Senate package also includes a minimum 3 percent tax rate for all people who earn more than $125,000. Ashe says the plan is a matter of tax fairness.

“One of the dilemmas that we’re facing is that there are other very wealthy Vermonters who pay an extremely low percentage of their income towards taxes, in fact, lower effective rates than many middle class or even lower income people.” 

The Governor says he’s fighting these tax increases because he’s convinced they will undermine the state’s fragile economic recovery.

“We’re seeing the third lowest unemployment rate in America,” said Shumlin. “And if you really want to stall our economic recovery, raise every single broad based tax in Vermont and I’ll guarantee you’ll help slow it down.”

If the Senate Finance committee takes a formal vote on the plan this week, it could be up for debate on the Senate floor by the middle of next week.