A large group of advocates will ask lawmakers in January to increase taxes for Vermont's highest wage earners, saying the money is needed to bolster housing, health care, and other needs that are increasingly out of reach for low- and middle-income Vermonters.

Adding a 3 percent surcharge for people earning $500,000 or more would raise $100 million annually, according to the new campaign, called Fair Share Vermont. And it would help put to rights a lopsided tax policy that has increasingly favored the rich, the group said.

“We too often have heard we don't have enough money. Not enough money for clean water, not enough money for affordable housing, not enough money to repair our schools,” Don Tinney, president of the state's teachers' union, Vermont-NEA, said at a Statehouse press conference on Thursday. “But you know who always seems to have enough money? Vermont's wealthiest residents, because of decades of tax policies that favor the accumulation of individual wealth instead of the common good.”



Anika Heilweil, who works at Public Assets Institute, is manager of the initiative, which has backing from the American Civil Liberties Union of Vermont, Vermont Conservation Voters, the Vermont Natural Resources Council and other groups. Heilweil said the proposal would only affect the wealthiest 2 percent of Vermont taxpayers.

The campaign’s supporters were short on other details on Thursday, saying the proposal would need to be refined in the coming legislative session. They listed only one legislator who is on board so far: Rep. Emilie Kornheiser (D-Brattleboro).

As chair of the House Committee on Ways and Means, Kornheiser leads the panel that will get a first look at the proposal.

Kornheiser said on Thursday that the size and breadth of the coalition sets the new tax-raising proposal apart from other more narrowly focused tax-raising campaigns that lawmakers see almost every year. The timing is right, she added; Vermonters seem to be struggling more than in prior years to pay their bills in the face of inflation and rising costs.

“As we recover from the pandemic and from the floods, it feels more stark this year,” she said of poverty in Vermont.

When he was running for governor in 2020, Lt. Gov. David Zuckerman proposed a tax on the wealthiest 5 percent of Vermonters to pay for expanding broadband coverage and increasing climate change initiatives. Zuckerman, who lost that election to Gov. Phil Scott, noted on Thursday that an income of $500,000 is nearly 10 times as much as the average earnings of a Vermont worker. He wasn’t familiar with Fair Share Vermont's proposal.

“I have not seen the numbers behind it, so I certainly want to dig deeper,” he said. “As a concept, I support it 100 percent. We have tremendous unmet needs, and Vermonters are really struggling.”
Rep. Bill Canfield (R-Fair Haven), vice chair of the Ways and Means Committee, was more reserved, noting that lawmakers this year approved a payroll tax to raise an estimated $120 million for the childcare financial assistance program. That increase goes into effect in July.

“I’d need to hear more,” he said of the Fair Share Vermont proposal.

Critics of Vermont’s tax policy often say the high cost of living and doing business in the state deters people from moving here or prompts them to leave.

Vermonters do face higher-than-average taxes. Analyses vary, but a study published by NPR in March ranked Vermont fourth in the country for the overall costs borne by taxpayers, after New York, Hawaii and Maine. Vermont's marginal tax rate — the tax paid on an additional dollar of income — is eighth highest in the country, according to the Tax Foundation.

Craig Bolio, commissioner of the state Department of Taxes, said adding 3 percent to the highest marginal tax rate would put Vermont at No. 2 in the country, behind California.

"Most of the states that have taken this approach, like New York and California, have seen people leave the state," said Paul Dame, chair of the Vermont Republican Party. "We already have a pretty high tax burden."

Heilweil said raising taxes on the rich wouldn’t drive people away.



“It’s a myth that wealthy people tend to leave the state because of high taxes,” she said. “Wealthy families have the ability to choose where to live based on communities that have a rich social infrastructure. By investing in Vermont, we can actually create communities that draw people in.”

After the press conference, Heilweil walked over to a large, green rectangular cake iced with the words “Vermont Millionaires Cake.” As she cut a slice, she declared that the cake represented the income of Vermonters making more than $500,000 annually.

“We’ll be taking out a 3 percent slice of that income,” she said. “Vermont millionaires can have the rest of the cake — and eat it, too.”