Public Assets Institute: How to Close the Budget Gap--Fiscal 2016 and Beyond

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"Vermont is one of six states in the country that uses federal taxable income rather than adjusted gross income as the base for the state income tax. Because this base is lower, the state must set its top marginal rate higher than necessary to raise the needed revenues. Additionally, tax breaks that primarily benefit upper-income taxpayers unfairly burden lower-income taxpayers, while also reducing the amount the entire tax system raises. The state can lower marginal rates, increase revenue, and improve the progressivity of the tax system by eliminating itemized deductions and replacing personal exemptions with a refundable tax credit."

Read full report here.