October 17, 2018

Vermont: Who Pays? 6th Edition

VERMONT

VERMONT STATE AND LOCAL TAXES

Taxes as Share of Family Income

					Top 20%
Income Group	Lowest 20%	Second 20%	Middle 20%	Fourth 20%	Next 15%	Next 4%	Top 1%
Income Range	Less than $21,200	$21,200 to $39,100	$39,100 to $59,500	$59,500 to $94,000	$94,000 to $196,000	$196,000 to $460,100	over $460,100
Average Income	$11,500	$29,200	$49,200	$74,800	$131,100	$279,700	$993,600
Sales & Excise Taxes	5.1%	4.3%	3.8%	3.2%	2.2%	1.3%	0.6%
General Sales – Individuals	2.0%	2.0%	1.9%	1.7%	1.2%	0.8%	0.4%
Other Sales & Excise – Ind.	1.9%	1.2%	1.0%	0.7%	0.5%	0.3%	0.1%
Sales & Excise on Business	1.2%	1.1%	0.9%	0.8%	0.5%	0.3%	0.1%
Property Taxes	3.9%	4.7%	4.7%	3.7%	5.0%	4.5%	3.5%
Home, Rent, Car – Ind.	3.5%	4.6%	4.3%	3.4%	4.6%	3.7%	1.6%
Other Property Taxes	0.3%	0.2%	0.5%	0.3%	0.4%	0.8%	1.9%
Income Taxes	-0.3%	0.0%	1.5%	2.2%	3.2%	4.2%	6.3%
Personal Income Tax	-0.3%	0.0%	1.4%	2.1%	3.1%	4.1%	6.1%
Corporate Income Tax	0.0%	0.0%	0.1%	0.0%	0.1%	0.1%	0.2%
TOTAL TAXES	8.7%	9.0%	10.1%	9.1%	10.4%	10.0%	10.4%

Individual figures may not sum to totals due to rounding. Download the table

TAX FEATURES DRIVING THE DATA in Vermont

Progressive Features	Regressive Features
Graduated personal income tax structure Provides a refundable Earned Income Tax Credit (EITC) Provides a refundable property tax “circuit breaker” credit to low-income taxpayers via the income tax Many resident homeowners pay school taxes based on income rather than property value Provides a partially refundable dependent care tax credit Sales tax base excludes groceries Requires the use of combined reporting for the corporate income tax Levies a state estate tax	Provides a capital gains tax break Comparatively high cigarette tax rate

Progressive Features

Regressive Features

Graduated personal income tax structure
Provides a refundable Earned Income Tax Credit (EITC)
Provides a refundable property tax “circuit breaker” credit to low-income taxpayers via the income tax
Many resident homeowners pay school taxes based on income rather than property value
Provides a partially refundable dependent care tax credit
Sales tax base excludes groceries
Requires the use of combined reporting for the corporate income tax
Levies a state estate tax

Provides a capital gains tax break
Comparatively high cigarette tax rate

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Vermont’s state and local tax system does not worsen income inequality and ranks 49th on the index. The large income gap between lower- and middle-income taxpayers, as compared to the wealthy, is somewhat narrower after state and local taxes than before. (See Appendix B for state-by-state rankings and the methodology for additional detail on the index.)

Note: Figures show permanent law in Vermont enacted through September 10, 2018, at 2015 income levels. Top figure represents total state and local taxes as a share of non-elderly income. The sixth edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.