Vermont Legislature SmartTranscripts:

[Emilie Kornheiser (Chair)]: Good morning. Today is Friday, January 16. I'm glad to be here with all of you. I'm so sorry. I'm so worried about. Really?

[Edward "Teddy" Waszazak]: Yeah. We're here.

[Emilie Kornheiser (Chair)]: I know. I wasn't here. I'm so sorry for the late start. Eboard Day is a special day. And really excited that we have, represent Waszazak introducing a few of his bills, I believe you're joined by a few other members. Yes. Do you all three wanna sit up there?

[David Yacovone]: Do you want me to?

[Emilie Kornheiser (Chair)]: You can stay where you are.

[David Yacovone]: Okay. Great.

[Emilie Kornheiser (Chair)]: If you don't wanna come sit. Okay. Great. Floor is yours, Teddy.

[Edward "Teddy" Waszazak]: Thank you, madam chair and committee on ways and means. I think I know everyone here. My name is Teddy Waszazak. I'm a representative from Barrie City. It is always a pleasure to be testifying before ways and means. So there are a couple of bills on the agenda, but I would like to talk mostly about h six twenty one, which is an act relating to personal income tax brackets. Before I dive into the bill, I would like to thank my fellow cosponsors, representative Blumley and representative for coming up to the 3rd Floor today, and would certainly invite them to add any thoughts or comments after we walk through the bill. So h six twenty one would adjust the Vermont personal income tax brackets by adding two new brackets at the top. The first bracket, the first new bracket would begin at incomes over $500,000 or more, and the second bracket would be for incomes over $1,000,000 The $500,000 bracket would increase by 3% and an additional 2%, so 5% total for those with incomes of $1,000,000 or more. We've heard over the past couple of days, and the impetus for this bill is just the fact that the rich are getting richer and the poor are getting poorer. While our federal government is handing out tax breaks to international corporations and the likes of Jeff Bezos, my constituents in Barrie City are struggling to get by every day. They're worried about making rent, they're worried about getting to work, they're worried about putting food on the table. They're also being hit with the double whammy of the rising cost of living and the expiration of the federal health care subsidies. Some of them are experiencing a more than double increase in how much they're paying for their health insurance. By asking those who are making a half million dollars or more to simply pay their fair share, we can make strategic investments to help those who are struggling to make it by in all of our communities. Construction workers like my dad, teachers, nurses, folks like myself who work as waiters and bartenders, the clerk at the local auto parts store, the deli guy at the general store, veterans and older Vermonters who are grappling with higher costs while dealing with fixed incomes. These are folks who need us to act, and these are the folks who we want to invest in as a state. We've already heard this year, and we'll get another update later today, how much the state coffers are struggling. The transportation fund is running behind, the general fund is reeling from federal spending cuts, and the Education Fund continues to experience growth, which results in unsustainable property tax hikes. Right now, our tax brackets max out at around $300,000 in income. At a time when income inequality and the wealth gap is growing, I don't believe that the current tax brackets reflect where we need to be. And on top of that, we heard testimony yesterday that the top 1% of Vermonters, the the wealthiest folks in our state, just received a $57,000 annual tax cut. That's a salary for a lot of that's more than a lot of my constituents make in a year. And those folks just got an annual tax cut of $57,000 while the lowest 20% of earners did receive a tax cut all of $2 a week. To me, this is a basic question about fairness. I don't think that it's fair for low and moderate income Vermonters to deal with the rising cost of living, while the wealthiest Vermonters are getting a tax break. This bill is about supporting low and moderate income Vermonters. This bill is about standing with and supporting working families. It's about creating a fairer, a more just, and a more stable tax base for our state. It's about making our state revenues more resilient in a time of federal uncertainty by bringing in over a 100,000,000 a year, A $100,000,000 a year from those who can most afford it. And I I think it's just about doing the right thing in a time when folks are begging us to act. So I I really appreciate the chair making time for these bills. I really appreciate the conversation. I'd certainly invite representatives Blumley and Magnumoni to offer any additional comments on this bill. Just quickly, the two other bills that are on this morning, h six nineteen, would impose a 3% surcharge on incomes over a million dollars. I just wanted to provide another option, another approach for the committee to consider as we're having conversations about raising revenues. And h six twenty is a wealth tax commission, a study which has previously passed the body in, I believe, 2024 to look at the wealth that we know is out there but is escaping taxation such as capital gains, unrealized gains. I had a boss that used to joke about how do we tax the yachts and the private planes and the value that those hold. So just thank you for the time. This year with federal funding cuts and education transformation, the affordability crisis that we've heard from our constituents about, it's been said in many committees that everything is on the table. And I wanted to introduce these bills so that this is an idea that is on the table. And I hope that we can pass some of these bills and support our neighbors. Thanks.

[Emilie Kornheiser (Chair)]: Representative Blumley and Giacavoni, do you have anything you wanna add?

[Robert Hooper]: I guess I have followed this committee's work in prior years when you discussed this as it related to housing. And I've talked with a number of my constituents quietly. The constituents who would be affected by this. And to a person I have heard, I think that's fair. Because I have a number of ways of shielding my income as a wealthier person. I have a number of ways. There are a number of benefits that come with being wealthier and given the needs in the state. Yeah, I know that my district is a pretty blue district and yet there are a number of people in my district who are also fiscally conservative. And so I chose solicit the opinions of folks who I knew, who I imagine might not be supportive. I, like Representative Waszazak, felt deeply that this had to be on the table as an option. It's not politically attractive, perhaps, but I'm thinking about the future of the state. And I don't think this is a quick fix to any one problem. I think it is about making the top part of the tax bracket as progressive as the bottom part of the tax bracket is. And so I felt it was worth a discussion here and was being grateful that Chittenden Reisser decided to bring it up today.

[Emilie Kornheiser (Chair)]: Oh, will you identify yourself a nurse?

[Robert Hooper]: I'm Robert Chittenden from Burlington. Thanks.

[David Yacovone]: Good morning, I'm representative Dave Yacoboni of Morristown. For all the reasons you've heard, I do endorse this strongly. I have spent some time trying to research the implications of these kinds of changes on what is referred to as axe flight. Some other states have moved in this direction, and thus far, there's been no evidence that there has been an exodus of people. I think when people look at Vermont as being one of the most beautiful, cleanest, healthiest states, I doubt if there'll be a rush to leave their grandchildren, their relatives, their family over an increase of this nature. But I know you'll have, should you pursue this further, I know your ROM, JFO staff can verify for you the evidence tax flight. I think that's meaningful, that's the only concern I've heard from friends in my district, most of them before I even finish the presentation, just scoff and say, of course. But there's more to it than that, of course. But thank you for the opportunity this morning to share my thoughts.

[Emilie Kornheiser (Chair)]: Thanks both for joining us and for coming all the way up those stairs.

[David Yacovone]: Well, it's good exercise on the other side.

[Emilie Kornheiser (Chair)]: Committee, any question?

[David Yacovone]: Thank you.

[Robert Hooper]: Do the lower level brackets increase as well, or you're just creating the two, because I see the estate tax increases. Did I read that right?

[Edward "Teddy" Waszazak]: I don't believe so. I'd like

[David Yacovone]: to think of housing for classification, but Those

[Kirk (Legislative staff, surname unknown)]: changes that you're seeing are just to update the statute based off The numbers that are there from 2003, they have to be updated in statute. They're updated annually, that's no point or any way that the statute doesn't get updated, so those are just catching the statute up during the current day.

[Unidentified Committee Member]: Okay, thank you.

[Kirk (Legislative staff, surname unknown)]: So the changes are the two brackets on the top there are the changes in these HVACs,

[David Yacovone]: these new brackets developed by the

[Kirk (Legislative staff, surname unknown)]: trust in The States.

[Robert Hooper]: Okay, thanks Kirk.

[Edward "Teddy" Waszazak]: I think that's a reflection of I think that low and moderate income Vermonters are paying as much in tax as they can afford to do right now. And I think that we've heard a conversation over the years of like, well, if we just raise the taxes on the wealthy, we can do anything we want, and that's not true. There are finite resources in the state, but I think that until we have the folks at the top paying their fair share, I don't think that we're having an honest conversation, but we can afford. So the intention of this bill is to be able to prevent tax increases on those low and moderate

[David Yacovone]: income folks in the future.

[Emilie Kornheiser (Chair)]: Thank you.

[Unidentified Committee Member]: Thank you so much. I just had to share, I talked to Mike Fisher about cliffs, and there is a cliff at around $60,000 I'm just putting this out there. The impact of the healthcare cuts, we aren't even getting our head around it, and if you earn $100 more than that, you get a $32,000 hit in terms of health care costs. We are going to be discouraging people from working, and are just our tax code is not serving for modules right now. So I appreciate you for pushing the conversation.

[Emilie Kornheiser (Chair)]: To not have it get sort of lost in the bolder proposals that are on the table, The study that you have in there for folks who weren't on the committee last biennium, we passed it on miscellaneous tax. And it was cut at the very end in the Senate in some negotiations about other things, or a refresher for people who work here. And I think it gets at a lot of the conversations we've been having over the last few days about just this question of like, that we talk about a lot, actually, even in the context of property taxes, of income versus wealth, and where, how people are making it work or not making it work, and how really, frankly, little we understand about what's happening in Vermont with regards to people's incomes. Joyce's report was incredible, and they've really sort of named the things that need to be known more than having definite solutions. I appreciate you including that as well. Anyone else? Yeah. I know we're not a

[Unidentified Committee Member]: policy committee, but We are, we're

[Emilie Kornheiser (Chair)]: a tax policy committee. And

[Unidentified Committee Member]: what I hear is people believe in supporting their fellow Remodges. As a body, we also have to think about how we deliver. Was kidding about the flat tire, but if the flat tire prevents you from getting to something that you need and you lose custody, if This was a person who was there to get support applying for childcare subsidies, it took her an entire day to go through that process. There's also a tax on less wealthy Vermonters of time. And we have to be talking about the way we write policy in ways that prevent people from working and prevent people from doing what they need to do. Because there's two sides to this, and I think we spend a lot on the revenue side. We also need to revisit how we design policy on the other side.

[Emilie Kornheiser (Chair)]: I think one the things that's exceptional about tax credits and tax policy is that they are so much more straightforward than some of the more arcane benefits that the federal government has created and we've exacerbated. And that we have yeah. I just I'm gonna talk about The rest of my sentence was and that we've exacerbated at the state level. Anyone else?

[David Yacovone]: Okay. Thanks.

[Emilie Kornheiser (Chair)]: Good. Thanks, everyone. And give her the floor, and then the e board meeting starts at ten. Sorcha won't be up here to project it because she'll be down there running the IT. Right?

[Edward "Teddy" Waszazak]: Yep. We're here.

[Emilie Kornheiser (Chair)]: You are welcome to come to the eboard downstairs. You're welcome to come here. Whatever works for you. We'll all be back here at 01:15.

[Robert Hooper]: At 01:00.

[Emilie Kornheiser (Chair)]: At 01:00.