State Braces to Be Hit with Millions in New Taxes

State Braces to Be Hit with Millions in New Taxes

( – Vermont lawmakers are considering major tax hikes as part of their 2025 fiscal year budget.

The Vermont House of Representatives voted to approve the state spending plan during the last week of March, and around $125 million in new taxes could be levied by the state if the spending plan goes through. The proposed budget could increase foreign income tax, property transfer tax, corporate income tax, and would add an additional tax bracket for those who have an income of over $500,000.

If passed, the state would increase taxes on property transfers that exceed a value of $600,000 from 1.25 percent to 3.25 percent. It would also increase the top marginal tax rate for corporate income tax from 8.5 percent to 10 percent. The House is also debating a sales tax expansion as well as other potential taxes, such as on streaming services, soda, and candy.

The chair of the Vermont House Ways and Means Committee, State Rep. Emilie Kornheiser, a Democrat, claimed that the tax increases on the wealthiest residents of Vermont said it is an attempt to give everyone a “fair shake,” saying that middle-class Vermonters pay a “higher percentage of their income” than those who have a higher income.

However, State Senator Kesha Ram, also a Democrat, was critical of the tax increases, saying the tax hike on those who make over $500,000 was “not a very surgical approach” and said Vermonters will question what the taxes are going to be used for.

The Vermont Chamber of Commerce released a statement on March 22, urging lawmakers to vote no on the tax changes, suggesting the review of the budget was not thorough enough to justify the increases. Megan Sullivan, who works for the Chamber of Commerce, suggested a “holistic look” at the economy to develop a better understanding of Vermont’s current taxing capacity.

The Governor of Vermont, Phil Scott, signed the mid-year budget update on March 13 despite saying he was “deeply concerned” that it exceeded his proposed budget by $15 million.

The spending plan has yet to be approved by the state Senate.

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