By Win Smith, Chair
and President, Sugarbush Resort
Once again the House has passed a tax bill and sent it along to the Senate for their consideration.
Last year we spoke about the ongoing “death by a thousand cut” approach that has been coming out of Montpelier for the past several years. Another few cuts have been proposed by the House.
Rather than taking a strategic approach to tax policy, it seems that Ways and Means Committee is again in search of taxes that will receive the least howls from voters. Rather than slow our rate of spending to match our economic growth, our legislators are again raising taxes and fees.
On the surface, the increase in mutual fund registration fees sounds reasonable. After all, Vermont’s fees are lower than the other New England States. What isn’t explained, though, is who really pays for the fees. It is not Blackrock, Fidelity, or other Wall Street managers of the funds, it is the investors. You and I and our employees who are buying funds in their IRAs and 401-Ks. These fees are part of the expenses of the funds and one’s return is net of the fees. This small increase will not be visible to most, but if we increase ours and others then increase theirs, ultimately the increase will become material.
Then we have the increased deposit tax on the largest banks operating in Vermont. The message here seems to be, “we love business if you are small, but don’t get big or we will tax you.” Once again this tax increase does not seem strategic but rather arbitrary. After all these days, who likes “big banks”? Why would JP Morgan, Bank America, Wells Fargo or others want to do business in Vermont if they see this message? Our Vermont banks do a good job of supporting businesses in the State, and contribute significant philanthropic dollars to our communities, but many of our businesses benefit from competition and need the services that only larger banks can provide.
And finally, there is the move to increase the fee on uninsured workers and this one directly impacts seasonal business like mine. Rather than address the growth of Medicaid and figuring out how to fund it appropriately, another tax is suggested, which unfairly burdens a group of businesses. We offer health insurance to all 155 of our full-time employees, but our winter payroll grows to nearly 1,000 and some of these part-time employees do not signify that they have insurance for a variety of reasons. Some are not even residents of Vermont. Again, this just increases our cost of doing business compared to our competitors in other States.
These tax and fee increases are not mortal wounds, but we are getting closer. What is needed is what we have said before. Let’s dust off the Blue Ribbon Tax Structure Commission report. It was an excellent piece of work. It was bi-partisan and strategic, and I believe it is still worth pursuing many of their recommendations, if not all of them.