Editorial in today's Rutland Herald and Times Argus
Published: June 11, 2011
The grass-roots movement that pushed successfully for health care reform this year hopes to broaden its efforts on behalf of broader forms of economic justice.
At the same time economic numbers recently released may take the steam out of efforts to reshape the state’s tax code in a more progressive way.
The Vermont Workers’ Center was responsible for a well-organized and persistent campaign it labeled Health Care Is a Human Right, which was a constant presence in Montpelier as the Legislature moved toward adoption of a single-payer health care system. Not only was the campaign successful in organizational terms, the assertion that health care is a human right created a firm ideological foundation that strengthened the campaign as a whole.
Now the Vermont Workers’ Center hopes to expand its agenda to include state budget and tax issues, focusing on ways to bring greater economic justice to Vermonters. It does so following a legislative session during which the Legislature and the Shumlin administration succeeded in closing a $176 million budget gap while refraining from raising broad-based taxes on the wealthy.
The unwillingness of Gov. Peter Shumlin and the Democratic legislative leadership to spread the sacrifice to the upper income levels produced grumbling among liberals and Progressives in the Legislature who found an unlikely hero in former Gov. Richard Snelling, the staunch Republican who responded to recession in 1991 with a tiered tax package that leaned more heavily on wealthy taxpayers.
Shumlin responded that tax rates today are higher than in Snelling’s day and so there is less room for raising rates on anyone, wealthy or otherwise. Meanwhile, revenue numbers released last week show the crucial role that the state’s richest taxpayers play in the state’s economy.
The latest revenue report contains the good news that as the fiscal year nears its close state revenues are $20 million ahead of previous estimates. Of that total $14 million have come from higher than expected income tax returns.
A report by Vermont Public Radio showed that the decline of income tax revenue between 2007 and 2009 was due largely to declines in income suffered by the richest 3,000 Vermonters — the top 1 percent of taxpayers.
About 70 percent of the $72 million decline — about $50 million — came from those making more than $300,000 a year. Accordingly, the unexpected gains in income tax revenue this year were due to better-than-expected earnings by the wealthiest 3,000 Vermonters.
The push by the Vermont Workers’ Center and its political allies to raise taxes on the wealthy may be undercut by the improvement in state revenues. The need to protect vital human service programs may be less urgent if there is a cushion of unexpected revenue.
At the same time the latest numbers have more clearly delineated the larger issue of economic justice. The fact that 3,000 Vermont taxpayers have amassed so much economic clout is an indicator of the widening chasm of inequality afflicting the state. Jack Hoffman of the Public Assets Institute of Montpelier noted that in the 1970s the top 1 percent of taxpayers earned 6 percent of state income. By 2005 the top 1 percent took in 20 percent of state income.
The galloping inequality that has overtaken the nation in recent decades is an issue so large that many people don’t see it. It affects policy in many ways, particularly since policymakers feel constrained not to inconvenience the very wealthy because of their increased clout.
It will take more than tinkering with a tax rate here and there to redress the nation’s inequality, though more equitable taxation is important. It will also take a persistent, broad-based public education campaign taking place over many years to raise public awareness about the need for a fairer economy. The Vermont Workers’ Center has shown a willingness to take on that job. On particular budget or tax issues, it may or not get its way. But shining a spotlight on the issue of economic justice will do us all a service.