Tax Reform & Climate Action: The Vermont Case for Carbon Pricing

Montpelier, VT – Vermont legislators today proposed four tax reforms that would:

• Create jobs and strengthen the Vermont economy,
• Prioritize low- and middle-income Vermonters, and
• Reduce the carbon pollution causing global warming.

“Our bills are conversation starters,” said Representative Johannah Leddy Donovan, a member of the tax-writing Ways & Means Committee and Chair of the Working Vermonters Legislative Caucus. “Because President Trump’s budget will wreak havoc on Vermont, we need to have a conversation about aligning our tax code with Vermonters’ needs and priorities.”

Each of the bills proposes a different revenue neutral tax reform paired with gradually rising fee on carbon pollution paid by the companies that distribute fossil fuels. The four proposals, the lead sponsors, and the key elements of each bill are:

PROPERTY TAX RELIEF (Rep. Martin LaLonde): Lowers the statewide property tax, while diversifying and stabilizing Vermont’s education financing system.

ELIMINATE THE SALES TAX (Rep. Sarah Copeland-Hanzas): Phases out Vermont’s regressive sales tax, making border businesses and Vermont brick-and-mortar stores more competitive with neighboring states and on-line retailers that don’t collect or remit Vermont’s sales tax.

INCOME TAX REFORM (Rep. Johanna Leddy Donovan): Cuts income taxes for every Vermonter and Vermont business and doubles the Earned Income Tax Credit – one of Vermont’s most powerful anti-poverty initiatives that assists over 40,000 low-income families each year.

CARBON DIVIDENDS (Rep. Diana Gonzalez): Provides a quarterly dividend check to every Vermonter and Vermont business to help speed the transition to the clean energy future.

Carbon pollution pricing is used around the world to address climate change and strengthen local economies. Republican Governor Jim Douglas implemented Vermont’s first price on carbon pollution in its electricity sector through the Regional Greenhouse Gas Initiative — and it is working. According to the Acadia Center, RGGI states have reduced emissions by 16% more than other states and seen 3.6% more economic growth since RGGI launched, while Vermont has the second lowest electric rates and the fastest GDP growth rate in New England.  Today’s bills would expand that successful model to Vermont’s transportation and heating sectors.

“Climate change is real, and it’s scary, but there’s hope if we work together to solve it,” said Representative Diana Gonzalez, a Progressive Party legislator from Winooski. “The bills we introduced today are not bound by party labels. They could work singly or together, but they all move Vermont towards a more prosperous clean energy future.”

As an example of non-partisanship, Rep. Gonzalez’s fee-and-dividend bill is modeled off of “The Conservative Case for Carbon Dividends” proposed by James Baker, George Shultz and Henry Paulson – all Republican cabinet secretaries from the Reagan and Bush administrations.

“Climate action is good for Vermont’s economy,” said Rep. Sarah Copeland-Hanzas, lead sponsor of a bill to eliminate the sales tax.  “President Trump wants more coal, but we don’t have any coal jobs in Vermont.  What we do have is over 17,000 Vermonters working in clean energy.  And cleaner, high-tech heating and transportation can mean more money in Vermonters’ pockets.”

Even at today’s low oil prices it is less expensive to heat a home with a high-efficiency electric heat pump than with most fuel oil boilers and it costs about 30% less to drive an electric car in Vermont than a similar vehicle that runs on gasoline.

“The Trump budget crisis is forcing a new look at Vermont’s outdated tax code.” said Rep. Martin LaLonde.  “This is an opportunity to re-evaluate what we tax and why. By aligning our revenues with our priorities, we can cut taxes, protect the most vulnerable Vermonters, and do our part in the fight against climate change.”

All of the legislators who introduced bills today intend to work with Vermonters, Vermont businesses, and their colleagues in the State House to enact tax reform and climate action.

For further comment from the bills’ sponsors, contact:

Rep. Sarah Copeland-Hanzas
scopelandhanzas@leg.state.vt.us
(802) 222-3536

Rep. Johannah Leddy Donovan
jdonovan@leg.state.vt.us
(802) 846-7245

Rep. Diana Gonzalez
dgonzalez@leg.state.vt.us

Rep. Martin LaLonde
mlalonde@leg.state.vt.us
(802) 863-3086

Tax Reform & Climate Action: The Vermont Case for Carbon Pricing posted first on Green Energy Times