Governor Peter Shumlin and the Senate Finance committee are on a collision course concerning a new tax package.
The Governor didn鈥檛 like the tax package that was passed by the House last month and he doesn鈥檛 think m
uch of the proposal being crafted by the Senate Finance committee.
The committee鈥檚 draft plan caps mortgage interest deductions on the income tax, it creates a new minimum income tax rate and it imposes the sales tax on bottled water.
The Governor made it clear that he opposes the committee鈥檚 approach.
鈥淵ou know where I stand but I鈥檒l just say it once more just in case there鈥檚 any confusion,鈥� said Shumlin. 鈥淭his is not the time to raise income taxes, sales taxes, meals taxes on hard working Vermonters. It鈥檚 just not the time.鈥�
Chittenden senator Tim Ashe is the chairman of the Senate Finance committee. He says capping mortgage interest deductions will affect a relatively small number of people, and will help keep taxes lower for everyone else.
鈥淪o some people will say it鈥檚 semantics the Legislature can鈥檛 find a tax that it doesn鈥檛 want to increase,鈥� said Ashe. 鈥淏ut the reality is when you reduce a benefit that鈥檚 accruing for purposes that it was never intended you鈥檙e actually relieving taxes on everybody else who鈥檚 paying for it right now.鈥�
The Senate package also includes a minimum 3 percent tax rate for all people who earn more than $125,000. Ashe says the plan is a matter of tax fairness.
鈥淥ne of the dilemmas that we鈥檙e facing is that there are other very wealthy Vermonters who pay an extremely low percentage of their income towards taxes, in fact, lower effective rates than many middle class or even lower income people.鈥�
The Governor says he鈥檚 fighting these tax increases because he鈥檚 convinced they will undermine the state鈥檚 fragile economic recovery.
鈥淲e鈥檙e seeing the third lowest unemployment rate in America,鈥� said Shumlin. 鈥淎nd if you really want to stall our economic recovery, raise every single broad based tax in Vermont and I鈥檒l guarantee you鈥檒l help slow it down.鈥�
If the Senate Finance committee takes a formal vote on the plan this week, it could be up for debate on the Senate floor by the middle of next week.
