Vermont’s socialist Sen. Bernie Sanders has been pushing the national Democratic party to extremes. But his own constituents don’t seem to want to come along for the ride leftward. As Mr. Sanders rolls out a plan to increase death taxes (among many other tax hikes he’s proposing), a burgeoning movement in the Green Mountain State has been pursuing tax reform to stem the tide of fleeing Vermonters.
Mr. Sanders remains highly popular in Vermont and won another landslide re-election last year. But his policies are a tougher sell even in this bastion of granola leftism. Last year a Journal editorial reviewed the experience of Vermont in pursuing the signature health care idea of its most famous socialist:
Maybe Democrats should have looked at the results in Vermont when Bernie’s home state tried to set up single payer. A Democratic Governor abandoned the idea in 2014 once he was looking at an 11.5% payroll tax, plus a 9.5% income tax, and more increases to come. Progressives couldn’t even get single payer up and running for about 625,000 people in a state with a decent health profile.
Now Mr. Sanders is flogging a plan to extend federal death taxes to cover many more people and at rates as high as 77%, up from the current top rate of 40%.
But at the state level Vermonters are considering more death tax cuts. Last month Republican Gov. Phil Scott said in his annual budget address:
Tax professionals consistently tell me that because we are so far out of line with other states, the estate tax is a factor in retirees leaving.
In 2016 while Mr. Sanders was off campaigning against financial success, Vermont’s state lawmakers were limiting the bite of the state’s punitive 16% death tax by exempting the first $2.75 million. Now Mr. Scott wants to move the exemption up to $5.75 million. He understands that people who have worked and saved all their lives are free to retire in any state they choose. “Vermonters impacted by this tax are well-advised from tax professionals, and they are highly mobile,” says Mr. Scott.
This week Rob Roper of the Ethan Allen Institute makes the case for a complete repeal of the state’s death tax:
There would likely be quite a few candidates from just the Boston, New York, Newport, Greenwich areas who would jump at the chance to escape their local tax man and take in Vermont foliage season at the same time. These are people who will then build and renovate houses (construction jobs), eat in restaurants, shop in local stores, donate to and volunteer in local philanthropic entities, such as EMT services. They would be paying Vermont income taxes, sales taxes, rooms and meals taxes. How gratifying would it be to see New York Governor Andrew Cuomo complaining that Vermont, not Florida, was stealing his taxpayers. We don’t need all of them. We’re small. We just need a few.
Vermont’s problem isn’t just old people leaving. Regardless of age, Americans don’t want to move into a jurisdiction with one of the country’s ten worst business tax climates, as rated by the Tax Foundation. This month Gov. Scott explained what he calls a demographic crisis:
…from April 2009 to the time I took office, we had, on average, six fewer workers in our workforce every single day… from the start of 1997 to the time I took office, we had, on average, three fewer students enrolled in our K-12 schools every single day.
In December, University of Vermont economist Art Woolf shared more cheery news in the Burlington Free Press:
The number of Vermont women in their prime childbearing years has been falling which means the number of births will continue to fall. Couple that with one of the nation’s lowest fertility rates and it is almost guaranteed that deaths will outnumber births every year for the foreseeable future… since 2010, 10,000 more people have left Vermont than have moved in from other states.
To sum up, enacting just a portion of the Sanders agenda has been a crushing failure for Vermont.
Meanwhile in Washington this week there’s a helpful reminder that while Mr. Sanders rants about the “billionaire class” and giant multinational corporations, his opponents include many smaller businesses, too. A broad coalition representing companies and farms of various sizes is urging repeal of the federal death tax on the grounds that it reduces capital formation and triggers huge compliance costs while raising little in federal revenue. The letter from the Family Business Coalition to repeal champions Sen. John Thune (R., S.D.) and Rep. Jason Smith (R., Mo.) notes that even prominent liberal economists have published work on the tax’s “stifling effect” on jobs and growth.
Call Vermonters crazy for re-electing Bernie Sanders. But they appear sane enough to realize they can’t afford his ideas.
In Other News
Fake Crime Wave
Two weeks before the Jussie Smollett case was revealed to be a hoax, The College Fix pretty much called it out as such. How did we know? Because we’ve seen it before. A lot.
For the past seven years, we’ve chronicled dozens of similar examples nationwide on college campuses or perpetrated by students. In sum, more than 50 and counting.
— The College Fix, February 18
Questions Nobody Is Asking
“What’s next for Karl Lagerfeld’s famous cat Choupette?,” Good Morning America, Feb. 20
Out on a Limb
“Whether Britain’s economy would fall into recession is unknowable, but it cannot be ruled out,” The Economist on Twitter, Feb. 20
Movie of the Year?
“Set aside your devices and diversions for two hours, and you’ll see something wonderful,” National Review, Feb. 21
To suggest items, please email firstname.lastname@example.org.
(Teresa Vozzo helps compile Best of the Web. Thanks to John Trickett.)
Mr. Freeman is the co-author of “Borrowed Time,” now available from HarperBusiness.