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October 03, 2012

The Fact Checker: Does Vermont Have the Highest Tax Rate in the Country?

Factchecker-bullWith the 2012 campaign season in full swing, Seven Days has teamed up with to create a fact-checker feature to test the "truthiness" of claims made by the candidates who want your vote this November. This week's Fact Checker was written by VTDigger's Anne Galloway.

CLAIM: “Pete Shumlin’s Vermont: highest tax rate in the country.” 
Television commercial for Republican gubernatorial candidate Randy Brock, titled “Who’s He Fooling?”

FACTS: The Vermont GOP has long contended that Democrats have made the Green Mountain State into a high-tax, antibusiness enclave. So it wasn’t surprising when Republican gubernatorial candidate Randy Brock claimed, in an attack ad against Gov. Peter Shumlin, that Vermont has the highest tax rate in the country. 

According to Brock campaign aide Darcie Johnston, Brock based his assertion on a 2012 Kiplinger analysis of the five most tax-unfriendly states for retirees, using figures from the Tax Foundation, a Washington, D.C., think tank. Though several other sources supplied by Johnston tar Vermont as “retiree hell,” only one actually lists the state as having the highest tax rate in the nation — a 2009 Forbes report. That was published, of course, when Republican Jim Douglas was governor — well before Shumlin took office in January 2011.

According to Kiplinger and the Tax Foundation, in 2012 the highest-taxed state is Hawaii. Oregon is next in line, followed by California, Iowa and New Jersey. Vermont is No. 6, based on the criteria established by Kiplinger.

Vermont’s tax rate for high-income earners is 8.95 percent, but those individuals pay on a graduated scale. Vermonters are charged 3.55 percent for the first $34,500 of taxable income regardless of how much they earn. The top rate is applied to taxable income starting at $379,150 and above. In 30 other states, taxpayers pay the top rate on all adjusted gross income. 

Another local benefit: Well-heeled Vermonters can itemize all the deductions they want — mortgages on first, second and third homes, college tuition, charitable donations, etc. — before they pay a dime to Montpelier.

If you look at Vermont’s actual income-tax collections for individuals, the state’s tax burden is closer to average. The Tax Foundation ranks Vermont as 20th highest, or $782 per person, based on 2010 tax data. In case you’re wondering, Vermont’s property taxes rank sixth nationally, according to the Tax Foundation.

SCORE: Sen. Randy Brock’s claim that Vermont has the highest tax rate in the country during Shumlin’s first term is not true. Vermont has the sixth-highest income-tax rates in the nation, according to his own sources. Moreover, the Tax Foundation’s more nuanced look at Vermonters’ actual tax burden ranks Vermont 20th. Brock’s assertion is wrong, based on his own data for 2012. For that reason, we rate his claim “Udder Bull.”

Got a claim you want fact-checked? Email [email protected] to reach Anne Galloway ( and Andy Bromage (Seven Days).

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