Some societies think that it is wise to spend on some things such as education (see https://www.washingtonpost.com/news/local/wp/2015/06/02/the-...). Others think that lowering taxes at whatever cost is better. The former fits with my thinking, which is why I like it here.
https://blog.prepscholar.com/average-sat-and-act-scores-by-s...
What does Vermont have to show for its higher spending? Why do you see higher spending as an automatically good thing if it doesn't have any evidence of having a beneficial effect?
Not paying taxes is cool but the annual discussion of "Which completely normal public service will we forgo or curtail this year?" isn't so awesome.
The table you link to shows Vermont coming in #12 in SAT scores, and I'll accept that for it is. Other sites (e.g. US News and World Report) typically ranks us in the top ten for our educational system. It is not unheard of for us to be ranked #1:
https://www.alec.org/press-release/state-education-ranking-s...
My point is, I do not understand how you can be so fixated on NH finishing six places ahead of VT and not actually asking the bigger question of "How do two small rural states even begin to compete?" Let alone trying to decipher why New England consistently does so well overall with Massachusetts and Connecticut ranked #1 and #2.
Vermont is a high tax state, fine. I more than get my money's worth. As someone that goes to Town Meeting Day and looks through the budget every year I know that I head home secure that my dollars are being well spent. Meeting my kid's teachers at school I know they are getting a very solid education and heading off to university next year.
Both are highly ranked for k-12. The difference in scores you are touting is 8 points.
It's a little more nuanced than that, and not necessarily an either/or as you have described it. More than likely in my experience, the people who think lowering taxes is good think so because they view the government as an inefficient, third-party spender and believe the money could be better spent more wisely elsewhere. While Vermont does rank high in K-12 (4th), it is ranked 36th in higher education. Vermont is also the 2nd least populated state in the country, so it remains to be seen how scale will impact the education system there.
People say that, but then they privatize functions of government, and if they're lucky, they end up with the same level of service. And then now there's a middleman involved who needs to get profit, meaning wages and service get cut.
You Don't Always Get What You Pay For The Economics of Privatization by Elliott D. Sclar
http://www.cornellpress.cornell.edu/book/?GCOI=8014010029039...
The government is made up of people. In my experience, it isn't the funding amount that correlates with inefficiencies, it's the distance from accountability that does.
So one can reduce the taxes all one likes, a 30% wasteful department is still going to waste 30%. I'd rather target the inefficiencies themselves.
89% of all education budget increases went straight to pension funding, with only 11% to the classroom. They already spend far more than other midwest states, with outcomes that lag behind Montana, Minnesota, and other frugal states.
So while I agree that education spending is critical to our future, money alone is not the magic wand.
[1] https://www.illinoispolicy.org/reports/pensions-vs-schools/
And income is one thing. Should those taxes add value, the actual difference in effective buying power, or ability to save may be marginal.
Source: Vermont resident with a local IT career
Normally someone may work remotely in a more rural place for cheap housing, but some of the housing in Vermont isn't that cheap.
Burlington has some of the same housing issues that other cities in the county have. I would imagine the vast majority of people who would consider doing this plan would want to live near Burlington. Well, that means Burlington would need to address housing supply and affordability too.
What’s life like in Vermont?
As for rent, a nice 3BR goes for around 2-3k/mo in Burlington and gets substantially cheaper the farther south you look. It's not the cheapest nor most expensive state to live in, but the price:quality of life ratio is excellent.
But let me tell you about Montpelier, the smallest state capitol in the country and the only one without a McDonald's. I think it is the best small community in the world, however this is coming from someone who has not lived many places. Near Montpelier things are a little cheaper (depending on how near) and if you go out 15 minutes drive or more prices begin dropping drastically. Montpelier has at least one of everything you need: Mexican place, one sushi restaurant, one pharmacy, one grocery store, one co-op, etc. It does not have much for shopping, which is true of all of central Vermont but there is a Walmart in neighboring Berlin.
If you want somewhere close to cool community events but super-cheap look into Barre, which is Montpelier's sister community--but it's that sister who has had a bit of a 'failure to launch' and everyone suspects is doing drugs. Houses are dirt cheap in Barre and it is 15-minutes drive to cool things in Montpelier. And while there are more 'bad elements' in Barre, it also has a ton of really cool people not on drugs, raising families and I believe things are starting to happen there.
Both Montpelier and Burlington are great for liberal-minded, community-oriented persons, Montpelier being a bit more into it. Burlington seems to be mostly made up of out-of-staters and can seem quiet transient as they come and go, where more people seem to stick around longer in Montpelier. If you are like this and live in Barre you will have to seek out your kind, but there are plenty there.
Vermont is great if you love the idea of hiking, snowshoeing, cross country skiing, of owning a few acres with your own woods on them. Vermonters, especially rural Vermonters, pride themselves on minding their own business and letting everyone do whatever they want as long as they aren't bothering anyone else too much. Also we just legalized growing a few pot plants at home for your own recreational use, if you're into that.
There are more reasons other than taxation to consider moving. When I moved countries, I didn't even consider taxation when I moved. I make enough money that I'm comfortable, a couple of grand here and there isn't going to upset me. When I moved, it was for lifestyle reasons, which I think is the only sensible reason to move. If you're moving to Vermont to work remotely as an attempt at saving/earning more money, you're going to have a miserable time.
$0 - $37,650 3.55% $37,650 - $91,150 6.80% $91,150 - $190,150 7.80% $190,150 - $413,350 8.80% $413,350+ 8.95%
The point isn't to get everyone to move, but to motivate some people who otherwise like what Vermont has to offer but are on the edge. If you are more on the European democratic socialist end of the spectrum of preferences and you plan to live in the US, Vermont will probably suit you. If you're on the right-to-workers end, you'd probably prefer someplace else.
I've lived in other places as well, always moving for school, employment, or, when I was younger, someone else's school or employment. I found that I could telecommute, though, and so we moved to a place we wanted to be for its own sake.
The things I like about Vermont: the climate, the culture, the natural and built environment. And frankly I like living in a place where I don't have to apologize for the cruel, exploitative history or the short-sighted or selfish political decisions of the populace. It's beautiful. There's a lot of art. My kids' school has great teachers, great facilities, and a lot of options. I have family who moved to the area, so that helps. The food is good. I walk into town to work. I can walk out my back door with my kids and hike to the top of a hill and have a beautiful view. I can take the bus home in the evening if the weather is bad. (I don't telecommute anymore, though I can work from home when I please.) We were living in a basement in DC. Now we have a house beside a brook.
I do wonder why they only mentioned the tax rates for people making ~400k a year.
Under some circumstances it may still make sense to take the up-to-$10k deduction, because it may be combined with other deductions which will add up to more than the standard deduction, but for someone paying much less than $10k in state taxes it is probably more advantageous to simply take the standard deduction, and for someone paying much more than $10k the deduction may only represent a small portion of their state taxes.
Not necessarily. Illinois spends roughly half its budget on pensions. In New York, where I don't need a car and can offload much of what I'd hire a lawyer for onto regulators, I get a decent bang for my buck. (Though we still have horrendous waste.)
The more cynical view is that this was done on purpose to harm blue states that tend to have higher state income taxes
this could very well be true, but it does seem unfair in the first place to be able to deduct state income tax. it's great that some states have decided to increase their income taxes to offer more services to their citizens, but why should tax payers in other states have to subsidize them without receiving any benefit?
The argument for the deduction, which has always existed, is to prevent people from being double taxed. A higher-tax state may tax its citizens to pay for infrastructure or services, whereas a low-tax state relies on the federal government to pay for the same stuff. There are tons of people in poverty in a lot of southern lower-tax states. Who do you think pays for all of the government services these people need?
The tax plan was specifically designed to harm blue states and to make residents of blue states pay and even higher, even less balanced share of tax receipts in the country.
Triple is a little hyperbolic, as you could probably best describe it with a number between 2 and 3 depending on the tax rate.
I'm not sure how I feel about the concept, but one rationalization is that if a basic need, like road funding, is suitably taken care of at the state level by high state income taxes, then the state needs less federal funding. It's sort of a usage qualifier I guess.
still, this is a valid point. the net flow of cash is certainly an important thing to consider, but i do think it is worth making the distinction between federal and state taxes. i happen to live in a (very blue) state that receives more federal dollars than we pay in taxes. if i lived in a creditor state, i would certainly not be thrilled with the situation, but i would accept that the tax is raised (at least ostensibly) for the national interest and may not be spent evenly among the states. state taxes, on the other hand, are raised exclusively for the benefit of that state. we can argue about how to allocate federal dollars most fairly, but i really feel that state taxes should not be directly subsidized by citizens of other states.
[0] https://www.theatlantic.com/business/archive/2014/05/which-s...
Otherwise, they're competing with employer-provided health insurance, which is already tax-exempt. That gives employer-provided insurance a huge artificial advantage and makes single-payer a lot more expensive in comparison.
Edit: others pointed out that this deduction is now capped, which I didn’t realize.
I spent a few weeks recently bumming around the state.
1) Contrary to what Vermonters may think, real estate in Vermont is expensive. Not NYC or SF expensive but none the less very expensive unless it is in a totally need to be burned and rebuilt state.
2) Property taxes are ridiculous. Every time I look at a property I compare its property taxes to property taxes of comparable properties in other areas. Vermont loses to New York! It also loses to New Hampshire. Let this sink in - NH makes most of its revenue from property taxes and property taxes there are still smaller.
3) I put about 800 miles on my car in Vermont. One of the things I really pay attention to is overhead cables. Guess what? Outside what Vermont considers "major cities" cable break out and fiber break out boxes are nearly non-existent. Sat dishes everywhere sort of confirm the point. Internet connections in both random AirBNBs and regular BnBs sucked. Not the Amtrak level bad but close ( after I was done with Vermont I went to New Hampshire. Cable fiber boxes where everywhere and every place I was in had a very decent internet connectivity )
4) Going out costs major $$. New York/Philadelphia level $$. For definitely not New York/Philadelphia level of variety or convenience.
To be fair, there's areas in NY with their own city or county property taxes on top of it. Westchester has, last I looked, the highest property taxes in the country.
How are you defining "smaller"? NH is #2 and VT #9 at http://www.tax-rates.org/taxtables/property-tax-by-state
http://money.cnn.com/gallery/smallbusiness/2012/10/15/state-...
>>The income tax has a top rate of 8.95%. This ranks as the sixth-highest in the U.S., although it only applies to taxpayers making over $413,350 per year. Meanwhile, total state and local sales taxes range from 6% to 7%.
>>There are five income brackets. The highest marginal rate is 8.95% on any income over $388,350. That's on top of federal income taxes.
>>Businesses pay an effective property tax rate of 5.27%, the third highest in the country.
>>At 6%, sales taxes are also on the high side. Meanwhile, those businesses that pay corporate taxes get hit with an 8.5% rate for any profit made above $25,000.