Rich People to the Rescue?

It’s not every day that a group of Vermonters asks to be taxed more. But that’s just what happened last week when 50 of the state’s wealthiest residents wrote Gov. Peter Shumlin a letter to say they’d pony up to help close the state’s $176 million budget gap and keep services intact for the poor, elderly and disabled.

Shumlin has so far followed in the rhetorical footsteps [1] of governors Howard Dean and Jim Douglas, promising to hold off on further taxing the wealthy for fear they might up and move to New Hampshire or Florida. Another trick employed by the affluent is to spend six months a year in another state so they can file their taxes there.

Last week’s well-heeled correspondents put all of those fears to rest.

“People, like us, with good jobs and careers in Vermont, would not leave our homes, friends, careers and the state we love if asked to pay a bit more to help our neighbors,” stated the letter. “In difficult times, we talk about sharing the pain, but it is just not fair to ask the most vulnerable to bear the greatest burden.”

Elizabeth Skarie and her ice-cream-magnate hubby Jerry Greenfield signed the letter and helped organize the lobbying effort. Major Democratic donors Dottie Deans, Melinda Moulton and Phil and Crea Lintilhac, also endorsed the letter, as did key Shumlin donors David Blittersdorf and Jeffrey Hollender.

Both the governor and the legislature rejected the proposal last week. Shumlin stood firm on his pledge to not raise income taxes, and the House voted down a $30 million income-tax hike on wealthy Vermonters 117-23.

Still, the group isn’t going to give up easily. “We’re still hoping to get more people to sign,” Skarie said. A new letter is in the works, too, that will be mailed to all 30 Vermont senators.

Skarie supports a proposal by Sen. Anthony Pollina (P/D/W-Washington) to place a temporary surcharge on Vermonters who stand to save $190 million this year thanks to extended federal tax cuts. That plan would raise about $17 million.

Another proposal, offered by Sen. Tim Ashe (D/P-Chittenden), would raise about $13 million by imposing an alternative minimum income tax. In 2009, 300 Vermonters earning $100,000 or more paid zero income tax. That includes seven millionaires.

The House vote makes it unlikely that lawmakers will squeeze more from high-end earners this year. In 2012? They’re all up for reelection.

As “Fair Game’ noted last week, Shumlin has made it clear he’s not interested in raising taxes on people earning more than $500,000 — the tax bracket to which he personally belongs [2]. Instead, state employees, low-income Vermonters and middle-class taxpayers will be asked to shoulder cuts and pay more for services to balance the budget.

According to Shumlin, approximately 200 tax filers earned more than $500,000 more than once between 2000 and 2009. In 2009, the governor himself reported income just shy of $1 million.

Shumlin suggested he could probably name the 200 filers off the top of his head. No doubt he’ll be asking some of them to finance his reelection next year.

Here’s an idea: Shumlin could use that list of wealthy donors, er, taxpayers, and convene a “Wealthy Vermonters Congress” in Montpelier. Lawmakers could give up their seats, and their $61 per day meals allowance, for the cause.

Vermont’s well-to-do could easily fill the 150-seat House chamber.

Would this select group of taxpayers vote to contribute more to the state’s coffers to help their neighbors? Or would they make budget cuts so they don’t have to move to a low-tax state? I’d wager they’re not as stingy and selfish as Shumlin believes.

Problem is, Shumlin’s “200” figure is bogus at best.

A chart provided to “Fair Game” by the Vermont Department of Taxes indicates 4164 filers reported incomes of $500,000 or more over the past 10 tax years; 653 of those hit it at least twice. About 200 people made it five out of 10 years, and 122 were in that income bracket for the entire decade.

For the 2144 who got lucky only once during that 10-year period — because of a one time inheritance, business sale, lottery win or whatever — here’s a question: Would the prospect of paying more taxes for one year prompt you to leave the state?

In a recent report outlining ways to reform the state’s tax system, the legislative Blue Ribbon Tax Structure Commission determined that, on average, people leaving Vermont earn less money than do those coming in.

Based on that finding, the three-person committee suggested Vermont should “abandon the discussion of what wealthy Vermonters are doing based on their taxes. Such speculation is murky and, even if it were not so, it is questionable and dangerous to design a tax code for fewer than 200 people.”

Not without asking them.

Taxes & Thrones
What’s stopping a Democratic governor and liberal legislature from raising taxes to fix a major budget shortfall?

One possible theory: They’re taking advice from consummate political insider Harlan Sylvester, the personal money manager who has served as a key financial adviser to every governor since Tom Salmon in the early ’70s. Seven Days profiled the elusive, yet seemingly ubiquitous, Sylvester last fall [3].

Despite the fact that Sylvester backed Shumlin’s GOP rival, Lt. Gov. Brian Dubie, in last fall’s election, the gov appointed him chairman of the Governor’s Council of Economic Advisors — a post he’s held since Madeleine Kunin was in office (1985-91).

For decades, Sylvester has fought efforts to raise taxes on Vermont’s wealthy elite — many of whom are his personal-investment clients. The only governor who could, and did, buck him was Richard Snelling. A formidable Chittenden County businessman in his own right, Snelling convinced his wealthy cohorts that a tax hike was the best way to help the state out of a jam in the early 1990s.

Shumlin likened himself to Snelling during the campaign, and there’s no doubt he’s a wealthy businessman. Yet his message to his peers is: “I feel your pain.”

Island Party
Gov. Peter Shumlin is off to another “island” this week … Rhode Island. He’ll be in the Ocean State talking about same-sex marriage with legislative leaders and Gov. Lincoln Chafee.

The invite came from Marriage Equality Rhode Island, hopes Shumlin can convince lawmakers to follow Vermont’s lead.

While in Providence, Shumlin will try to cash in on his marriage-equality leadership at a fundraiser for his own reelection. His campaign website suggested donations of $50, $100 and $500. MERI is hosting the fundraiser at an Italian restaurant known for its “Tuscan soul food.”

Unlike his secretive trip to the isle of Dominica [4], Shumlin will travel to Rhode Island with his state-police security team. And Vermont taxpayers will foot the bill — even though he’s holding a campaign fundraiser.

“It is long-standing practice in Vermont that security expenses for travel with a governor are covered by the state,” said Susan Allen, Shumlin’s spokeswoman, “and this administration will continue that practice.”

Nuclear Disarmament
Last week saw another chapter in the “Bernie and Me” saga [5] between Republican Auditor Tom Salmon and Sen. Bernie Sanders (I-VT).

Salmon proposed that he and Sanders tour Vermont Yankee together.

“Since neither you or I are certified in any area of Nuclear Science, perhaps such a tour could enlighten our perspectives,” wrote Salmon, who added that he has never visited the 39-year-old nuke. “God knows there are many that are pontificating everyday on the pros and cons of nuclear power in America.”

I wonder if Salmon has a particular pontificator in mind?

Team Sanders hasn’t taken Salmon’s bait — yet. Two previous letters from Salmon have gone unanswered [4]. Perhaps the third will be the charm?

So far, the senator has remained silent, Salmon told “Fair Game.”

A sure sign Democrats have abandoned their cockamamy scheme to get Salmon to resign his office while he contemplates a run against Sanders in 2012 [6]: Bumper stickers are circulating that read, “Sanders for Senate, Salmon for Lunch.”

I predict 2012 will be the Year of Bad Fish Jokes in Vermont politics.

Survey Says…
The 42nd annual Doyle Survey results are finally out [7]. The surprise? Of the 15,000 respondents, 45 percent think Vermont Yankee should be relicensed. Forty-one percent want it shut down, and 14 percent aren’t sure.

Those numbers contrast with early Washington County returns that Sen. Bill Doyle (R-Washington) himself released soon after Town Meeting Day: He reported 47 percent wanted VY shut down, 40 percent wanted it relicensed, and 12 percent weren’t sure.

Doyle said he doesn’t think VY would have fared so well had the nuclear accident in Japan occurred before Town Meeting Day.

“I think the results would have been dramatically different,” he noted.

Last year, VY garnered 31 percent support for relicensure, likely because tritium was leaking into groundwater at the time.

Interestingly, VY fared better than its arch-nemesis, Gov. Peter Shumlin: Just 43 percent have “confidence” in the gov, while 30 percent do not. Another 27 percent are undecided.

Of course, VY has been in Vermont for almost 40 years. Shumlin has been governor for a mere three months.