by Paul Dame
As my town of Essex, and many others throughout the state, celebrate the 250th anniversary of our town charter, I think back to those original inhabitants of “the New Hampshire Land Grants” who joined the Green Mountain Boys and defended our beloved state from the claims of New York. Although we succeeded in distinguishing ourselves, I fear that in some ways New York’s influence has crept in again.
It seems like every few weeks another study comes to my attention (recently from Taxfoundation.org) that shows the states with the worst tax climate, or that are the least business friendly, and oddly Vermont ends up close to New York (on the wrong end of that spectrum), while New Hampshire (the state our roots tie us closer to) is on the opposite end.
New York, unlike Vermont, actually can afford to be terrible for business. New York’s restrictions are so burdensome that every life insurance company in the country that my firm works with has to set up an entirely separate company JUST to service New York clients, while their main company serves all of the other 49 states. The reason that so many businesses are willing to put up with New York is actually quite simple; a huge market with thousands of millionaires (368,388 according to netstate.com, Vermont, by contrast has only 11,769) Which makes perfect sense, because New York has a Wall St. – while Vermont does not.
Also when you have a very high population density, you can afford to have high property taxes, since you are spreading that burden out among more people per acre. When you have a growing population of consumers with disposable incomes, businesses will be willing to overlook some of the costs and burdens of locating here because they see opportunity in that market. But Vermont is one of the LEAST densely populated states in the country, with older and poorer demographics next door. Our population looks nothing like New York, and yet we try to govern as if we are our western neighbor. Our population does not provide the same incentive to businesses to locate here, so we need to compensate.
If our state wants to continue providing the services it does, by collecting the tax revenues it does, we need to stop putting the tax cart before the business horse. If we continue to have a large tax burden in our cart, with a Shetland pony to pull it, we’re not going anywhere. Nowhere is this more clear than in my town of Essex Junction, where years ago when IBM was nearly double its size, they paid a considerably higher amount in taxes. Our municipal government has not shrunk, and so that tax burden now falls more heavily on the residents, who are still sparsely populated (by NY standards).
The great thing about Vermont, and the thing that gives me hope for the future of my beloved state is that all of our best qualities (our people and scenic mountain vistas) can not easily be changed. But all of the things that are holding us back (our tax policy our regulatory process) can be changed by a legislature and executive branch who decide to focus on those things, rather than their own personal pet projects.
A new tax on sugary beverages, higher property taxes, gasoline taxes, gun control, physician assisted suicide are not the things that will help to make Vermont a growing place of prosperity or attract businesses to provide jobs to our young people and broaden our tax base. They are mostly personal preferences that tend to divide us. But I guess compared to Mayor Bloomberg’s personal preferences that restrict salt content, soda size and earbuds, I should be thankful we’re not NYC…yet.
The Vermont State motto is “Freedom and Unity.” And I think deep down in our historical psyche that motto is still appropriate, because we are best able to stay united when my neighbor and I don’t tell each other how to live and eat. We are a people who like to live and let live – and that is one of the most unifying orientations we can have. Our original colonies, and even the Green Mountain Boys were united around that simple and wonderful idea of Freedom, that generations since them have died to protect. But we are becoming more like our neighbor, Nanny York. Putting in place regulations and taxes that restrict not only our individual freedoms, but also our economic activity, which can reduce or outright prevent growth in our State. And I have to wonder, if Ethan Allen were with us today, would he be proud of what has become of this state he was willing to give his life to establish – or would he feel like Vermont ended up becoming part of New York despite his efforts to the contrary?
Paul Dame was a candidate from Essex in 2012 for the Vermont State House.