Democrats blow last minute smoke screen with desperate, misleading radio campaign

By Rob Roper

The Vermont Democratic House Campaign and the Vermont House Solidarity PAC are running a series of radio ads in a last minute attempt to deny evidence that Vermont Democrats have plans to expand Vermont’s sales tax to include services. The ads call the proposal “hogwash,” “misleading,” and insist instead that Vermont Democrats have “held the line on broad based taxes.”

But, here are the facts regarding the Democrats’ plans to expand the sales tax to services…

In January 2011, the two Democrat-appointed members of the Blue Ribbon Tax Commission (the majority) formally recommended that the legislature expand the state sales tax to include services. The Republican-appointed member filed a minority report rejecting the idea.

In May of 2012, Shap Smith, the Speaker of the House, came out strongly in favor of the expanding the sales tax to services, and even said he wanted to make it a campaign issue. Governor Shumlin, in the first gubernatorial debate, confirmed that an expanded sales tax to services was one of the options on the table for paying for single payer healthcare, which will require between $2 and $3 billion in new taxes to pay for.

In the legislature, the Democrat controlled Ways & Means Committee put forward a bill in regard to the expanded sales tax (H.243), and though it did not pass out of the committee, a separate summer study committee was formed to explore the expanded sales tax further. That committee is set to release its final report to the legislature in January 2013. Question for voters: Who do you want representing you when that report hits your representative’s desk?

In one of the Democrat PAC’s radio ads, Speaker Smith calls the accusation regarding the sales tax “misleading,” but it is he who is not being honest. Smith is quoted in an October 31 Burlington Free Press story as saying he was for the Sales Tax Expansion to services in May, but “by mid-summer he took it off the table.” There’s no public record (at least none that I can find, and I’ve been looking) of any such statement by the Speaker indicating change in his policy or thinking.

However, in an Oct 1 interview this fall (fall coming after mid-summer) with the Vermont Press Bureau, Smith only went so far as to say he would not likely bring up expanding the sales tax to services in 2013. “I think there are going to be lot of different issues the Legislature is going to be facing next year, and I wouldn’t put this in top five,” said Smith. This isn’t much comfort considering the legislature passed 171 bills into law in 2011-2012. Just as importantly, Smith said nothing about bringing the issue up in 2014 (current candidates are running for two year terms), or 2015, when the legislature is supposed to vote on a final plan for funding single payer healthcare.

As for Democrats holding the line on “broad based” taxes, well, that kind of depends on your definition of “broad based.” Vermont Democrats voted twice in 2011-2012 to raise property taxes, which most people would consider a broad based tax. The votes involved H.441, in which Democrats voted to the general fund transfer to the education fund by $27.5 million, causing the difference to be made up with increased property tax rates at the local level (3/25/11). The second vote was on H.754, in which Democrats supported a 2 cent per $100 education property tax increase (2/9/2012).

Democrats also raised $17 million in taxes on hospitals, nursing homes and home health agencies (H.436). If, as they argue, everybody accesses the healthcare system at some point, it’s hard to imagine a more broad-based tax than this. And, given that a broad section of the Vermont population drives, it’s worth noting that this legislature took over $6 million more out of Vermonters’ pockets in increased taxes (they like to call them “fees”) on licenses, registration, etc.

Here’s the 800 pound fact of the matter in the room: Vermont Democrats passed a law dictating that Vermonters will adopt a single payer healthcare system. Now that the deed is done, we will have to pay for that law, and it is very expensive – we’re looking at roughly $3 billion in new taxes right off the bat. These same Democrats don’t want to talk about that, and even voted to keep discussion of how we’re to pay for this secret until after the election.

But, our choices for meeting this obligation are few. They are, multiplying our income taxes by as much as a factor of five, expanding the 6 percent state sales tax to all services, enacting a 14% payroll tax, or some unpleasant combination of the three. That’s plan A. Plan B, On the other hand, is to avoid this tab entirely by scrapping this single payer debacle by, necessarily, scrapping the people who gave it to us. The only way to do that is with our votes on Tuesday, November 6th.