By Guy Page
Vermont corporate income tax (CIT) receipts through September, 2018 jumped a whopping 80 percent over the first nine months of 2017. Grateful lawmakers can thank the main architect of the 2017 federal tax cuts: President Donald Trump.
Mindful that tax cuts could raise the deficit, Trump insisted on a deficit-reducing policy called “repatriation:” U.S. companies with overseas subsidiaries must “repatriate” (return to the U.S.) taxable income stashed away in tax-advantaged countries. And the money has indeed come rushing home: $300 billion was repatriated to the United States in the first quarter of 2018 alone, the U.S. Federal Reserve Board says.
What does repatriation mean for Vermont state revenue? Vermont companies paying federal CIT on repatriation also pay more Vermont CIT: $15.5 million more through the first three quarters of 2018, according to a Vermont Joint Fiscal Office (JFO) report. The state windfall won’t last past 2018 – it’s a one-year thing. Also, it’s exact dollar amount is yet unknown. Still, repatriation-related revenue is the main driver of the spectacular CIT increase, a JFO economist said Tuesday, Oct. 16. Sen. Carolyn Branagan (R-Franklin County) said likewise in a recent Facebook post. She even offered grudging praise for the nation’s controversial chief executive: “Yes, ok….. I’ll admit that this is one of the things our president has done that I like.”
Repatriation isn’t the only local benefit from the 2017 federal tax cuts. As reported September 6 in Vermont State House Headliners, 18 large Vermont employers gave employees bonuses, raises and new benefits as a direct result of the tax cuts, John Kartch of Americans for Tax Reform reports. Both Vermont Gas and Green Mountain Power rebated 100 percent of their federal corporate income tax savings to ratepayers and customers, resulting in substantially lower energy prices.
It’s fair to ask, why haven’t Vermont elected officials (other than Sen. Branagan) publicly praised the positive benefits of the 2017 federal tax cuts?
According to a poll cited by Seven Days, just 30 percent of Vermonters support President Trump. Sen. Branagan is not running for re-election. Perhaps incumbents seeking re-election are nervous about speaking well of Trump. An exception is Republican candidate for U.S. Congress Anya Tynio. She told Vermont Public Radio, “I think that President Trump has fulfilled his promise to the American people.”
Rep. Janssen Wilhoit (R-St. Johnsbury), candidate for attorney general, conversed with the president in Washington D.C. Tuesday, Oct. 16 and offered this encouraging Facebook post: “Two things to share from today. First, our president is willing to listen despite disparate views. I was able to discuss with him this morning efforts in REAL criminal justice reform. Second, your Republican representatives and Governor are engaged and committed to working with this administration to better Vermont.”
Given the news (9/26 Headliners) that Vermont immigratiion policy is costing us up to $2.8 million in drug crime-fighting federal money (at least for now),that’s good to hear!
Statehouse Headliners is intended primarily to educate, not advocate. It is e-mailed to an ever-growing list of interested Vermonters, public officials and media. Guy Page is affiliated with the Vermont Energy Partnership; the Vermont Alliance for Ethical Healthcare; and Physicians, Families and Friends for a Better Vermont.