What democratic leaders are saying (and not saying) about expanding the state sales tax to services

by Rob Roper

Vermonters First, the new SuperPAC on the scene in the Green Mountain State, launched a television ad on October 1 (see it HERE) calling out Democratic leaders for their support of expanding the state sales tax to include services. The claim is based on comments made by Speaker of the House, Shap Smith (D-Morristown), at the end of the 2012 legislative session. Vermont Digger reported from Smith’s press conference (emphasis added below),

The surprise of the presser? An open declaration that not only would Smith pursue sales tax reforms that would include cloud computing, but also that he would use it as a campaign issue. Smith said he wants to lower the sales tax to a nominal amount, from 6 percent to a much lower amount suggested by the Blue Ribbon Tax Structure Commission (between 1 percent and 2 percent) and expand the assessment to services.

Today, on the heals of the Vermonters First ad, Smith is singing a slightly different tune – and the left-leaning Vermont press corps is bending over backwards to help Smith and other Democrats off the hook. However, a careful look at what these slick politicians are actually saying should leave Vermonters with little comfort.

Here’s what Smith told Seven Days on Monday, “’I don’t really think [the sales tax expansion to services is] ready for prime time,’ Smith says of the idea he himself floated. ‘Philosophically, and probably from a policy perspective, it makes sense, but if you can’t get a consensus around it, or at least start to generate a consensus, I don’t think it’s smart moving on it.’” Seven Days reporter, Paul Heinz, says (and I’m paraphrasing here), well, okay then! Nothing to see here. But, look at what Smith really said…

He still likes the idea: “It makes sense.” It’s not ready for prime time and there’s no consensus? Some interesting follow up questions Heinz might have considered: Are you going to try to build consensus for a sales tax expansion within your supermajority caucus, and get this thing ready for prime time? And, if you’re successful (like you were in overriding Governor Douglas’ vetos of the 2009 budget and same sex marriage), will you pass the sales tax expansion? Alas, the questions were never asked, likely because Heinz, formerly a political flack for Peter Welch, knew what the honest answer would be.

Heinz also put the prospect of a sales tax expansion to Governor Peter Shumlin. Shumlin’s answer:

I have been a longtime opponent of the sales tax. I have watched the sales tax drive jobs and economic opportunities into New Hampshire along the eastern side of the state, and it’s had a devastating impact on jobs and job growth,” said [Shumlin]. “I have never been enthusiastic about expanding or raising the sales tax. I have always been against it.”

Okay, Shumlin doesn’t like it. But that doesn’t mean he wouldn’t sign it into law. He didn’t say he’d veto it, and Shumlin was pretty careful to describe his passionate dislike of the sales tax  only in the past tense. A “long time opponent,” “I have never been enthusiastic,” “I have always been against it.” But, will he always be against it? Would he be willing to sign it, albeit unenthusiastically? Will his long time opposition be a permanent opposition?

The real question for Shumlin is, “Would you, governor, categorically oppose an expansion of the sales tax to fund your single payer healthcare program?” Bob Kinzel of VPR asked a related question during the gubernatorial debate, and Shumlin indicated that the sales tax expansion, along with other taxes, was, in fact, an option. Someone needs to nail the governor down on this one.

Peter Herschfeld of the Vermont Press Bureau (VPB) let Shap Smith get away with similar obfuscation in his article, “Sales tax expansion likely not in offing for 2013, GOP ad notwithstanding.” (If that headline doesn’t give the official VPB position away, what would?)

Smith told Herschfeld, he didn’t intend movement on the sales tax expansion next year. A more inquisitive reporter might have asked, yeah, well what about 2014? Candidates are currently running for a two-year term, right? Or what about 2015 when the legislature is supposed actually get to tell us how specifically how they intend to pay for a $5 billion single payer healthcare system? Do you intend to move it then?

Smith also said, “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.” Great. The legislature passed 171 bills into law in the 2011-2012 biennium. So, Mr. Speaker, is the sales tax expansion in the top 170 of your things to do?

Democrats are trying desperately to avoid telling Vermonters how they intend to pay for a single payer healthcare system that will cost $5 billion dollars and require between $2 and $3 billion in new taxes to pay for it. Vermonters want to know. Why doesn’t the media?


5 thoughts on “What democratic leaders are saying (and not saying) about expanding the state sales tax to services

  1. Listening to WVMT CE&L this morning, 7 Days political reporter (did not catch his name) did his best to make the Vermonter’s First ad seem ridiculous from the production (spooky music) to content (a non-issue), and worse – FEAR MONGERING! It strikes me that when Democrats inform the public of measures they might not like it is “informing”, but when Republicans/Conservatives do the same, it is fear mongering.

  2. ….and furthermore, the cover of the Manchester Journal dated Friday, September 21 titled Wilson, Browning on taxes, electricity and healthcare. Browning listed the tax code as one of her main issues: “One of them is to continue working on the reform of the Vermont State tax code…..We need to have a tax code that’s simple, efficient, transparent and effective in raising the revenue that we need and there are ways to get there but nobody has the political will to do it.”

  3. This is an excellent piece by Rob. The fact that Shap Smith, unbidden, volunteered support for a sales tax on services last May clearly means the Democrats have it in mind and are just waiting for the right moment (after the election) to say its necessary.

  4. Rob,
    Your piece on increasing sales taxes mentioned the est. cost of vt single payer plan as being 5 billion with 2-3 billion coming from new taxes. My problem is that these figures are not specified as a yearly cost, one time cost or costs over a time period, say 10 years. When you say something will cost X dollars it seems to imply that is all it will cost to the uninformed. Just a minor point but I think is important.
    Thanks for keeping us informed.

Comments are closed.