Category Archives: Taxation

When Fact-Checking Fails the Truth

PolitiFact came into existence 13 years ago, with a simple mission: Try to discern the factual basis, or lack thereof, underlying statements and claims from political candidates. Dig through the bullshit, uncover the facts, and determine the truth.

It’s a great idea, but it’s very tricky in practice. It assumes that there is an absolute truth buried under the mountain of political bullshit. But what if there is no such truth? In the political arena, “facts” and “Ideology” are tightly interwoven. For instance, Vermont tends to rank near the bottom of the 50 states, or near the top, depending on what’s being measured. If you tried to determine where Vermont “really” ranks, you’d be dancing into a minefield.

In recent years, VTDigger has been part of the PolitiFact network, generating its own fact-checking pieces in an effort to help voters sort through political statements. Its latest effort, unfortunately, illustrates how PolitiFact-style analysis can lose sight of the truth in its search for “facts.”

In last week’s Digger debate, Lt. Gov. David Zuckerman floated his proposal for a temporary wealth tax aimed at the top five percent of earners — those who reaped the most benefit from the 2017 Trump tax cuts. The revenue would fund one-time investments that, Zuckerman says, would more than pay for themselves in economic growth.

Scott counter-claimed that Zuckerman’s “wealth tax” would reach all the way down to households earning $159,000 or more, which he characterized as “middle class.”

Well, as I pointed out in my debate blog, Vermont’s median income is $60,000, a long way from $!59K. Also, if your definition of the “middle class” reaches all the way up to the 95th percentile, there’s something wrong. Unless you’re saying the “middle class” includes everyone between the fifth percentile and the 95th.

“Think about two teachers, married teachers,” Scott said. But according to a 2019 Digger article, the average teacher salary in Vermont is a touch over $60,000. It’s possible for a teacher to earn $80,000, but it’s very uncommon.

Scott indulged in some misleading rhetoric, in other words. And yet, somehow, Digger concluded that Scott’s argument was “True,” the highest possible rating.

And the headline on the story was the real whopper: “Would Zuckerman’s wealth tax on the top 5% impact the middle class?”

The answer to that question is clearly, unequivocally “No.” And Scott’s claim, as restated in the headline, would properly be evaluated as “False.”

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Mr. Milne’s Recycling Bin

Scott Milne tried to make up for his two previous statewide campaigns, which were remarkably issue-free, by releasing a lavishly illustrated and ridiculously detailed 60-point policy agenda this week.

His Tuesday announcement got lost in what turned out to be a very big news day, including Dr. Anthony Fauci’s guest appearance at Gov. Phil Scott’s Covid-19 briefing and Scott’s veto of the Global Warming Solutions Act.

I felt a little sorry for Milne at the time. But having taken a dip in his mile-wide-but-inch-deep policy pool, I decided it’s probably better for him that this stale batch of recycled ideas didn’t attract much notice. The package is dominated by conventional Republican tropes, failed Scott administration proposals, and plenty of filler to make the agenda seem more impressive than it is. You’d think a guy who’s reinvented himself as an edgy cryptocurrency investor would have some fresh ideas to contribute.

What’s even worse is that Milne completely fails to address some of our most critical challenges. There’s nothing about our raging opioid crisis, not a mention of racism, justice, policing or corrections, and barely a nod to climate change.

Since Milne’s document is searchable, we can quantify that. “Opiates” and “racism” are nowhere to be found. The word “climate” occurs precisely once in the 33-page document. And that’s a reference to Vermont’s economic climate.

After the jump: YOU get a tax incentive! And YOU get a tax incentive! EVERYBODY gets a tax incentive!!!

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Way Down In The Hole

[Not Exactly As Illustrated]

Brookfield Asset Management, the alleged developer of Burlington’s infamous hole in the ground, continues to be frustratingly vague about its plans and its timeline for actually building something on the former site of the Burlington Town Center. And folks, this could turn out to be the defining issue in the March 2021 city elections, when incumbent Mayor Miro Weinberger is expected to seek a third term.

And, to craft the ultimate in mixed metaphors, that hole may become a millstone around his neck.

Demolition of the old mall began nearly two years ago. Original developer Don Sinex began boasting of big plans for the site way back in 2014. He tapped out earlier this year, and Brookfield stepped into the void.

(Sorry.)

(Although Sinex’s grand vision for Burlington CityPlace can, for shits and giggles, still be seen on its splashy website. Maybe cityplaceburlington.com been declared a historic monument or summat.)

City leaders are pressing Brookfield for some measure of certainty about its plans. Brookfield has failed to miss planning benchmarks since it took over the property. It presented sketches of a site plan to for the site to city council last month, but many crucial details remain to be filled in.

Weinberger, who was a loud and vocal supporter of Sinex and has now, a little more cautiously, tossed his hat into the Brookfield ring, is sounding a little antsy. Seven Days:

“We are looking for them to do more, quickly, to prove … that, in the end, it’s going to succeed,” Mayor Miro Weinberger said. “We are looking for some further confirmation on that.”

Good luck with that, Mr. Mayor. And good luck running for re-election if the hole is still a hole in early 2021. Which is not terribly farfetched; every step on a project of this scope is going to take time, especially in a micromanaging community like Burlington.

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Phil Scott’s charity appears to be violating state tax law

Wheels for Warmth is a great thing. It turns an unutilized resource (winter tires sitting in garages) into money for emergency home heating assistance. It also gives many a Vermonter a chance to buy perfectly good snows on the cheap.

Win-win, and a testament to Phil Scott’s community-mindedness.

But when you run a charitable enterprise, no matter how noble, you have to play by the rules.

Charities that sell stuff to raise money are supposed to collect and pay sales tax. And as far as I can tell, Wheels for Warmth doesn’t do so.

An inquiry to the Tax Department produced the following information courtesy of Kirby Keeton, Tax Policy Analyst Interim General Counsel for the Department.

The state “cannot disclose tax information related to a specific taxpayer,” Keeton wrote. However, it can say whether an entity is registered to collect and pay sales tax.

Wheels for Warmth is not so registered.

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On the VPR Poll

Must have been some soiled britches at VTGOP headquarters when the news came out: a new poll shows the race for governor is a statistical dead heat.

If it’s accurate, of course. Usual caveats apply. Doesn’t help that this is the only pre-election poll we’re going to get, since VPR is the only media organization putting up money for surveys this year.

But for the sake of argument, let’s assume it’s reasonably on target.

There were reasons to believe the race would be close, but the almost universal assumption (me included) was that Phil Scott was the front-runner because of his name recognition, his inoffensive image, and Vermonters’ presumed post-Shumlin fatigue with liberal policymaking. Minter, by comparison, was known (to the extent she was known at all) mainly as a Shumlin underling, which meant she would struggle to create a profile of her own.

Instead, here we are, with Scott at 39 percent, Minter at 38, and a rather surprising 14 percent undecided.

So why is this race so close? Assuming, again, that the poll is accurate.

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Phil Scott Makes Tax Cut Plan Somewhat Less Awful

It hasn’t been that long since Phil Scott unveiled his glossy 39-page economic plan, but he’s already acknowledging one major mistake.

As the Vermont Press Bureau’s Neal Goswami reported over the weekend, Scott’s plan to cut capital gains taxes was based on Vermont’s old tax formula. As a result, the Scott campaign has watered down its cap-gains proposal.

Details in a moment. But first, let’s just put this out there:

[Cutting the capital gains tax] would spur tax shelters, generate little new saving, give a windfall to the wealthy, and make long-term budget problems even worse.

That’s from the commie-pinkos at the Brookings Institution. There’s plenty where that came from; the consensus among experts (not employed by the Cato Institute and other right-wing policy shops) is that capital gains tax cuts are, at best, a grossly inefficient way to spur economic growth. At worst, they’re a pointless squandering of resources.

But let’s return to Phil Scott’s plan, before and after. This will get into the weeds of tax policy, so my apologies in advance. I’ll try to keep things simple.

Vermont used to allow taxpayers to exclude 40 percent of their capital gains. That was killed in 2009, in favor of an exclusion for the first $2,500 in capital gains. The change was designed to concentrate the tax benefits at lower income levels; whether you got $2,500 in capital gains or $2,500,000, you got the same tax break.

Scott’s original plan would have restored the 40 percent exclusion.

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Hey kids! It’s time for Uncle Phil’s Funny Math!!!

So far, our political media has seen fit to abdicate its responsibility to fact-check the gubernatorial campaign. Instead, it has simply reported without comment the cornucopia of questionable numbers endlessly repeated by Phil Scott.

I do give ‘em credit for reporting Scott’s frequent non-answers and failures to give specifics on his own damn policy proposals. But they need to go farther. Especially since the Scott campaign has apparently decided not to respond to my own inquiries for substantiation.

Some of Scott’s figgers need a better man than I to assess, me not being a budget expert. But others are so transparently phony that even a muggle like me can see through them.

In this post, I’ll sometimes stand on the shoulders of Vermont’s number-one budget expert, Private Citizen* Doug Hoffer. In the absence of any oversight by the media, Hoffer has begun a projected series of essays examining Phil Scott’s favorite numbers.

*He’s also State Auditor, but he’s writing these pieces outside the auspices of his elected position.

First, let’s take Phil Scott’s constant claim that taxes and fees have risen by $700 million during the past six years of Democratic governance. Team Scott has failed to provide any documentation, but there is a little something in his economic plan.

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More tax-baiting from your VTGOP

Any day now, I expect Phil Scott to disavow the dishonest campaign tactics of his own Vermont Republican ParBWAHAHAHAHAHA Sorry, I thought I could get through that with a straight face.

At issue is VTGOP Executive Director Jeff Bartley’s continuing attacks on Sue Minter’s allegedly tax-happy ways. Problem: to make his case, he has to resort to fearmongering, gross exaggeration, and outright falsehood. So yeah, if Phil Scott were serious about negative campaigning, he’d clean up his own house first.

But I’m not holding my breah.

Bartley presents a two-fer in his latest press release, attacking Minter incorrectly for supporting a Vermont carbon tax (she doesn’t) and for pondering an expansion of the sales tax to include services (she’s considering it). The argument is taken further in this Tweet from @VTGOP.

Awww. Mean old lady wants to tax cute little boy’s haircut.

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Phil Scott is not a chicken, but he’s running a chickenshit campaign

Almost two weeks ago, I contacted the Phil Scott campaign asking for some simple but crucial information. It ought to be readily available, a simple email away.

The response to my repeated emails and phone calls?

Nothing. Not even a courtesy “Hey, we got your message and we’ll get back to you as soon as we can.”

Crickets.

Here’s my question. Phil Scott regularly claims that over the past six years of Democratic governance*, taxes and fees have increased by $700 million.

*He never refers to Peter Shumlin by name, it’s always the collective Democrats. Hive mind? 

All I want is the numbers. Which taxes and which fees have increased by how much? When you add them up, do they equal $700 million?

That’s all.

C’mon, if I were running a campaign and making that kind of claim, I’d make sure I had the figures close at hand. Indeed, he shouldn’t in good conscience make that claim unless he knows it’s true.

Right?

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Is this the most useless policy review ever?

Hey, here’s some good news. One of Vermont’s more problematic job-creation programs is getting a policy review.

Unfortunately, that’s where the good news ends.

The program is the Vermont Employment Growth Initiative, or VEGI for short. It provides incentives to employers who grow jobs in Vermont. The most frequent VEGI beneficiary is Keurig Green Mountain, which has raised eyebrows in some quarters, (“Fascinating,” I have found myself saying with left brow cocked, “but highly illogical.”) That’s because KGM’s rapid growth was fueled, not by the state’s generosity, but by its then patent-protected K-Cup brewing system.

Since its patents expired, it has struggled to maintain market share, bungled two key product rollouts, and — VEGI grants or no VEGI grants — laid off hundreds of Vermonters.

So yeah, I’m all for a review of this program. Unfortunately, this is a fox/henhouse situation. The people doing the review are members of the Vermont Economic Progress Council, the panel that awards the VEGI grants in the first place.

Uh-huh, they’re reviewing their own work.

That ought to go well.

But wait, there’s more!

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