The United States Census Bureau released income data this week and a couple things jumped out at us.
First, the highest median household income in the nation is being earned in New Hampshire. Granite State households are bringing in $76,260/year - 30-percent more than the national median of $59,039.
Second, Vermont is the only state in the country that suffered a rise in our poverty rate. Data shows that over 71,000 Vermonters are now living below the poverty line ($12,228 for individuals & $24,399 for families)… 10,000 more than last year. By way of comparison, New Hampshire has the lowest poverty rate in the country, at 6.9 percent.
We’re not surprised.
Remember last year Vermont ranked as one of the worst states in the country to make a living… 45th overall, according to MoneyRates.com list of the best, and worst, states to make a living.
The independent, non-partisan Tax Foundation ranked Vermont 46th and New Hampshire 7th, respectively, in its most recent index on states’ business tax climate.
The American Legislative Exchange Council this year ranked Vermont 49th out of 50 in the economic competitiveness index in the annual “Rich State, Poor State” review. We have finished last or second-to-last every year since 2008.
Vermont suffers the highest confluence of income taxes, property taxes, tax progressivity, estate taxes, minimum wage, and costs of living in the nation. We also rank tops in the country for age, welfare enrollment and government employment - all factors to blame for the mass exodus of jobs and people leaving the state.
With our money, we grow… the public sector. It’s the largest employment sector in the Green Mountain State.
That’s it.
With their “Live Free or Die” ethos turbo-charging their robust economy, New Hampshire taxes neither sales nor income.
Last year Art Woolf looked at Vermont taxes (personal and corporate income, sales and meals and rooms, gasoline and diesel fuel, property and a variety of others) and concluded the following - They’re high…. Really high.
“I base my opinion not on the actual $3.4 billion in taxes,” Woolf explained, “but by comparing Vermont to other states and by measuring taxes as a share of what the U.S. Commerce Department calls “personal income” — the total amount of wages and salaries, interest and dividend income, as well as Social Security, pension and other sources of income earned by Vermonters.”
According to Woolf’s research, we send 12.1 percent of our income to Montpelier. The national average is 10.4-percent. The difference between Vermont and the national average “may not seem like much,” he wrote, “but the difference translates into $490 million…. Another way of saying that is: if Vermont’s state and local governments taxed the same as the average state, taxpayers would save $490 million. That’s a lot.”
The comparison to New Hampshire is way worse. In the Granite State, residents pay 8.3-percent of their income - fourth lowest in the country. “If Vermont taxed at New Hampshire’s level, our taxes would be one billion dollars less than they actually are,” Woolf explained.
Finally, Woolf took a look at what we’re getting for our money. After all, “If the government services that Vermonters receive from those high taxes are of much higher quality than in other states, then high taxes may be a reasonable price to pay.”
The problem?
“Nearly half the taxes we pay are to fund Vermont’s schools,” Woolf reminds us. “If we had evidence of high quality government services, that evidence should show up in our students’ performance… I don’t find evidence that Vermont’s students, or its high school graduates, are significantly better prepared or perform better on any objective measure of performance, than similar students in other states.”
It’s worth keeping in mind when you watch Burlington teachers striking this week - dissatisfied with their average $100K/year salary and benefit packages.
The bottom line is that Vermonters are paying a billion dollars more than New Hampshire, per year, for schools and government services of the exact same quality. To us that’s pretty clear evidence of failed leadership.
Meanwhile the pro-growth, low-tax approach leaves New Hampshire with a more more impressive, enviable overall fiscal state. We remember a couple of reports last summer. The Union Leader reported: “The New Hampshire treasury is stronger than it’s been in years, with annual revenue for the fiscal year ending on June 30 running almost $100 million over budget, according to unaudited figures.”
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