Two views on closing the capital gains loophole in Vermont

first_imgSource: Public Asset Institute, Montpelier, 3/20/2009Capital Gains 40% Exclusion Comments to the Senate Finance Committeeby Daniel Cunningham. Burlington, Vermont, entrepreneur.Thank you for having me here today.  The last time I testified in front of a committee here was when I was a senior in high school, and the issue was the designation of the Vermont state rock in Act 221.  I can assure you I am more excited to talk finance today than geology.I grew up in Bennington, attended Mount Anthony, and studied computer science in college.   While an undergraduate I started a company that eventually merged into Bluemountain.com, which with just a handful of employees became the 8th largest site on the Internet in 1999.  I founded a chocolate company which I still run today, called Dan’s Chocolates, and I co-founded a social networking company that grew to 34 million members and was the leader in social networking in South Africa, Indonesia, and India, as well as other countries.  I moved back to Vermont in 2005, solely because I love the state.  For me, it was a move based on emotion.  And I convinced my wife from New Orleans that the weather here wasn’t too different from Louisiana.Our nation has seen a tremendous reduction in capital gains taxation in the past eight years.   As federal capital gains rates have been lowered, my job has gotten easier.  An entrepreneur, by definition, is someone who moves capital to havens of higher return.  We upset existing industries and companies by finding efficiencies and generating higher yields.A disturbing trend has emerged nationally, however.  Capital is favored so greatly over labor in the tax code that a semi-permanent aristocracy has formed.   Investors making hundreds of millions of dollars a year are paying lower marginal tax rates than factory workers.  Much is wrong both economically and ethically in the federal capital gains tax code,  many businesspeople from Warren Buffett on down agree.  Including me.So why, given this outlook of mine, am I here to argue the opposite? The State of Vermont faces a very different issue than the federal government: namely, competition.  As a state, we must compete against other states.  Entrepreneurs, especially those in high-yield fields like software, consumer brands, or finance, can live and work almost anywhere today.  And we want these entrepreneurs in Vermont, as their businesses need few public resources, have small environmental footprints, grow exports quickly, and create high-paying career-level jobs.Entrepreneurs take huge economic risks that no one else will shoulder for the promise of recognizing capital gains. Often this means forgoing salary for years.  Hence we pay close attention to taxation in this area. With one quick web search, a table of comparative tax rates is delivered to anyone who wants to view the tax offerings from every state in the union (1).  As information becomes easy to access, entrepreneurs can maximize their location decisions without hiring consultants or lawyers it only takes a few minutes to decide where you should move your business.When I informed businesspeople in Boston that I was moving back to Vermont, they would often make jokes about how I had managed to find a state that taxed more than Massachusetts.  In Vermont, the problem we face is not only that we have some of the highest property, income, and corporate taxes in the country, but that this fact has been burned into the state’s brand.   Businesspeople and entrepreneurs associate Vermont with high taxation.  The only tax we offer that is somewhat competitive is the capital gains tax with the 40% exclusion.   It is not good policy, nor is it good business,  to terminate our one area of strength.As a government, I suspect you would raise far more revenue if you keep the capital gains tax where it is, rather than raising it.  In fact, if you lowered it to, say, the level of Colorado, at 4.63%, you likely would make more still, due to the economics of the Laffer Curve.   You will have an army of entrepreneurs trying to work for you, generating both capital gains tax income and more jobs, instead of working against you and leaving the state, or never arriving, because they feel slighted.  We need entrepreneurs to move here the base of those of us who live here or grew up here is too small to create the needed job growth.My recommendation is to be competitive in the capital gains tax rate, and let entrepreneurs know.  We will tell each other, we will find the information via ads and web searches and Internet forums, and over time, you will have people clamoring to get here.   The Boulder, Colorado area is experiencing tremendous career-level job growth as entrepreneurs and businesses flee high-tax California to enjoy low tax rates in a progressive area.  We can do the same.Entrepreneurs and businesspeople are the lifeblood of job creation. We should not be placed in the same category as those who inherit money or move to Vermont because they are done with their New York finance or legal careers.  We are here to build businesses, products, and jobs.  But we are also a competitive bunch, and the State of Vermont needs to recognize its competitive position.  I ask you, in the name of all entrepreneurs in the Green Mountain State too overworked and disorganized to form a trade group, to keep the 40% capital gains exclusion in place.Whatever you decide, I would like to thank you for your service to Vermont, and for the opportunity to speak to you today.   The ability to speak directly to one’s government truly is a cherished freedom.Daniel Cunningham. Burlington. 4/8/08 The Vermont Legislature is considering closing the capital gains loophole to help offset the state’s General Fund budget deficit. Here are two opinions on that issue currently being considered by the Vermont Legislature. Legislators already have closed a loophole in the business carry forward tax loss area, where a company cannot move into Vermont anymore and recognize a state-level tax loss from previous years that was incurred elsewhere.Repealing Vermont’s Capital Gains Tax Break Would Ease Budget Woes and Improve Tax FairnessA new report released today by the Institute on Taxation and Economic Policy (ITEP) finds that Vermont could save upwards of $35 million per year if it were to repeal the tax break the state currently offers for income from capital gains. According to the report, A Capital Idea, Vermont is one of just nine states to grant preferential tax treatment to capital gains income. Together, those states will lose more than $660 million in 2008 from such policies.”Vermont’s capital gains exclusion deprives the state of millions of dollars in needed funds, benefits almost exclusively the very wealthiest members of our communities, and fails to promote economic growth,” said Paul Cillo, Executive Director of the Public Assets Institute.Jeff McLynch, ITEP’s Northeast Regional Director and one of the authors of the report, added, “Right now, legislators from Rhode Island to Hawaii are searching for solutions to mounting budget deficits, solutions that will allow them to fund vital public services without placing additional responsibilities on those families struggling to make ends meet. Repealing costly, inequitable, and ineffective tax breaks like Vermont’s capital gains exclusion are the first place they should look.”In practice, very few working class Vermonters have capital gains income that is subject to taxation. As the report notes, taxpayers with adjusted gross incomes (AGI) of less than $50,000 comprised 69 percent of all federal returns filed by Vermonters in 2006, but constituted just 14 percent of returns with income from capital gains. In fact, taxpayers in this income group received just 5 percent of total capital gains income reported by Vermonters on their federal tax returns that year.Gov. Jim Douglas has called for repeal of the capital gains exclusion.”[A] working man or woman in Vermont making $50,000 a year pays nearly 50 percent more tax than someone who does not work and simply lives off investment or trust fund capital gains income in the same amount,” Douglas said in his 2008 State of State Address.”Our state is one of only a few that has such an unfair penalty for doing an honest day’s work. This is grossly unfair. We must close this loophole and eliminate this working tax penalty.”In early 2008, the governor proposed using the additional tax revenue from repeal of the capital gains exclusion to reduce tax rates on people in the higher tax brackets. Since then, however, Vermont has suffered a sharp drop in General Fund revenue, and the governor has recommended using property taxes to cover general state spending. Ending the “working tax penalty” would be a fairer way to close the General Fund budget gap.A Capital Idea finds that the impact of repealing Vermont’s capital gains tax break would fall almost exclusively on the most affluent state residents. More specifically, 75 percent of the additional tax revenue generated by repeal would be paid by the richest 1 percent of taxpayers in Vermont families and individuals with incomes over $369,700 in 2008. Said McLynch, “Vermont lawmakers face a clear choice: keep in place a tax break that largely benefits the wealthy few or repeal that tax break and fund the investments in education and infrastructure that will speed economic recovery.”Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org(link is external).Based in Washington, DC, the Institute on Taxation and Economic Policy is a non-profit, non-partisan research organization that seeks to inform policymakers and the public of the effects of current and proposed tax policies on tax fairness, government budgets, and sound economic policy. Copies of A Capital Idea, including detailed estimates of the impact repealing capital gains tax breaks would have in each of the nine states highlighted in the report, are available at www.itepnet.org(link is external).last_img read more

Sheltowee Trace Association Honors Hikers

first_imgThe Sheltowee Trace Association recently honored 17 people who hiked 307 miles of Kentucky’s longest trail in 2014. Each year, the Sheltowee Trace Association leads a series of guided section hikes on the entire length of the Sheltowee Trace called the Hiker Challenge. Hikers are able to complete the Trace in 11 months by hiking one weekend a month.Among those who completed the trek was Kaner “Rudy” Davis, 71, of Lexington, making him the oldest to complete the Hiker Challenge. Twenty-three participants completed the challenge in 2013 and 13 completed the Challenge’s first year in 2012.  Thanks to the Hiker Challenge, more adventure-seekers have completed the Sheltowee Trace over the last three years than in the previous 32 years.The Sheltowee Trace covers 269 miles in Kentucky, and the remainder is in Tennessee. The trace begins above Morehead, Kentucky, and travels in a southwest direction through the heart of the Daniel Boone National Forest, into the Big South Fork National River and Recreation Area and into Tennessee.Also recognized at the Dec. 6 event in Livingston was the first runner to complete the trail. Matt Hoyes, of Bardstown, completed the entire trail in eight days. The association also honored at the event “Team Turtle” from this year’s Bourbon Chase, a 200-mile relay race. The turtle refers to the symbol of the Sheltowee Trace and the association. Sheltowee was the Shawnee Indian name given to Daniel Boone that translates to “Big Turtle.”Hikers who completed the Sheltowee Trace Hiker Challenge in 2014:Laura Stoehr, Cincinnati, OhioJeff Darpel, Milford, OhioNikki Van Frank, Cincinnati, OhioKaner “Rudy” Davis, LexingtonJames Davis, LexingtonRandall “Buck” Stewart, SomersetJamie Dougoud, LexingtonJohn Miller, AlexandriaRobert Trent, GeorgetownMike Henson, FrankfortPaul Wright, BereaLois Fishman, Jeffersonville, IndianaTodd Fishman, Jeffersonville, IndianaMike Fawbush, LondonBill Radford, East BernstadtAl McLerran, Jamestown, TennesseeNorma McLerran, Jamestown, TennesseeThe 2015 challenge will feature two teams of hikers. One will be a “drop and go” team that receives minimal assistance, while the other will be a fully supported team.To register for the 2015 Hiker Challenge and to learn more about the Sheltowee Trace Association, visit the website at www.sheltoweetrace.org.  Registration is open through Jan. 13, 2015.Both Morehead and Livingston are certified Kentucky Trail Towns, which cater to hikers on the Sheltowee Trace, as well as a number of other users of local recreational attractions.  There are another five communities currently working to become Kentucky Trail Towns that will also serve users on the Sheltowee Trace.Visit the Office of Adventure Tourism’s website at www.getoutky.com.last_img read more

3 places to visit during #CUNAGAC in Washington

first_img 1SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr I’m sure your bags are packed and your itinerary is set for CUNA’s Governmental Affairs Conference, which begins this weekend in Washington DC. Hopefully you plan to eat at one of the three places I recommended, before leaving the city. After you have filled up on empanadas, a half-smoke or authentic mexican cuisine, walk it off by visiting one of the many area attractions. If there is one indisputable fact about Washington DC, it’s that there is no shortage of entertainment – specifically in the form of places to visit. If you haven’t visited one of the many Smithsonian Museums (the National Air and Space Museum is my favorite) or the United States Holocaust Museum (a moving experience, to say the least) you had better make time and ignore my list of three lesser-known places to spend your free time (which don’t make TripAdvisors top ten).Library of Congress. The Library of Congress is the research library that officially serves the United States Congress, but which is also the de facto national library of the United States. It is the oldest federal cultural institution in the United States.The Library is housed in three buildings on Capitol Hill. The collections of the Library of Congress include more than 32 million cataloged books and other print materials in 470 languages, including the rough draft of the Declaration of Independence, a Gutenberg Bible and the Betts Stradivarius. The library does not publicly circulate, but if you are interested in handling books or doing research you can obtain a reader registration card in person at the Madison Building, Room LM 140 (first floor near the Independence Avenue enterance). Thomas Jefferson Building – 10 First Street NE, Washington, DC 20540. continue reading »last_img read more

Fire, police on the scene of 2nd-alarm house fire in Port Crane

first_imgPORT CRANE (WBNG) — Additional units have arrived on the scene including Port Crane Fire, Chenango Bridge Fire, and Sanitaria Springs Fire. The Chenango Forks Fire Department and New York State Police are on scene. Dispatchers tell 12 News more crews are en-route. PORT CRANE (WBNG) — According to Chenango Forks Fire Chief Daren Johns, no one was home when the house caught on fire. The house was recently purchased and under construction. 2:48 PM UPDATE: 12 News has a crew on the way to the scene. The cause of the blaze is still under investigation.center_img PORT CRANE (WBNG) — Police and fire are at the scene of a 2nd-alarm house fire at 288 Ketchum Hill Rd. 1:53 PM UPDATE: —- This is a developing story. Stay with 12 News for more information.last_img

Monaco St mansion fails to sell at auction but could be snapped up in days

first_img49 Monaco St, Broadbeach Waters.Owners Trish and Paul Robinson had renowned architect Michael Witty design and build the two-storey home, where they have lived for the past 11 years.It took 19 months to build.It has four bedrooms, four-bathrooms, an open floorplan that flows seamlessly from inside out as well as plenty of soaring windows to admire the river and skyline views.The couple have lived on the same street for almost 35 years – 23 of which were in the house next door.The mansion was one of about 30 properties on the Gold Coast scheduled to go under the hammer on the weekend.A waterfront home at Mermaid Waters was one of a handful that sold at auction.John Henderson Professionals Mermaid Beach principal Andrew Henderson said the home at 6 Sundowner Court sold for $1.337 million to an interstate buyer.“Someone had a very good Mother’s day present,” he said.He marketed the property with the agency’s director and auctioneer, Luke Henderson. 49 Monaco St, Broadbeach Waters.There was one registered bidder but no offer was made, forcing the auctioneer to pass the home in at $3.4 million.Jordan Williams and Michael Kollosche, of Kollosche Prestige Agents, are marketing the property.Mr Kollosche said there were a few buyers interested in the home.He anticipated it would sell in a matter of days as a result.More from news02:37International architect Desmond Brooks selling luxury beach villa17 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago“We’re still negotiating with three buyers,” Mr Kollosche said.“We’ve got two interstate buyers and one local.“With a bit of luck, we’ll get it sold in the next week.”The home has been likened to those in popular 60s television show The Jetsons because of its futuristic technology.It features “self-cleaning” glass, an integrated sound system, keyless entry, electric blinds and windows and sensor taps.A black marble water feature in the courtyard, electric awning for extra shade over a riverside alfresco area, 14-metre wet-edged pool, and temperature controlled wine room are also standout features. 49 Monaco St, Broadbeach Waters. 49 Monaco St, Broadbeach Waters.PROSPECTIVE buyers and spectators keen to sneak a peek came in droves to watch this spectacular riverfront home at Broadbeach Waters go under the hammer on the weekend.While the Monaco St mansion failed to sell, it is expected to be snapped up for a multimillion-dollar price in a matter of days.About 60 people crammed into its open kitchen, living and dining room while others spilt out onto the alfresco area to watch the auction unfold on Saturday afternoon. 49 Monaco St, Broadbeach Waters.last_img read more

People

first_imgAs part of a general restructuring, Austrian Federal Railways announced its new management board on September 17. Dipl-Ing Dr Helmut Draxler remains Director-General, with Dipl-Ing Helmut Hainitz as sole Deputy Director-General. Dipl-Ing Fritz Proksch becomes Director of Management Services, being joined on the board by Mag Anton Hoser as Director of Freight and Dr Gerhard Stindl as Director of Passenger Services.Mr Eduardo N Glezer has been named President of the unified Buenos Aires al Pacífico and Mesopotlast_img

Absentee Ballot Voting Begins Tuesday

first_imgVERSAILLES, Ind. – Absentee ballot voting is underway for the Nov. 4 elections. Voters can visit the county clerk’s office during normal business hours to cast a ballot.Voting hours in Ripley County are Monday through Friday from 8 a.m. until 4 p.m. (closed 11:30-1230 p.m. for lunch). Franklin County hours are 8:30 a.m. to 4 p.m.Clerks Offices are closed Monday, October 13 in observance of Columbus Day.As Election Day nears you can view registration information and polling location online.last_img

Allardyce keen on keeping Carroll

first_img Press Association Carroll’s time in London has been blighted by injury, but he is now fully fit and judging by this performance, it will only be a matter of time before he earns an international recall after Roy Hodgson omitted him from his squad for the double-header against San Marino and Montenegro. “That was the best we have seen of him here,” Allardyce added. “Because he has put two goals in, on top of a good performance. I hope this kicks him on to being a regular scorer for us in the next eight games.” West Brom were poor throughout the encounter. Aside from a deflected Romelu Lukaku free-kick in the first half, Jussi Jaaskelainen barely had a save to make. The only time the Baggies beat the Finn was three minutes from the end courtesy of a Graham Dorrans penalty. West Brom boss Steve Clarke said: “I can have no complaints about the result. West Ham deserved to win. It was a difficult afternoon but we haven’t had too many of those this season.” Clarke will speak to Youssouf Mulumbu about his red card for petulantly kicking the ball at Gary O’Neil in injury time. “I said to the group after the game that they must control their frustrations,” the Scot said. “It doesn’t affect today’s game but it affects our group and our squad and the next three games. We have a small group and it’s a big loss for us. The time to speak about it is tomorrow. He probably did it out of frustration.” Sam Allardyce cautiously underlined his desire to keep Andy Carroll at Upton Park next season after watching the striker fire West Ham to a vital 3-1 victory over West Brom.center_img Carroll has endured a difficult time in east London since he arrived on loan from Liverpool last summer, but he looked back to his menacing best on Saturday, scoring a fine brace which eased any lingering fears of relegation for Allardyce’s men. When asked whether he would like to retain the 6ft 3in striker’s services next season, the West Ham manager said: “The answer to that would be yes. There is always a possibility. We will look at the end of the season and we will see what negotiations can be done.” last_img read more

Kompany hopeful of quick recovery

first_img But Kompany, 27, tweeted: “Team was great. I felt great. Injury is a blow after all the hard work. I’ll be back to that level in no time. Thanks for all the support!.” City are currently light on central defenders with Matija Nastasic also out with an ankle problem, although Pellegrini did suggest the Serbian would be back in full training this week. With Micah Richards also missing the first game, midfielder Javi Garcia came on to play alongside Joleon Lescott in a makeshift back line for the closing minutes. City’s only other centre-back option is Dedryck Boyata, who lacked opportunities under former boss Roberto Mancini and spent time on loan at Bolton and FC Twente. City have been linked with other defenders, including Real Madrid’s Pepe, but Pellegrini has given no firm indication that he intends to move back into the transfer market. Kompany’s presence is vital to the City team and a two-month absence with a calf injury in the second half of last season proved costly in the title race. City will now await the results of a scan on the Belgium skipper. Pellegrini said: “We will see what happened with the injury. The doctor will say how days or weeks he will be injured. I can’t tell you exactly now what happened with him but I think it is a serious injury – maybe for one or two weeks.” Manchester City captain Vincent Kompany is hopeful of making a quick recovery after being forced out of his side’s season opener. Press Association City travel to Cardiff next weekend and then host Hull before the September international break. Kompany’s fellow defender Pablo Zabaleta said: “It is hard for the team to lose the captain. He is one of the most important players for the team but sometimes it happens in football. “Obviously after the pre-season people are a little bit tired. I wish him a speedy recovery and hopefully he can come back as soon as possible.” The defender suffered what appeared to be a groin injury during City’s 4-0 Barclays Premier League defeat of Newcastle at the Etihad Stadium and left the field after 71 minutes. It was the only sour note in what was an otherwise excellent first match under new manager Manuel Pellegrini. last_img read more