Scott Worried GOP Tax Bills Will Explode Federal Deficit

Dec 7, 2017

Governor Phil Scott says he has grave concerns about the two Republican tax bills being considered in Congress.

The governor says it's likely that the plan will increase the federal deficit and put additional financial burdens on younger people.

A key part of the bills is a reduction in the corporate tax rate from 35 percent to 20 percent.

The bills double the size of the individual standard deduction but they also eliminate several other popular income tax deductions.

Currently, about a third of all Vermonters itemize on their tax returns and Scott thinks this number will be cut in half if that provision becomes law.

Backers of the tax plan say it will be paid for by increased economic growth over the next ten years. Scott is dubious about that claim.

"As a fiscal conservative, I have grave concerns about the impact that these tax reforms on the federal deficit estimated to be one trillion dollars over the next ten years and whether we are just shifting the costs of these reforms onto our children,” said Scott.

And Scott says the elimination of an important economic development tax credit could have a negative impact in several parts of the state.

"As a fiscal conservative, I have grave concerns about the impact that these tax reforms on the federal deficit estimated to be one trillion dollars over the next ten years and whether we are just shifting the costs of these reforms onto our children."—Gov. Phil Scott

"We're very concerned about that particularly in Bennington and some in the northeast region as well throughout the state because we made a commitment to try and invest more in our downtowns and we think that's where economic development will take place," said Scott.  

Scott says it's a mistake for the Republicans to address important issues like this one without seeking any meaningful input from the Democrats.

"It's unfortunate that we can't find  ways  to work together so that we have a bill that all of us can support,” said Scott. “I think having the middle class keep more of what they earn is important, it's just unfortunate when we're seeing this kind of polarization in Washington."

The Vermont Tax Department says their initial review of the tax bills indicates that a majority of Vermonters will benefit from the legislation but that each case depends on the specific details of an individual taxpayer.