Vermont's progressives tax the poor
Vermont has enacted a series of economically regressive policies justified by socially progressive ones.
Vermont's renewable energy plan created a net metering system that transfers money from fixed-income (often elderly) ratepayers to those with the (state-subsidized) means to install residential solar panel systems. For years, this scheme has propped up a "progressive" industry that still can't stand on its own.
The Vermont Department of Public Utilities dropped this net-metering rate by merely one penny in 2020, despite complaints by the Department of Public Service:
The Department argues that net-metering is among the State's least cost-effective pathways to advance Vermont's renewable and environmental objectives. According to the Department, the compensation rates currently paid to net-metering customers substantially exceed the value of the output and the cost of obtaining an equivalent resource elsewhere, resulting in an inequitable cost shift between customers who net-meter and those who do not[.] ... The Department estimates that net-metering systems installed through 2018 are costing customers an additional $37 million annually, or $60 per residential customer. The Department contends that this cost shift falls heaviest on lower-income Vermonters who cannot afford the up-front costs of purchasing a net-metering system. (pp. 13–14)
The same imbalance occurs in Vermont's electric vehicle (E.V.) plan: wealthy Vermonters buy new cars with state subsidies. Meanwhile, poor Vermonters often drive uninspected vehicles because of absurdly burdensome requirements — small rust holes can cause functional vehicles to be junked — not environmentally progressive, but it shifts wealth.
The Transportation Climate Initiative (TCI) repeats the pattern: adding a gas tax to "incentivize" residents is as regressive as any sales tax. The TCI sports further inequities due to intra-state transfers. Then there's 2020's newfangled Global Warming Solutions Act (GWSA), which equips administrative agencies to make unilateral rules stemming CO2 admissions. This will compromise property rights — regressively. The GWSA creates a cause of action for out-of-state "nonprofits" to sue the state to compel compliance, replete with statutorily authorized attorney's fee awards. No such rights are afforded Vermonters. This act funnels money to wealthy attorneys and special interests at the direct expense of poor rural Vermonters.
These economic burdens cause poor Vermonters and small businesses to flee the state and impoverish those who remain. This is where progressives invoke "progressive taxation" — the poorer the regressively taxed citizens become, the more the left seeks to increase taxes on Vermont's modest slice of high earners. Yet many in their ranks are suffering economically under COVID — their pockets have shrunk.
Fiscally, Vermont's schizo-progressives are like a ravenous dragon eating its tail. Math is a bothersome intruder in social engineering fantasies, but intrude it will. This ends in collapse, which appears imminent. Among other signs of strain, Vermont's state pensions system is greatly underfunded, contributions having been diverted to various regressive-progressive initiatives. Most retirees are of modest means: this will worsen when the pensions fail.
Vermont's various experimental "globe-rescuing" initiatives share the same modus operandi — making one group of people poorer, then sucking more money from another, siphoning off the "administrative costs" (vig) to feed a bloated bureaucracy. How many more regressive straws will it take for Vermont's progressives to break the back of Vermonters?
Image: Ira Allen.