Vermont: In The Rear View Mirror

Why We Have Abandoned Vermont
by
Glen A. Wright, CPA

My wife, Rosemarie, and I have abandoned Vermont.

There is no more painful decision for two 6th generation native Vermonters than to give up residency in the state where we have spent the last 60 years, raised our family and grown a successful business. The moment of truth for us came recently when we had to relinquish our Vermont driver’s licenses.

But the tax burden in Vermont has become more than we are willing to bear. We can’t take it any more and are taking the only possible alternative: leaving Vermont.

Our decision has not been a rash one. For years I have tried to convince policymakers in Montpelier that Vermont’s high tax burdens are driving native Vermonters away. These warnings have always fallen on deaf ears.

 The recent legislative action reducing the state income-tax deduction, the estate-tax exemption reduction and increasing tax on capital gains will have a significant negative impact on us. Becoming Florida residents eliminates our entire state income-tax burden. We will also experience a significant reduction in our property taxes. The value of our house in South Hero is approximately the same as our residence in Ocala, Florida.  My property taxes in Vermont last year were in excess of $12,000.00. My property taxes in Florida after claiming the homestead exemption will be $4,000.00.

I have been a practicing tax CPA in Vermont for the past 37 years. In that time, I have advised many former Vermonters on the benefits and steps to take to change their residency from Vermont. These clients represent a significant amount of tax revenue to Vermont.

For years, the legislature has dismissed the fact people leave Vermont for tax purposes because they had no specific evidence of the people leaving.  I testified many times to legislative fiscal committees on tax matters, as did many other tax professionals. These committees refused to believe people were leaving Vermont because we professionals, bound by confidentiality, would not disclose names.

Now, I want to go on record that I am leaving Vermont because of its high tax burden.

Vermont’s high cost of living burdens not just  high-income taxpayers. My mother, 85, was born and lived her entire life in Enosburg Falls. Even though she has a good retirement benefit from my deceased father, she struggles to maintain her house and modest lifestyle. Property taxes, income taxes, sales tax and high fuel and electricity costs have forced her to consume the equity in her house in order to live. She is very disappointed with the massive changes in Vermont’s way of life.

In her words: “The legislature has stolen Vermont from the people who live here and then completely destroyed it.”  She, too, would like to leave Vermont, but it is not feasible for a woman her age.   

The majority of Vermonters have become “takers” from government and the number of “givers” is not only in the minority but decreasing every day.  If Vermont continues with its current tax policy, there will soon come a time when the “givers” are gone and the only ones left will be the “takers” who will no longer have a source of tax revenue for their taking. 

In my opinion, we are already there and the recent proposed legislation only accelerates the flight of the “givers”.

That’s why Rosemarie and I are sadly leaving our former home state that now seems intent on destroying itself.

 

(Glen A. Wright formerly lived in South Hero. He has been a practicing tax CPA in Vermont for the past 37 years before he and his wife recently moved to Ocala, Fla.)

Comments

[Alec]

I personally know a couple, well established in the Burlington business community, that changed residency to Fl. several years ago.

They kept a home in VT but not their money.

[Indrek Oruoja]

I also personally know several who have moved from the talking stage to actually taking active steps in preparation to leave the state. This article should not only be front page material, it should be sent to every single legislator in Montpelier, and finally, be transferred to the state historical archive as it surely reflects an upcoming event of significance. Of course, there will always be the one's who refuse to believe it could happen, even when the fumes from the last moving trucks have faded away.

[Richard]

Ditto here.

Two neighbors of mine have left for residency in Florida, though they also have kept their homes in Vermont, as well.

What they haven't left here in Vermont is their loyalty; one that comes with their connection to community and the wealth that this group can impart onto various charities and local causes.

[Lazarus Long]

We have been waiting 14 months for a buyer for our house to step forward. Our equity is keeping us chained to the state.

[GreggB]

I believe the number of folks leaving VT is far more than most realize. I could be wrong. Time will tell.

[Mark Candon]

I can just see the Legislative committees ignoring this gentleman's advice. Preston Smith of Killington? Tony Perry of Sirloin Saloon? Why, Vermont'll be better off without these greedy business guys!
Can't wait to join them myself. Mark Candon

[Mark Shepard]

The problem is that the majority in the legislature does not care, or if they do, they want what is happening. This has been known for years. Our (producers and givers) moving out reduces their opposition and thus serves their purposes. Why else for example would they go after VT Yankee as they do?

Like, the Wrights, all producing Vermonters are forced to consider what the Wrights spent a long time weighing in their minds. Many went before them and many will follow after.

There is a reason our house is for sale. As another sixth generation Vermonter, who also actively did all I could to help redirect Vermont, I understand fully the painful struggle the Wright's have gone through. But Vermont is no longer Vermont. The mountains, lakes and rivers are still Vermont, but every handout policy has helped drive the Vermont mindset out of Vermont.

Most of my customers have left Vermont. The pressures on youth to engage in drug and alcohol abuse and unnatural and/or unhealthy sexual activity are real. Our number one job as parents is to provide an environment where our children can discover their talents and dream about their future. Vermont no longer provides such an environment. It is no accident that nearly 25% of Vermont’s young men are under the supervision of the Department of Corrections. This is a consequence of implementing bad ideas.

Vermont is a land of make-believe where destructive ideas are embraced as good ideas. This is the case for both economic policy (big government and high regulation and taxes) and social policy (such as embracing drug usage and sexual activities that are risky and even deadly). Up is down and down is up. The crash is only a matter of time.

[txgordo]

I left partly because the business conditions at IBM would probably not keep me employed, but I was also horrified by the Burlington schools, and I am glad to leave the tax burden.
My son had a good 4th grade year in BSD, but he was put in a combined 4th-5th grade class with an inexperienced teacher for 5th grade. He was an advanced math student, but had to go thru 4th grade math as well. Some other 5th graders were getting some advanced math, so my wife asked about getting him into this advanced math session. She was told that the school needed to integrate the students socio-economically, so, because we were of 'advanced' income, he had to stay where he was! My daughter had similar experiences. We are now in an Austin Texas school district where excellence is promoted and expected, not dumbed-down equality. My kids started out behind, but they are being challenged, and now are flourishing.
I have no state income tax. I do have relatively high property tax rates, but still lower that Chittenden County. And the scenery in Austin is comparable, if not better, than what Vermont offers. And the sun shine most of the time.
I am a native New Englander. I went to HS and college in Burlington. I still have lots of family in NE. My kids are native Texans, however (this is our second tour of Austin), and we are here for the forseeable future. Vermont has gotten soft; the can-do spirit is gone.

[Ed G. Mann]

I'm going to be in South Carolina, next month, looking at buying a house near Greenville.

As I commented here elsewhere, sold all real property, 4 years ago and rented, waiting for the other half to find work down there. (She works with the Feds in Williston) She also is a coupon clipper as Shummy likes to tax them er call them.

My regret is not being able to say I've been a Vermonter all my life.

Then again, this isn't Vermont anymore either. It's like Berzerkly East.

[NYC & VT Girl]

Wait! You mean all is not well? I thought I was escaping ludicrous legislative ideas when I crossed the border....
My husband & I are a bit shocked and saddened by the "local youth" and their drinking/drug/have a baby habits. But, realistically, there's nothing for them to do and if they have "white trash" parents they are totally screwed. Hunting and fishing will only entertain you for so long.
What is driving the legislature? Who are these people? Our Senator was the head of the Cabot Co-op at one time - he seems sensible. I keep wishing a dairy farmer were the Governor of NY to inject some common sense into this totally screwed up state.
Now I'm totally confused....

[Kevin Ellis]

It is fascinating to watch Glen Wright and the other writers ditch the state where they made their wealth, claiming that they can no longer keep as much of that wealth. My experience has been that with advisers as canny and skilled as Glen, wealthy Vermonters have always been able to do just fine. It would surprise and sadden my Vermont-born children that this state drives people away. They constantly report back from college at the pride they have in telling classmates they are from Vermont. They also report that the common refrain from those classmates is: "I wish I could live in such a great state." I am sorry to see Glenn go. I would prefer he stay and lead a discussion on how to leverage Vermont's assets so it can thrive in the new knowledge economy, while finding a way for people of modest means to live here. There is far too little discussion of that issue, although I suspect that a major part of the solution is for the successful folks to put their wealth, skills and knowledge to use in achieving that mission. If Warren Buffett and Bill Gates can do it, I suspect our wealthy class can too.

[GreggB]

A year ago there would have been a bunch of comments here from folks saying essentially no one ever leaves regardless of tax and regulation levels. Where are they? Wonder if they still believe the VT quality of life outweighs everything else?

[aynerand]

Mr. Ellis' post strikes me that our fundamental problem in Vermont is simple ignorance. Some us (a rapidly depleting number)view the basics of wealth creation, and therefore broad prosperity, as a function of a supportive business climate, level of taxation, regulation and workforce, to name the high level needs.

While others reject these principles in favor of so-called sustainable development. Which I cannot exactly define except to observe that it includes bizarre economic development plans, requires all goods and services to be produced and consumed locally, offers the best possible social services, assesses high taxes to pay for them but then oddly restricts new development that would pay taxes. Oddly some favored sectors are encouraged, like boutique energy firms, but the working class is assessed premium rates to ensure their success.

This paradox is at the center of the present budget debate. I sorely wish that the left would make a decision here. Pro growth with big government or no growth and therefore lean government. Something has to give.

[Bob Zeliff]

It is always sad when some one leaves VT when they do not have to. This fact has been true for about 150 years now. I think our state population dropped significantly after the Civil War when people went out west for a better easier life. I believe it was around 1960 before the Vt population again equaled the 1860 numbers. We now see a number of people who have made the cost benefit trade off ($8000?) and left. I do not see them as martyrs. Others are staying. The fact is Vermonters by their votes want the expensive infrastructure / safety nets for the less fortunate. Many on this blog do not like that. One solution is to leave. Vermont is a way of life, both the hard and the easy part. While I find the whinning distastful, the running away disappointing, every one makes their own choices. To those of you who are leaving I wish you well. I'm staying.

[Lazarus Long]

I would not call it 'running away' but rather being pushed away or voted off the island. For those of us wanting to vote with our feet, it is still mostly a secret ballot.

[Richard]

Bob Zeliff:

Pride & arrogance cometh before the fall.

[G. Cross]

"Some us (a rapidly depleting number)view the basics of wealth creation, and therefore broad prosperity, as a function of a supportive business climate, level of taxation, regulation and workforce, to name the high level needs." So the real problem here is that corporate welfare is higher in other states. This seems to me to suggest that the transfer of wealth is either from the rich to the poor or from the poor to the rich as many poster on this site find more desireable. Maybe if we all sat around the same table for a real discussion of everyone's needs, we could figure this out. Running does not sound like a great problem solving technique.

[gavin]

Vermont is not a way of life.it is a state which has been moderatlly sucssesful when affordable and abandoned when not.

[Chris Campion]

Mr. Zeliff finds whining distasteful - would Mme. Antoinette have come to the same conclusion?

Vermont is not a "way of life", if the way of life means to have one of the lowest median incomes in the country coupled with one of the highest tax burdens in the country. It's hardly lively. This is a direct result of a purposefully restrictive business climate, one that (at best) inhibits growth and entrepreneurship, and scares businesses and people to other states. Without businesses, no taxable income - so no infrastructure/safety nets can get funded, or funding is harder to come by. And would the demand for safety nets be so prevalent if incomes were higher in the state?

I'm a Native Vermonter. Pushing that one step further, I'm also Micmac, which probably puts me in the "my ancestors were in New England before just about anybody else" camp. I've lived in VT for all but 4 years of my life. I work two jobs, one full-time, and one part-time to help makes ends meet. I go to grad school part-time to improve my own career opportunities.

Given the above, I don't think what I write here, or what others write, constitutes whining. It constitutes criticism, and if that's not the Vermont "way of life", then you've missed something glaringly obvious in the Vermont experience. We can still vote with our feet, too, even if every elected politician seems to enjoy a high re-election rate. This is not an uncommon occurrence in the US, in terms of re-election rates. Perhaps years of seeing nothing change in Montpelier, and a dying state economy forces a decision upon Vermonters, yet only a certain percentage of them have the capacity to make the choice. Certainly the younger Vermonters are making that choice and leaving the state, as they have limited equity yet to put at risk and know opportunity lies elsewhere. But as our demographics are aging here, the largest tax burden is placed on those with the least capacity to pay as their homes have grown in value over the last few decades, yet their incomes have shrunk to a fraction of their lifetime earnings. We ask the most from those with the least. Our legislature fixes these inequities with other redistribution schemes that do not correct the fatal flaws of our business climate and tax structure, which necessitate legislative "fixes".

What a "way of life" we're celebrating here.

[Glenn Eno]

This is one of the most commented on posts I have seen. There is an saying- "If you don't like what you see- leave". Most have left Vermont quietly, without fan fare. Vermont HAS changed. The socio-economic comment made by txgordo holds a lot of weight with me. I have seen the decline in education. There are always changes to the curriculum in what I see as trying to invent a better mouse trap. Act 60 has shown the unintended consequences warned about when a liberal court forced this upon us: Instead of raising the bar of the receiving towns, we have lowered the bar of the contributing towns. The education fund has turned into a sucking wound which bleeds more out of each of us every year.

Vermont has provided me with opportunity. I am in the construction industry and it has been a long time since construction has been affected by a sustained downturn in the economy. Now our belts have been tightened. I don't have the discretionary spending money that I had just a year ago. I no longer spend money on things I simply want. I think most Vermonters, and Americans, have curtailed spending. The last thing we need is to have the government take more to run programs that they "want". Legislators will point to essential services- police, fire and rescue as areas which will be cut. This fear mongering technique is marched out every time tough budget choices need to be made. It is time to stop hiding behind that skirt and get to work.

Some will still leave, most will stay. Somewhere there needs to be a point when the government realizes enough is enough. We cannot spend our way out of this budget crisis. Trickle up poverty has begun.

We must break government's addiction to our money.

[Peter Joes]

Let's see - - the choice between Florida and Vermont.

No amount of $$ would make me move there. So, I'm thinking those that move to Florida have lots of other reasons for doing so.

I think someone has misplaced priorities when they have significant means, love Vermont, and move to Florida solely for the purpose of beating taxes (that they have plenty of ability to pay).

I do have to pause to consider those that love Vermont but feel they have to leave to get a decent job or find inexpensive suitable housing. We don't do everything perfectly and do need to do better.

PJ

[dennis lukas]

In a recent post about the the teachers receiving a 3.5% increase , many stated that the majority has spoken, and are in control of Vermont. This is true. The problem is that those in control produce no revenue to support the programs they support.As the the providers of revenue leave the state.Those left will have to fund the the social programs and pension funds.There is nothing left, so we will tax everyone for anything.Vermont is bankrupt,the sooner you leave the better off you will be.Or you you can support those that do not wish to work.

[GreggB]

If you love it, leave it. If you still love it, you can return and rebuild it after the collapse.

[Lazarus Long]

If the hosts continue to depart (or die off) what will the parasites do to acquire more hosts upon which to feed? A common biological problem now happening on a human/social platform. I think the parasites are looking for the wider population to become host material. That is, get the federal gov't to supply the blood they suck.

I'm sure the legions of the unfortunate that will be in the State House today will bring a tear to many eyes. But ask yourself if you can recall in the many times this sort of event has been staged if even one of the unfortunate speakers has ever looked squarely at the news camera and thanked the Vermont taxpayer for the help the taxpayer has given.

[Mark Shepard]

While I would greatly appreciate the taxes being lower, that is not at least directly my primary struggle with living in Vermont. Sure is has been a factor in most of my customers relocating to other states. However, my greater concern is the side effects of a more and more centralized and bloated government that aggressive pushes bizarre and destructive social ideas.

The net of this is less healthy opportunities and more unhealthy opportunities presented to our children. If the future of our children were not a concern, I would happily roll up my sleeves and stay fully engaged in the battle. I love battling from a sound point of view and while in 2000 I really did not know if one could effectively win such battles, after winning two terms in the Senate from a liberal county, while clearly challenging liberal ideas, I have become convinced that we can win these battles. But as has been shown the two elections since I ran, being moderate is not a path to victory. At best that just slows down the slide to the left, but more often than not moderate ideas and candidates are ignored.

I fully believe Vermont can turn around, but it requires an engaged citizenry, not unlike any time in history. Vermont will not turn around simply by electing people with more common sense. It is going to take a true cultural shift, which means each citizen doing what he or she can to help others understand the disastrous direction Vermont is headed.

After more than two decades of Bernie Sanders’ incoherent (and failed the world over) ideas being propagandized, they have begun to take hold. It will take effort and time to undo this. Electing people willing and able to effectively communicate with the citizens on healthy policy vs. unhealthy policy is very important, but it will take much more. The more Vermonters make a consistent and conscious effort to expose why the ideas that have taken hold are why we are in the mess we are, the sooner and more likely Vermont is to turn around. Study the issues, consider the possible human responses to the various policies and talk with friends, family, neighbors and coworkers when the opportunities arise, which given the state of Vermont, will be very often. Almost everyone is concerned. Now all they need a little help connecting the dots. Do not shy away from any issue because they are all connected, every one of them. And do not elect people who do not understand that all issues are economic and all issues are social.

The left has worked for decades to create the disaster they have created. It will take time to undo this mess. Doing so will avert a lot of suffering from a lot of people.