Estate Tax May Help Balance Vermont State Budget

The state has faced declining revenues this fiscal year from the income tax. But one revenue source has vastly exceeded projections: the estate tax.

The Shumlin Administration says if Vermont makes its revenue target this year, it will be mainly because a few very wealthy people died.

With 11 months of fiscal activity in the books, revenues for the personal income tax are running $17 million below projected targets. This represents roughly a 3 percent shortfall.

Administration Secretary Jeb Spaulding says income tax revenues took a big hit in April. That’s when state economists underestimated how many people would take advantage of capital gains tax benefits in 2012. This situation also occurred in many other states.

Spaulding says the revenue gains in April of 2013 resulted in losses in 2014.

“We knew a year ago April that we had by far and away the largest personal income tax month for collections in the state’s history,” Spaulding said. “And that had a lag effect that meant that the estimates for April 2014 did not materalize.”

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