TOWNSHEND — To clarify: The purpose of the tax on non-wage income (dividends, interest, etc.) is to make sure that taxpayers whose primary source of income is not wages also contribute to Green Mountain Care. The 10-percent tax would be due only on the amount by which non-wage income exceeds wage income. Very few people would pay it, since most people receive more in salary than they do in interest and other such income sources.
S.252 does not increase the amount Vermonters pay in health care. We already pay more than $1.6 billion through health-insurance premiums and taxes to support those without health care. S.252 simply reallocates how this is paid, hopefully in a more fair manner.
S.252 raises most of the money from the employer payroll tax because this is the only tax that is fully deductible as a business expense. In effect, the federal government will pick up 25 percent of the total tax burden if we use this method.
Using the payroll tax, the financing plan costs Vermonters $1.2 billion. Using the income or sales tax costs $1.6 billion.
Either way, it might be less than what Vermonters now pay.