Vermont voters have made clear that they are frustrated with a rising cost of living, including their tax bills. There is certainly a lot to be upset about: housing prices are rising faster in Vermont than in any other state, the property tax burden has increased by a cumulative 33% in the last three years, and the cost of essentials from gas to groceries has skyrocketed in the last five years.
While Vermonters are rightfully concerned about affordability, unfortunately, the Trump administration is determined to make matters worse, not better. Canada is Vermont's single largest trading partner, and we are almost singularly dependent upon their energy sources, from gasoline at the pump to electricity and natural gas. The tariffs to be instituted next week on Canada - 25% tariffs on goods and 10% on energy - will have a crushing effect on the budgets of Vermont businesses and families, and comes on the heels of 40-year high inflation rates. Of note, much of the lumber used to build homes in Vermont comes from Canada, even if it was harvested in Vermont. These tariffs will significantly increase construction costs in Vermont at a time when we need more new homes being built, not less.
And Canada's reciprocal tariffs - along with a major reported decline in tourism accompanying the geopolitical tension - will lead to job losses at major Vermont employers and hurt our state's revenues. Vermont imports $2.6 billion per year of Canadian goods, much of it being electricity and heating fuel. While Vermont is uniquely exposed to a trade war with Canada, the trade wars Trump has initiated with Mexico, the European , and China will also lead to consumer price hikes, especially at the grocery store.
The nonpartisan Petersen Institute for International Economics has determined that the typical middle class family would pay $1,200 more per year in taxes due to Trump's tariffs, even before accounting for Vermont's strong ties with Canada. On a nationwide level, Petersen reports that these tariffs are the single largest federal tax increase since 1993.
While Republicans in Washington have pursued an inflationary agenda - paired with tax cuts for billionaires and cruel cuts to veterans benefits, social security, and Medicaid - thankfully Vermont's leaders have worked to address the state's affordability crisis in a number of encouraging ways.
In recent weeks, the House Ways and Means committee - chaired by Brattleboro Rep. Emilie Kornheiser - advanced a bipartisan bill to bring tax relief to working families and seniors. H483 would make three major adjustments: expanding the child tax credit by 18% by providing benefits through age six; increasing the exemption level for social security checks so that more seniors have tax exempt income; and increasing the earned income tax credit for low-income single Vermonters. All three initiatives will put money back in Vermonter's pockets as costs go up elsewhere. Hopefully these proposals will win the support of the full legislature so that they can be signed by Governor Scott, who has indicated his support for these initiatives.
Elsewhere, the legislature has acted to buy-down this year's education property tax increase, ensuring that the average Vermont taxpayer won't see another dramatic increase this year. While these items alone won't solve our affordability crisis, they're meaningful steps in the right direction. What Vermonters need is leadership in Washington that will focus on lowering costs for families and businesses, not placing new taxes on our businesses and families through the pursuit of painful trade wars with our largest economic partners.
