How Do Two Big Tax Cut Proposals Compare?

The House Ways and Means Committee continued to review H.510, a $100 monthly refundable child tax credit proposed for each child under six years of age in a family, modeled after the now-expired Federal Child Tax Credit. These funds would come in a monthly cash payment to help with household expenses. According to the legislative fiscal analyst, “It is a reasonable conclusion that you could expect a lot of families in Vermont to use that child tax credit for child care like they have at the federal level.” This expenditure would be funded out of the State budget at a cost of $58 million per year.

The Department of Taxes provided a comparison of this bill to the $50 million tax cut proposed by the Governor. The Governor’s proposal includes a suite of tax changes and proposals directed at tax relief for working families and retirees. The department raised concerns about smaller percentage of Vermonters reached with H.510, 11%, compared to the Governor’s proposals, 24%. Both proposals are meant in part to help recruit more people to live and work in Vermont, a priority of the Vermont Chamber. The House Ways and Means Committee has yet to do a review of the Governor’s proposals.