Vermont Candidates Propose New Income Tax on High Earners

The plan targets households earning over $250,000 to generate $345 million in annual revenue for universal primary care.

Updated on Oct. 21, 2026 in Taxes

Vermont Candidates Propose New Income Tax on High Earners

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Do you support increasing income taxes on high earners to fund public services in your area?

Political candidates in Vermont have proposed a new income tax structure targeting households earning more than $250,000 annually. The plan aims to raise $345 million each year to fund the expansion of universal primary care.

Why it matters

Proponents argue that current tax revenue is insufficient to cover the state's needs, while opponents warn that the additional levy could drive high-earning residents to move out of the state.

The proposal includes a 2% additional tax on 22,000 households earning under $500,000 and an 8% tax on 4,500 households earning over $500,000. These groups join the state's top 1%, which currently pays over one-third of Vermont's total income tax.

The players

Phil Scott

He is the current Governor of Vermont and is expected to veto the proposed wealth tax if reelected.

Fair Share Campaign

This advocacy group began operating three years ago to push for increased tax revenue for healthcare, housing, and transportation.

The details

The Fair Share Campaign supports this tax increase to provide funding for transportation, housing, and healthcare. If implemented, it would represent a significant change in the state's fiscal approach, following previous efforts by lawmakers to reverse federal tax cuts for wealthy residents in 2018.

2018: Vermont lawmakers clawed back federal tax cuts.
2021: The Fair Share Campaign began advocating for the tax changes.
2024: State officials completed the primary data collection period for income earners.

Market Dynamics

This proposal extends the fiscal pattern established by the 2018 reversal of federal tax cuts for high-income earners in Vermont. The plan reflects a broader trend of state-level efforts to adjust revenue streams independently of federal tax policy cycles.

Households earning over $250,000 would face immediate changes to their annual tax obligations if the legislation passes. These residents may need to adjust their long-term financial planning to account for the additional 2% or 8% income tax surcharges.

The takeaway

The proposed tax plan highlights the ongoing debate between funding public services and the potential economic impact of tax policy changes. Readers should monitor upcoming election outcomes, as the gubernatorial stance remains a critical factor in the legislation's future.