Vermont Candidates Propose Income Tax on High Earners
Households earning over $250,000 may face higher state taxes if the proposal passes to fund universal primary care.
Updated on Oct. 21, 2026 in Taxes
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Political candidates in Vermont have proposed a new income tax on households earning over $250,000 to fund universal primary care. If enacted, this proposal would impact approximately 26,500 households in the state.
Why it matters
Proponents argue that current tax revenue is insufficient for state needs, while opponents warn the tax could prompt high-earners to relocate. The plan aims to generate $345 million in annual revenue by targeting specific income brackets.
The proposal includes an additional 2% tax on 22,000 households earning under $500,000 and an 8% tax on 4,500 households earning over $500,000. These figures are projected to generate $345 million annually for the state.
The players
Phil Scott
The current Governor of Vermont who is expected to veto the proposed wealth tax if reelected.
The details
The tax structure applies a 2% rate to those making between $250,000 and $500,000, and an 8% rate for those earning above $500,000. This follows a broader trend of state-level income tax adjustments, including previous efforts to reverse federal tax cuts in 2018. The revenue is specifically earmarked for investments in transportation, housing, and healthcare.
Timeline
2018: Vermont lawmakers clawed back federal tax cuts.
2021: The Fair Share Campaign began.
2024: Data collection period for Vermont state income earners.
Money Landscape
This proposal builds on a trend of state-level tax adjustments that gained momentum after Vermont reversed federal tax cuts in 2018. The current debate reflects ongoing tensions between revenue requirements for state services and the competitive tax environment for high-earning residents.
Households with annual incomes exceeding $250,000 should monitor legislative developments to understand potential shifts in their state tax obligations. Consult with a qualified tax professional to evaluate how these proposed rate changes could impact your annual financial planning.
The takeaway
The proposed tax could shift the financial burden for over 26,000 high-earning households in Vermont. Residents should track the upcoming gubernatorial election and legislative sessions to see if these rates are finalized into law.
Further reading
For more information on the current tax climate, visit our Taxes section.
Source note: This article includes information reported by Wcax.
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