Times Argus: New tax on workers part of proposed unemployment fund fix

By Peter Hirschfeld

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Sen. Doug Racine, a Chittenden County Democrat and gubernatorial candidate who sits on the economic development committee, said the employee tax provision compelled his vote against the bill Friday.

“I believe it’s a rather huge additional tax burden on working Vermonters that just can’t afford this right now,” Racine said.

The Douglas administration also opposes the paycheck surcharge.

“While we respect that we have a crisis with regard to the unemployment trust fund, we think there are ways to solve this problem without instituting a new tax,” Moulton Powden said last week.

While the tax proposal has drawn opposition from officials on opposite ends of the political spectrum, the real contention will lie in how to make up the $23 million in new revenue the tax would generate annually.

Racine and other Democrats say the onus is on the business community, which they say would shoulder a disproportionately small burden under the legislation passed Friday. Democrats by and large attribute the unemployment fund problem to chronic underpayment by employers, who have seen tax rates go unchanged over the last quarter century.

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