Vermont’s Relocation Grant, Really?

By Brett Godfrey @ Shutterstock.com

I keep a regular eye on the way states treat their citizens. I regularly warn readers here to avoid those states papering over their structural problems with higher taxes and freedom-restricting regulations. At the same time I applaud those states where entrepreneurs and businesses are rewarded for their hard work and innovation with lower taxes and greater liberty.

One thing that is upsetting to me and probably to most Americans is when a state uses its tax dollars to reward a specific group. Picking winners is not in a state’s best interest, nor is it good for that state’s citizens. Despite that, Vermont is trying to pick winners with a new program that takes money from its current citizens and offers it to prospective Vermonters who would move there to work. The Editorial Board of The Wall Street Journal points out the major flaw in the program. With the state’s high personal tax rate of 8.95%, immigrants to the state will be essentially taking a high interest loan. They write:

Many Americans work remotely these days, free to consider state tax rates among other things in choosing where to live. The overtaxed state of Vermont thinks that’s a recruiting opportunity, and the state government is offering $10,000 grants to recruit workers willing to move to the Green Mountain State.

Governor Phil Scott last week signed the Remote Worker Grant Program law, which invites folks who work from their laptops for out-of-state employers to do so in Vermont. The program will dole out up to $500,000 over three years to cover moving and work-related expenses for those who sign up.

With Vermont’s high tax rates, the one-time subsidy is effectively a loan—with a punishing interest rate. Alongside a top marginal income personal rate of 8.95%, Vermont’s property taxes were third most onerous in the country in 2017, according to ATTOM Data Solutions. The burden will increase this year with the new $10,000 limit on the federal state-and-local tax deduction. In March Mr. Scott also announced a “Stay-to-Stay” initiative to convince some of Vermont’s 13 million annual tourists to stick around. Visitors were treated to networking events and job site visits, all on the taxpayer’s dime.

E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.

E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.