Rights & Democracy Vermont is telling members that “election season is officially here,” and one of the issues being carried into that election season is a tax proposal that died in committee when the 2026 legislative session ended.
In a recent member update, RAD-VT said it is a member of the Tax the Rich Vermont Coalition, which is hosting a campaign training and canvassing event on Sunday, June 28, from 9:30 a.m. to 2 p.m. at the Old Labor Hall in Barre.
The event is part of a broader political push around the PROSPER Act, known at the State House as H.794. The proposal was introduced during the 2026 session as “An act relating to increasing taxes on higher income earners and creating the School Construction Aid Special Fund.”
The bill did not pass. It did not receive a House vote. It did not advance out of House Ways and Means. The Legislature adjourned, leaving H.794 dead for the 2025–2026 biennium.
But the campaign around it is not dead.
What H.794 Would Have Done
H.794’s short title was the “Preserving Revenue for State Programs and Economic Resiliency Act,” or PROSPER Act.
The proposal had three main tax components.
First, it would have created a new personal income tax surcharge on Vermonters with federal adjusted gross income above $250,000. The surcharge would have applied at 2% on income above that amount.
Second, it would have imposed an additional 6% surcharge on income above $500,000.
Third, it would have created a “wealth proceeds tax” on certain investment income for individuals, estates, and trusts above specified taxable-income thresholds.
The bill also included a property-tax component. It would have created a new “nonhomestead residential” property class and taxed that class differently from homestead property.
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Joint Filers Would Not Get a Higher Threshold
One of the most important details is how the bill treated filing status.
H.794’s income surcharge did not create a separate, higher threshold for married couples filing jointly. The bill applied the surcharge “without regard to filing status.”
That means the same $250,000 AGI trigger would have applied to a single filer and to a married couple filing jointly.
A single filer earning $250,000 and a married couple jointly earning $250,000 would have reached the same starting line for the new surcharge. Under H.794, two spouses earning $125,000 each could be treated the same as one person earning $250,000 for purposes of the surcharge threshold.
That is a major detail in a state where many households reach higher income levels through two earners, not inherited wealth or investment empires.
“Rich” Means a Tax Return, Not a Vault of Gold
Tax the Rich Vermont presents the proposal as a tax on the “richest 5%” of Vermonters. But H.794 did not create a net-worth test, an assets test, or a billionaire tax.
The bill’s first trigger was a tax-return line: more than $250,000 in federal adjusted gross income.
That distinction matters.
A taxpayer can cross $250,000 in AGI because they are genuinely wealthy. But they can also cross it because two spouses both work professional jobs, because a small business reports pass-through income, because a contractor has a strong year, because a farmer sells land or equipment, because a Vermonter sells a rental property, or because someone cashes out investments to retire, pay debt, settle an estate, or move.
In those cases, the income may be real, but it is not necessarily recurring. It may also be tied up in business costs, debt, taxes, payroll, land, equipment, or a one-time transaction.
That is the gap between the campaign phrase and the bill language. “Richest 5%” sounds like accumulated wealth. H.794’s first surcharge would have applied to adjusted gross income above $250,000, regardless of filing status.
How Many Vermonters Could Be Hit?
The coalition describes the proposal as applying to the “richest 5%” of Vermonters. The available tax-return data suggests that is roughly the right order of magnitude for the income-surcharge portion of the bill, but not for the bill as a whole.
According to the 2026 Vermont Joint Fiscal Office Fiscal Facts report, Vermont had 329,778 resident income tax returns in 2024.
Of those, 7,561 returns reported federal AGI between $300,000 and $499,999. Another 3,126 returns reported AGI between $500,000 and $999,999. Another 1,325 reported AGI of $1 million or more.
That means 12,012 Vermont resident returns were definitely above $300,000.
The harder question is how many of the 14,736 returns in the $200,000 to $299,999 bracket were above H.794’s $250,000 trigger. JFO does not split that bracket at $250,000.
A reasonable estimate puts the number affected by the first income surcharge somewhere around 16,000 to 18,000 Vermont resident returns. At the low end, that is just under 5% of resident returns. At the high end, it is above 5%.
But that estimate applies only to the income-tax surcharge. It does not include Vermonters who could be affected by the bill’s wealth-proceeds tax or its new nonhomestead residential property-tax classification.
In other words, “richest 5%” is a rounded campaign phrase for one part of the bill. H.794’s full tax structure reached beyond high-AGI income-tax returns.
The Threshold Is Far Above Typical Vermont Income
The $250,000 trigger is well above typical Vermont income measures.
JFO’s 2024 resident income tax data shows average AGI of roughly $93,000 per return. The median Vermont tax return falls in the $50,000 to $59,999 AGI bracket, and the largest single AGI bracket is $75,000 to $99,999.
That means H.794’s first surcharge would have started far above the average return, the median return, and the most common income bracket.
It also means the proposal was not aimed at typical wage earners. But it was broad enough to reach more than just the ultra-wealthy. The target group could include high-income households, two-earner professional households, business owners, and Vermonters with one-time income events.
What the Tax Would Cost
The proposed surcharge would not replace existing taxes. It would be added on top of them.
The surcharge would not apply to the first $250,000 of federal adjusted gross income. It would apply only to income above that amount.
At $300,000 in AGI, a filer would owe an additional $1,000 under H.794: 2% of the $50,000 above the threshold.
At $500,000 in AGI, the surcharge would add $5,000.
At $750,000 in AGI, it would add $20,000: $5,000 from the 2% surcharge on income between $250,000 and $500,000, plus $15,000 from the additional 6% surcharge above $500,000.
At $1 million in AGI, it would add $35,000 in new surcharge liability, before considering any additional exposure from the bill’s wealth-proceeds tax or property-tax provisions.
For income above $500,000, the proposal would effectively add 8 percentage points of state surcharge to the next dollar of federal AGI.
Those figures are incremental. They are not the taxpayer’s total tax bill.
For a single Vermont filer with $300,000 in wage income, combined federal income tax, Vermont income tax, and employee payroll taxes can already approach $100,000 under standard assumptions. H.794 would add another $1,000 at that income level, with larger surcharges at higher incomes.
Campaign Continues After Bill Dies
H.794 is dead for this biennium. The campaign behind it is not.
RAD-VT’s newsletter places the Tax the Rich Vermont campaign training alongside candidate forums, candidate endorsements, and advice for members on how to approach legislative issues with 2026 candidates.
The June 28 event in Barre is scheduled after the legislative session ended and after the filing deadline for the August 11 primary elections. That timing makes the purpose clear: the coalition is not lobbying an active bill. It is organizing for the next election cycle and the next legislative session.
For Vermonters who want to hear the pitch directly, the Tax the Rich Vermont Coalition campaign training and canvassing event is scheduled for Sunday, June 28, from 9:30 a.m. to 2 p.m. at the Old Labor Hall in Barre.
That is where the campaign to revive a dead tax bill appears to be headed next.
Dave Soulia | FYIVT
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