FYIVT has received an intriguing proposal—one that challenges Vermont’s leaders to live up to their progressive ideals while solving a major funding crisis. Could this be the future of property taxation in the Green Mountain State?
For decades, Vermont has been at the forefront of progressive governance, championing policies designed to promote economic fairness and social equity. From universal healthcare discussions to environmental leadership, the state has long set an example for the rest of the nation. But now, as Vermont grapples with a severe school funding shortfall and struggles to stimulate growth in economically depressed communities, some are asking whether the state’s current property tax system is due for an overhaul.
FYIVT was recently sent a proposal that might just be the next great evolution in Vermont’s tax system. The core idea? A two-tiered, progressive property tax system that shifts more of the burden onto Vermont’s wealthiest regions—Chittenden and Washington counties—while relieving poorer communities to encourage investment and economic development.
Could such a plan be the perfect test of Vermont’s progressive values? If the home of progressivism—Chittenden County—truly believes in equitable taxation, then shouldn’t it be leading the charge on a fairer system?
The Problem: A Broken Property Tax System
Right now, Vermont’s property tax system is fundamentally flawed. While it is partially income-sensitive, property taxes are still disproportionately high in struggling rural counties while not truly progressive in Vermont’s wealthiest areas.
- Wealthier counties like Chittenden and Washington continue to grow, seeing high real estate appreciation, business expansion, and population retention.
- Meanwhile, poorer counties like Essex, Rutland, and Orleans struggle, with declining property values and limited investment.
- At the same time, Vermont faces major funding shortfalls for education and continues to search for ways to close budget gaps without crushing taxpayers.
Rather than raising taxes across the board, which would hit working-class Vermonters hardest, this proposal suggests a new approach—one that shifts tax burdens based on county-level economic prosperity.
The Solution: A Two-Tiered Progressive Property Tax System
The proposed system would divide Vermont’s counties into two tax brackets based on their economic strength.
1. Chittenden & Washington Counties (“Prosperity Tier”)
As the economic powerhouses of the state, these counties would carry more of the property tax burden to support statewide education and services.
- Property tax rates would range from 2.5% – 3.4%, scaling progressively based on home value.
- A land value tax (LVT) would be introduced on underutilized land, ensuring that speculators and developers contribute fairly.
- A phased-in luxury home tax would apply only to the portion of home value above $500,000, ensuring that high-value real estate pays a reasonable share.
- The total tax burden would be capped at 10% of income, preventing excessive taxation and ensuring fairness.
2. All Other Counties (“Revitalization Tier”)
Rural and economically struggling counties would receive targeted tax relief to stimulate growth and encourage new investment.
- Property tax rates would range from 0.9% – 2.7%, ensuring that residents aren’t overburdened.
- Tax incentives for homebuyers and businesses would encourage people to move to these areas.
- A phased-out property tax for long-term homeowners would allow Vermonters to build generational wealth without being taxed out of their properties.
- The same 10% income cap would apply, ensuring affordability for all Vermonters.
How This System Maintains Fairness
Rather than simply raising taxes on the wealthy, this proposal rebalances the tax burden in a way that reflects economic reality while ensuring Vermont’s education system remains fully funded.
Under the new system:
✔ Chittenden & Washington homeowners pay more, but within reason.
✔ Lower-income counties see tax relief, making homeownership and investment more attractive.
✔ Luxury home taxes phase in gradually, preventing economic shocks.
✔ No homeowner will ever pay more than 10% of their income in property taxes.
This keeps Vermont competitive while staying true to progressive values.
What Would This Mean for a $300K and $600K Home?
| Home Value | Prosperity Tier | Revitalization Tier | Current Statewide Property Tax (1.86%) |
|---|---|---|---|
| $300K Home | 2.5% – 3.0% (~$7,500) | 0.9% – 1.5% (~$2,700) | 1.86% (~$5,580) |
| $600K Home | 3.0% – 3.4% (~$18,000) | 1.8% – 2.7% (~$10,800) | 1.86% (~$11,160) |
As seen above, the tax burden on wealthy areas increases, while struggling regions see tax relief. However, no homeowner would ever pay more than 10% of their income in property taxes, protecting Vermonters from extreme hikes.
Will Vermont’s Progressive Leaders Step Up?
If progressive leaders in Montpelier and Burlington truly believe in tax fairness, then this proposal should be exactly what they want.
✔ It makes the wealthiest counties contribute more to fund education and public services.
✔ It provides economic relief for Vermont’s poorest communities, giving them a chance to grow.
✔ It ensures that land speculation and high-end real estate pay their fair share.
The question is—will Vermont’s progressive leaders in Chittenden County step up and embrace it? Will they champion a plan that finally makes Vermont’s wealthiest areas carry their fair share while investing in the state’s most struggling regions?
This proposal isn’t just about taxation—it’s about economic justice and ensuring that all of Vermont prospers, not just the wealthiest regions. If our elected officials truly believe in their rhetoric, then now is the time to act.
FYIVT has been sent this plan to share with the people of Vermont. Is it time for the state’s leadership to finally take the next step in progressive taxation? We’ll let the voters—and their legislators—decide.
What do you think?
- Is this a good idea, or should Vermont’s property tax system stay the same?
- Would your legislator be interested in hearing about this?
- Should Vermont take the next step in progressive taxation, or is this a step too far?
Feel free to share this with others and start the conversation!
Dave Soulia | FYIVT
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