Ive long puzzled over what I have thought to be the weak link in my Vermont trust-funder economy thesisthe assumption that in order for a state such as Vermont to conduct itself as if all its citizens are above-average (a little Lake Woebegone lingo, there) in terms of income, its voters must necessarily be just that: above-average in income. As all the stats show, theyre not. A ranking of states in terms of median family income (this one comes from The Taxpayers Networks 2005 report) shows Vermont at $57,170, ranking 19th among 51 and barely above the US average of $55,832. It also shows personal income at twenty sixth with $32,731., below the U.S. average of $34,495, and Disposable Income at 28th with $29,206., below the US average of $30,441. How can such (relatively) not-so-well-off folks be such enthusiastic voters/spenders for bigger and better (they think) government? One clue came to me 40 years ago, when I encountered a wealthy senior citizen who proudly informed us that while he was drawing a modest pension from his earlier life as a CEO, most of his substantial income came from tax-exempt Vermont bonds and therefore wasnt included in normal reportable/taxable income, either active earned or passive unearned. His name was Dean Davis; in 1968 he was in Sudbury campaigning for the governorship. Thirty-nine years later, I realized that maybe a lot of Vermonts present-day secret upper-income quintile folks may be following the example of that long-agoughRepublican living quite comfortably while posting a seeming income level quite a bit below that level. Another clue came to me one year ago when I was reading in the Wall Street Journal some stats on the greatest intergenerational asset transfer in American history as first Depression Babies and then Baby-Boomers have been gifting their nest-eggs to their (frequently) trust-funder offspring. It seemed to me then that a seemingly impoverished Brooklyn kid moved to Vermonts Northeast Kingdom to live off the retail sale of personally-grown green beans, might actually be sustained in major purchases of house or car or health insurance or college-for-the-kids by care packages of money from the folks, rather than by his own barely-above-poverty level earnings. Or, lacking that familial backup, he could very profitably go into politics as one of Vermonts present Senators did. We know that the passive-income category has grown in Vermont by hundreds of percent in the last decade or so (Ive reported the actual stats in earlier columns) in sharp contrast to the after-inflation stagnation in non-farm earned income or the before-inflation stagnation (and therefore a one-third decline in purchasing power) in farm income over recent years, but now I hunch that a lot of recent in-migrants, those who now present such a demographic presence that they control Green Mountain politics and governance, are also the recipients of a lot of that intergenerational wealth transfer which doesnt show up in the official median-family-income statistics. By the book, these folks seem to be of modest income indeed, but by their spending habits, life-style, and support for expansive (and expensive) government they suggest quite a different real-wealth level indeed. If my hunch is correct, it would well explain how an electorate of seemingly relatively modest income could enjoy such unaffordable housing as they typically enjoy, and, also, could spend their days politicking to shut down Vermont Yankee or Free Tibet, for example, while their Vermont-native neighbors, now in a probably permanent voting minority, are out there in W-2 or Schedule C land, working full-time for a truly modest living. We already know that Vermont has the second highest percentage of second homes in the country, the National Association of Realtors says. Maybe now we should ask the rhetorical question Were these alternate domains, McMansion-size or not, built or bought with ordinary active income earned and taxed and reported in Vermont? The probable answer is, probably not.