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Vermont income taxes: in the middle of the pack

Another common method of state tax comparison is to look at all taxes collected within a state-taxes paid by residents as well as those paid by businesses and non-residents. The U.S. Census used to publish annual reports calculating state taxes or state and local taxes on a per capita basis. However, the census stopped issuing those reports, explaining that they presented a distorted picture for states, such as tourist states, that collect a lot of revenue from non-residents.

An annual report published by the District of Columbia and two studies done by the Vermont Legislature's Joint Fiscal Office compare the taxes typical Vermonters pay with taxpayers in other states. The D.C. study compares the amounts paid by taxpayers in the largest city in each state. According to latest D.C. study, Vermont-as represented by typical Burlington families-falls in the middle when it comes to taxes paid as a percentage of income.

The legislature made modest tax changes in the last two years, a blue ribbon commission is studying the state's tax structure, and taxes are likely to come up again in next year's budget discussions. The state income tax is the largest source of state General Fund revenue. The tax generated $622.3 million in fiscal 2008, which was 52 percent of all General Fund receipts.

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