Taxes Matter XX

Taxes Matter XX

November 17, 2010 Posted by J. Scott Moody - No Comments

Dr. Art Woolf over at Vermont Tiger has announced that he has updated his excellent study examining how the sales tax in Vermont has lead to Vermonters cross-border shopping in sales-tax free New Hampshire.  You can read the full study here (pdf) but below is the money-line:

If Vermont’s border counties [with New Hampshire] had maintained their relative retail sales level, retail sales would be $540 million higher with 3,000 more retail sector jobs in the region.

Vermont has enacted policies that have devastated the towns and cities along the Connecticut River.  To try to help those communities, over the past decade the state has enacted laws and regulations and committed substantial resources to try to revitalize downtowns.  Ironically, the major causes of this decline were state policies enacted decades ago.

The retail sales gap between the two border regions has grown wider each time Vermont increased the sales tax and, as state budgets now depend on those revenues, it will be hard to reverse the negative effects of these policies.

Maine’s policymakers should read and re-read this study.  Stay tuned for similar analysis on the Maine-New Hampshire border from yours truly . . .