Vermont

Vermont Treats Poor Families Under Its Income Tax Better Than Most States

 

Vermont’s 1999 income tax threshold — the income level at which families begin paying income tax:	Ranking among 42 states with income taxes
For two-parent families of four: $25,400.	4th highest (tie)
For single-parent families of three: $23,900.	4th highest (tie)
Vermont’s 1999 income tax for working-poor and near-poor families:
For families of four with poverty-line incomes ($17,028): $713 refund.	2nd lowest
For families of three with poverty-line incomes ($13,290): $910 refund.	Lowest
For families of three or four with minimum-wage earnings ($11,180): $954 refund.	Lowest
For families of four with incomes at 125% of the poverty line ($21,285): $374 refund.	2nd lowest
For families of three with incomes at 125% of the poverty line ($16,613): $660 refund.	2nd lowest
Vermont has consistently exempted families with below-poverty earnings from the income tax. As Vermont’s tax threshold for families of four has increased during the 1990s, the threshold has risen further above the poverty line. (See chart.) In 1991, a family of four did not owe tax until its income reached 25 percent above the poverty line. Vermont’s tax threshold now has risen to 49 percent above the poverty line.