Different Fates for Tax-Hiking Paid Family Leave in Maine, Vermont

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Posted by Steven Selleck on Friday, June 21st, 2019, 2:39 PM PERMALINK

The Vermont legislature wrapped up its 2019 session last month without giving final approval to House Bill 107, legislation that called for 12 weeks of state-mandate paid-leave after childbirth for all Vermont workers, men and women alike. Under HB 107, workers would be compensated for 90% of their wages until $27,000 of their salary, and 55% of their higher earnings.

The bill also mandated the same benefit for paid family leave to take care of a sick relative for up to 6 weeks. A 0.2% payroll tax would be used to fund the proposal, as if taxes in Vermont aren’t high enough (Vermont currently has some of the highest income taxes in the country, according to Tax Foundation, with the 6th highest tax collections per capita of any state).

In an article for Seven Days, Vermont Senator Randy Brock (R) objected to the tax, saying, “This is a plan that thousands of people don’t want and can’t use, and it’s being forced down their throats". Brock also notes that there are many hard-working Vertmonters who are planning on having children or have a sick relative at home.

Another point made by Brock in a VPR article is that Vermont lawmakers may seek higher pay rates for off-duty workers in the future, possibly up to 100% of their wages. This will further burden the taxpayers of the Green Mountain State, where only a small percentage of the workforce will ever use paid leave.

Vermont is not the only state in New England to consider a paid leave mandate bill this year. Maine Gov. Janet Mills signed a similar bill on Tuesday, May 28th. The new Maine law calls for up to 40 hours annually of paid leave. Maine workers will be paid their full wages for the hours taken off. Predictably, funding comes from a tax hike of 0.77 percent of payroll taxes.

An article from The Maine Heritage Policy Center explained that the proposal would be particularly harmful to low-income workers in Maine. According to the think tank, individuals earning $25,000 annually will pay $100 each year for the new tax. This tax hike will reduce consumption for the low-income residents, who spend a higher amount of income on consumption than high-income residents.

Maine joins Washington, DC, and five other states in the progressive efforts to tax all workers for the benefit of very few.

Photo Credit: Jennifer/Flickr

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