Bill H.77 proposes the establishment of a new marginal income tax bracket in Vermont, aimed at generating additional revenue for education and transportation. The bill amends existing tax brackets for individuals, estates, and trusts, increasing the income thresholds for various tax rates. For example, the taxable income threshold for married individuals filing jointly is raised from $64,600 to $79,950, with corresponding adjustments to the tax amounts and rates for higher income levels. Similar adjustments are made for heads of households, unmarried individuals, and married individuals filing separately, with new income thresholds and tax rates introduced for higher earners.

Additionally, the bill stipulates that revenue generated from the highest marginal tax rates will be allocated to specific funds: 2% to the Education Fund, 1% to the Transportation Fund, and 1% to the Vermont Higher Education Endowment Trust Fund. The bill also includes provisions for the annual inflation adjustment of taxable income thresholds starting in 2025. It is set to take effect retroactively on January 1, 2025, applying to taxable years from that date forward.

Statutes affected:
As Introduced: 32-5822, 32-435, 16-4025, 19-11