Vermont’s Governor wants to insulate 80,000 homes in the Green Mountain State and he wants the taxpayers to pay for it. Governor Peter Shumlin outlined his proposal in his State-Of-The-State address to the people of Vermont last month. He also explained how he hopes the state legislature will approve his plan of slapping a 10% tax on so-called break-open tickets to raise between six and 17 million dollars to pay for it.
At American Legion Post #19 in Bristol, Vermont Gov. Shumlin defended his plan, but it met with stern opposition by the local American Legion Post Commander. A reporter for the Addison Independent newspaper filed this report:
“..Shumlin said he supports the weatherization program, which he proposes to support with another controversial tax — a 10-percent surcharge on break-open tickets, which he believes will generate $6 million annually.
VT Governor Peter Shumlin (D)
“The proposed tax on break-open tickets has drawn sharp criticism from various civic clubs and veterans’ organizations that use proceeds from the sale of the tickets to assist various community causes.”
Break-open ticket come in various sizes, with varying degrees of money available to lucky winners. This is just one example of hundreds of different games.
In some states, substantial prizes are available. Of course, the odds of winning the top prize are quite low.
“Ron LaRose, commander of Bristol American Legion Post 19, displayed a box of 3,079 break-open tickets that he said cost the Legion $53, on which the organization paid a state sales tax of $3.18. He said the built-in profit on the box of tickets is $474 at sales of $1 per ticket. The Legion, he said, will make a net profit of $417.82 for charity.
LaRose said he believed the proposed surcharge would result in the state leaving the Legion with a net profit of only $109.82 for that box of break-open tickets, money used to help veterans, Boy Scouts, baseball and basketball teams, Bristol’s July 4 fireworks, scholarships, American flags and various charitable endeavors. (Editor’s Note: These numbers apply ONLY if every ticket in a given box is sold.)
“When you take the profit from us … all of those organizations are going to be without us,” LaRose said.
Shumlin disputed LaRose’s calculations, saying the impact of the surcharge will be on the producer/vendor of the break-open tickets. He said he suspects the vendors themselves are reaping a substantial profit that does not go to charity. He promised to have Vermont Department of Liquor Control Commissioner Mike Hogan speak with Legion officials about the plan.
“Our proposal in our view, will strengthen your ability to give money to nonprofits you are supporting and will give you a percentage of the take to help with the administration of this club and other clubs across the state,” Shumlin said. “What we are suggesting is that by joining Massachusetts and Connecticut in charging the seller or producer of the games a 10-percent tax, we will be able to fund some important programs and get (the Legion) a better share of administrative cost that you are currently absorbing.”
The governor’s stated plan, of course, is not how the proposal is worded, nor is it accurate. The plan calls for new fees to be placed on the ticket producers/vendors, but it calls for that 10% tax to be recouped at the point of sale, which – in the opinion of most organizations – is not only unworkable, but it could be the death knell for their entire fundraising efforts. It’s no secret that service organizations thrive on break-open tickets, but most agree that the tax itself, along with significant changes in the way sales are handled, will render them useless – all things considered.
Shumlin says that charities are losing money because some sellers don’t sell every single ticket from every box of tickets offered for sale. His proposal would require that to happen.
In Vermont, some ticket sellers already follow the governor’s suggestion, but most refuse to lie to their customers. If most of the big winners have “come off the top” of a given box, the seller will take the loss on that box and throw out the remaining tickets in favor of a new box.
From experience, sellers suggest that once the biggest winners have been sold from a box, no one is foolish enough to keep buying from that box. The ideal scenario would have at least one big winning ticket still in a box with only a handful of tickets left to sell. That happens, and when it does the organization realizes maximum profit.
Shumlin says his law will “fix” that problem. Sellers will not be allowed to cross off or announce how many winners have come out of a given box, so no one will know until the very last ticket is sold. If asked “what’s left to win” from a given box, the ticket seller is not to answer.
Again, the governor is wrong.
His proposal will only encourage sellers or their agents to quietly advise ticket players (friends?) as to how many big winning tickets are left and when they should or should not play them. Regular ticket players have reported this fact numerous times over the past several years and refuse to frequent the outlets that function in this fashion. For non-profit organizations such as the American Legion and VFW, the result would be financially devastating.
Oh, and one other thing….The 10% tax would be collected at the point of sale, requiring the payment of ten additional cents for every ticket sold. Currently, most tickets are sold for one dollar. Under the governor’s tax proposal, each ticket would cost $1.10 and all transactions would have to be recorded on a cash register tape to ensure that the charities these organizations support get every penny.
The governor is suggesting that non-profit Veterans organizations are cheating the charities they support and that suggestion didn’t set well with Dell Hill, Adjutant of American Legion Post #33 in Morrisville, Vermont. “Taxing non-profit Veterans organizations? Just how low can a government get?” Hill asked.
“Our American Legion Post sponsors events almost weekly to earn money that goes directly to our Veterans and their families, as well as dozens of other local charities, which help the needy and those adversely affected by natural disasters such as Hurricane Irene and Hurricane Sandy. We handed out over $22,000 of such help in 2012. While most break-open ticket players hope to win, they know they’re helping support all of our charitable work. For the state to step in and tax us only means fewer dollars will be available for those in need”.
Stay chipper, Mr. Hill. Two states currently tax Girl Scout cookie sales and others are considering doing the same.
What’s next? A tax on “Buddy Poppy” sales? (Don’t give them any ideas!)
They won’t stop spending and coming up with these moronic ideas – they think Big Government is the answer for every problem. Vermont is a good example of what will happen in the entire country. People who are comfortably nestled in the remaining red states will be in shock when the cancer spreads to their state.
Didn’t Dear Leader at one time suggest removing the charitable giving for non-profit?…I know in NC they have now removed the tax exempt status for religious vehicles. So, any church that has vehicles (bus, van, etc.) they use to pick people up, now have to pay registration taxes and if I’m not mistaken, the annual vehicle tax also..
This is a pretty good explanation of how it works, Sua Sponte.
http://www.ehow.com/how-does_4741386_charities-pay-employees.html
In the case of service organizations like The American Legion, Veterans of Foreign Wars, Disabled American Veterans, and their auxiliaries, the percentage of actual charity is much higher than 5%.
As an example; our American Legion Post pays Vermont’s Rooms and Meals tax for every meal served at our pot luck monthly meeting. One item of our meal is brought in by our members and shared by us all. Even so, we pay the State – based on the number of meals served – just as though we were a restaurant. It isn’t right to tax donated food, but it’s the law and we certainly don’t have the resources available to fight it in litigation.
We also pay all applicable taxes for our vehicle, which is used exclusively for American Legion business, such as transporting Veterans to the VA clinics/hospital, as well as transporting our flags and color guard gear to parades and other official events. We get no special discount for fuel, but do enjoy donated labor costs for maintenance and/or repairs, which almost always comes from professionals who are also American Legion members.
This latest move is nothing more than an income tax being assessed by a government that has run out of things to tax.
Reprehensible to say the least….A legitimate no for profit organization is just that and should not be hit with any state, local or federal taxes, especially those offering services such as the VFW and Legion..This reminds me of how the left push that the supposed 1% are the one going to fix our economical issues, much in the same that somehow the non-profit organization are supposedly rolling in the money and we need to levi taxes on them also..I’m also a firm believer that no active duty military personnel should have to pay any individual income tax. As it stands now, if you re-enlist and recieve a bonus, an average 40% is taken outright.
I belive the Beatles stated quite well…
If you drive a car – I’ll tax the street
If you try to sit – I’ll tax your seat
If you get too cold, cold – I’ll tax the heat
If you take a walk – I’ll tax your feet
The core issue has and always will be spending..I don’t have a degree in economics, but I do undertand if you don’t create more (and in government it’s always double and triple agencies doing the same thing for much more than the private sector, who would do it more efficently as they have a vested interest in profit) entitlements and agencies, then there won’t be the need for more revenue..Fairly simple concept, but we know that the politicians need votes and that is their foot in the door approach. I remember all the laughs Forbes got for the flat tax inititive. Now that I have a little snow on the roof it makes perfect sense. Imagine how downsized we could make government when people are taxed flatly (suggest 10%) on their income, that’s it. Once piece of paper. No mountains of regulations and rules. Albeit there may have to be in place specifics for business and such, but the individual should be cut and dry. Or even go the route suggested by George Schuyler:
States should (a) urge immediate repeal of the Federal income tax and finance government by a single levy upon the states, and urge that they handle all such things as social security, insurance and pensions, thus automatically reducing Federal personnel, expenses and authority.
They should (b) urge reduction of Federal “take” to customs and eliminate all the nuisance taxes on jewelry, amusements, travel, liquor, tobacco, etc., thus immediately reducing the cost of these items. … This would also reduce personnel and authority of Federal agencies.
Tax reform, as well as every other government program, will not see any substantial changes until we rid ourselves of the beltway leadership, we may not rid all of them, but a good majority would send a message.
With what?,40,000 pages in the federal tax code, which is overflowing with contradictions and “magic formula” loop holes, which allow companies such as Google to get a multi-million dollar refund, our system of taxation is a gross embarrassment, and certainly not fair.
My own financial consultant and tax preparer – a summa cum laude math major – gave up his lucrative business fifteen years ago because, as he so poiniently stated, “This Is Stupid!”.
As you wrote, nothing will change as long as special interest groups control, via re-election campaign funding, the votes of our president, senators and representatives.
You should write for us Sua! Great ideas.
Our president has reinforced the corrupt way of doing business in DC with his new pay-for-play program at Organizing for Action. He can be bought for $500,000.
I would like to do that one day..
Concerning corruption, I find it ironic that we look on other countries with disdain where greasing palms and the black market is part of daily life from politics to opening a store or building a house, skimming funds, all we have done in the U.S. is legalize it, so now it’s not wrong.