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Florida has a new and dubious distinction: The nation’s most unfair tax code. Gov. Ron DeSantis and some legislators aim to make it even worse.
After years of ranking second or third, Florida is now considered the absolute worst in terms of how much less a percentage of their incomes Donald Trump and other wealthy residents pay compared to those who don’t earn as much.
That’s the judgment of ITEP, the Institute on Taxation and Economic Policy, a nonpartisan, nonprofit think tank, in its seventh edition of “Who Pays,” which scrutinizes state and local taxes nationwide. Here’s a link: itep.org/whopays-7th-edition.
The less money you earn in Florida, the more of every dollar you pay in taxes.
That’s true of most states, but Florida stands out with the eight others that levy no personal income tax.
And that’s the one tax that’s off the table as far as DeSantis and his allies are concerned. They want to repeal the ad valorem — at value — taxes on real and personal property in favor of higher sales taxes. Those are the most regressive or unfair.
A better alternative
Here’s an alternative: Consider replacing property taxes levied for schools with a graduated statewide personal income tax. That would be much fairer. It would also alleviate the disparities in what’s spent per pupil depending on where they live.
Florida chronically ranks near the bottom in per-pupil spending, partly because some counties have strong property tax bases and others do not. In 2021, the Education Law Center said Florida’s high-poverty counties averaged 12% — or $1,492 — less per pupil than others.
What would make everything worse is SB 852, by Sen. Jonathan Martin, R-Fort Myers.
It calls for a study on how to replace local property taxes “through budget reductions, sales-based consumption taxes, and locally determined consumption taxes authorized by the Legislature.”
That’s talking about potentially $40 billion more in sales taxes, and doubling the statewide 6% rate (counties can already levy up to 7.5%).
The rich would get richer
Along with giving a gigantic windfall to Florida’s largest property owners, the prescribed outcome would also crush most of what’s left of the home rule that cities and counties were granted in the 1968 Constitution.
They would be on Tallahassee’s short leash. The big lobbies would cheer.
One of Florida’s greatest state senators, Louis de la Parte, a Democrat from Tampa, voted against the 1968 Constitution because it perpetuated the income tax ban, enacted in 1924 to attract new residents. In 1971, Gov. Reubin Askew persuaded the Legislature and voters to allow a tax on corporate income, and the Legislature has whittled away at it ever since.
Banning income taxes was the most fateful decision Florida ever made, apart from joining the slaveholders’ revolt in 1861. The prohibition was adopted by voters with 60,640 votes yes to 14,386 against.
Fewer people than live in Weston or Boca Raton today made a policy that poorly suits a population swelled to nearly 24 million.
A boon for developers
The lack of a personal income tax helped to make Florida a leader in population growth, and was a boon for real estate developers and their wealthier customers.
To repeal property taxes, which no state has done, would leave the rich in Florida paying virtually nothing, because sales taxes don’t impact them very much.
The ITEP study found that the top 1% presently pay only 1% of their income in sales and excise taxes and only 1.6% in real estate taxes.
All told, only 2.7 cents of the wealthiest Floridians’ dollars go to support state and local government. From the poorest one-fifth of Florida’s families, on the other hand, taxes take 13.2% of their earnings. That’s nearly five times what the richest pay. Every other income group is also taxed heavier than those at the top.
Real estate taxes on Trump’s Palm Beach properties were some $2 million last year, according to the Palm Beach Post. Mar-a-Lago alone was levied $703,000, although the president may have paid less if he paid early.
Bottom-feeding Florida
He would save it all if DeSantis’ scheme — which requires voter approval —ever comes to fruition.
The other states with no personal income tax are Alaska (which relies on oil revenue), Nevada (gambling), New Hampshire, South Dakota, Tennessee, Texas (oil), Washington and Wyoming. Previously, Washington was the most regressive, but recent reforms bumped it to second-worst in ITEP’s ranking, leaving Florida as the worst of the worst.
A personal income tax is often described as the “third rail” of Florida politics — touch it and you die.
After repeatedly saying it was inevitable, House Speaker-Designate Sam Bell lost his seat to a little-known challenger in 1988. There were other factors in that election, but the income tax issue is what people remember.
We hold no illusion that the present Legislature will ever fairly consider an income tax as an alternative to making a bad tax structure worse. But it is not too much to hope that some of its members will at least speak the truth about it, and about why SB 852 deserves to go in the wastebasket.
The Sun Sentinel Editorial Board consists of Opinion Editor Steve Bousquet, Deputy Opinion Editor Dan Sweeney, editorial writers Pat Beall and Martin Dyckman, and Executive Editor Gretchen Day-Bryant. To contact us, email at letters@sun-sentinel.com.
