Florida is the third largest state in the country, and according to a new report, has the third-most unfair state and local tax system in the U.S. That data comes from the Institute on Taxation and Economic Policy (ITEP), a nonpartisan, nonprofit tax policy organization.
Florida is one of nine states in the country without a state income tax, which has given it the image of being a low-tax state. But the authors of the report say that such a tax system exacerbates inequality, and that the state relies too much on sales tax to fund general revenues.
Sales taxes are known as “regressive” because they impose a greater tax burden on the poor. Florida derives more than half of its tax revenue from sales and so-called “excise” taxes (mostly levied on gasoline, alcohol and cigarettes), according to ITEP, which “far exceeds the national average of 35 percent.”
According to the report, only Washington and Texas have more regressive tax systems than Florida. California was ranked as the least regressive tax system in the U.S.
“Rising income inequality is unconscionable, and it is certainly a problem that local, state and federal lawmakers should address,” says Meg Wiehle, deputy director of ITEP and an author of the report. “Regressive state tax systems didn’t cause the growing income divide, but they certainly exacerbate the system.”
The Florida Policy Institute seized on the report as another reason why Floridians should oppose Amendment 5 on the ballot next month. That’s the measure that would make it harder for Florida to make any changes to its tax system. Amendment 5 would require that state legislators approve any tax hike by a two-thirds majority, rather than the simple majority required now. Amendment 5 would also require a two-thirds majority if the Legislature wanted to eliminate tax breaks or special-interest loopholes.
“It comes as no surprise that Florida ranks so poorly in terms of tax fairness, as our state relies heavily on sales and excise taxes while state leadership allows special interest tax breaks to remain unfettered in the tax code,” said Sadaf Knight, interim co-executive director of the Florida Policy Institute. “Florida clearly has a long way to go in ensuring that everyone is paying their fair share.”
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