Why Sales Taxes Are Regressive
Republicans love floating the sales tax idea. The problem is the tax is more regressive. The poor in Florida are going to get pinched hard with this tax every time they shop for groceries.
Cities, counties and other governments are expected to collect a little more than $30 billion in combined property taxes this year. A penny increase in the state sales tax would generate about $3.8 billion a year.
Florida is behind in meeting the class-size demands. Under Jeb Bush, Kidcare was cut. Many poor families depend on the service as the only means to provide their children with medical attention.
The current sales tax is 6 percent. Florida expects to currently make $30 billion in property tax revenue. That is subject to change with pending legislation. According to the article, the sales tax raises $3.8 billion a penny. If the sales tax goes up to 13.5 percent that would be an extra revunue roughly to $24.7 billion. That doesn't make up for the lost in property taxes.
Sales taxes are rather unstable. Florida went into a deficit after 9/11. A severe hurricane season would hurt tourism. These are the same conservatives who argue that tax cuts create surpluses. The Institute On Taxation and Economic Policy lists Florida's tax system as the second most regressive in the country.
Florida’s Tax Code: Soak the Poor and Middle Class, Spare the Wealthy
When all Florida taxes are totaled up, the study found that:
# The state and local tax rate on the best off one percent of Florida families—with average incomes of $946,000—is 3.0% before accounting for the tax savings from federal itemized deductions. After the federal offset, the effective tax rate is a mere 2.7%.
# The average tax rate on families in the middle of the income distribution—those earning between $24,000 and $38,000—is 9.9%. After a trivial federal offset, the rate is 9.8%, three times the effective rate on the richest Floridians.
# But the tax rate on the poorest Florida families—those earning less than $15,000—is the highest of all. At a whopping 14.4% it is more than five times the effective rate on the wealthiest Florida families.
The study found that Florida’s taxes are particularly regressive because the state lacks abroad based income tax and instead relies primarily on an extremely high sales tax to fund public services.
I love how Peer Review cheers this dumb idea on without going through the numbers. My favorite post is Jim Johnson saying tax cuts should be used to back sports franchisesbecause of this economic impact.
John Gruden, Vinny Lecavalier, Mike Alstott - they all have to fill up their gas tanks, have their suits dry cleaned, shop and eat, etc.
That is the lame beyond words. If Johnson believes that Tampa's economy relies on Mike Alstott getting his suit cleaned than he is an economic illiterate.
Conservatives support tax hikes to build sports arenas and sales taxes that will pitch the majority of Floridians. Fiscal conservative my ass. Florida is in the current property tax nightname from state tax cuts that force counties to increase property taxes. That is where the debate should start.