Wednesday, October 17, 2018

Low Income Floridians Pay 5X More In Taxes

LAKE MARY, FL - A new study released today by the Institute on Taxation and Economic Policy and Florida Policy Institute finds that the lowest-income Floridians — those earning less than $18,700 — pay five and a half times as much in taxes as a share of their household income than the state’s wealthiest residents, or those earning upwards of $548,700.
The study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, evaluates all major state and local taxes, including personal and corporate income taxes, property taxes and sales and other excise taxes.
ITEP points out that states like Florida with “low tax” reputations are, in fact, high tax states for low-income residents. Florida ranks 48th in the nation for state and local tax fairness, according to the analysis. The state has multiple regressive tax code features, including lack of a personal income tax — which helps to mitigate inequality — and a comparatively high reliance on sales taxes. 

Florida derives more than half of its tax revenue from sales and excise taxes, according to ITEP, which far exceeds the national average of 35 percent. These taxes cost the most for lower-income families, as these households spend a greater share of their incomes on purchasing the items and goods they need. As incomes increase, the share spent on everyday expenses decreases.
Florida’s upside-down tax system would be made worse, according to FPI, under Amendment 5. The measure would require a two-thirds vote of the state Legislature to raise state revenue, taxes and fees or eliminate tax breaks and loopholes, which would lock in current inequities.

Florida already ranks 50th for investments in public services.

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