One goes up, another comes down
Florida has one of the nation’s most regressive tax systems with low-income families paying nearly five times as much as the wealthy, according to a report by the Institute on Taxation and Economic Policy.
A regressive tax means people who make less pay a higher percentage of their income in taxes when compared to high-income groups.
“The more money one makes, the less tax they pay,” said Anca Voicu, professor of economics and head of Rollins College’s Women in Finance Program.
She adds that could influence how you view the state.
“For some high income households, Florida looks like a low tax state. For others, such as very low income families. Florida is a very high tax state.”
ITEP reports that Florida’s regressive tax system is largely a result of the state not levying a personal income tax.
Potential long term effects
ITEP concludes that, “These systems worsen income inequality by making incomes more unequal after collecting state and local taxes.”
Voicu is concerned about the long term implications for low income families in Florida, if the current tax system isn’t fixed.
“Where would they go? Most states in the United States levy a state individual income tax. We don't have that here, and even without that, they are still being priced out of certain areas.”
The report by ITEP shows that these unequal systems can further worsen income inequality.
Can it be fixed?
It’s in the hands of the Florida Legislature, according to Voicu.
“Every effort should be made by our legislature to correct this to build more fairness into our tax code.”
Legislation (HB 1570/SB 1601) filed in the state capitol seeks to create a Working Floridians Tax Rebate, a state level Earned Income Tax Credit program for workers and families.
If passed, the Rebate would put an estimated $1 billion into Floridians pockets, with about $500 dollars to each household.
The bill was originally introduced in the 2022 Legislative session, but has yet to gain traction.
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