Public policy decisions from the past continue to affect many Floridians' ability to thrive in the present, according to a new report released by the Florida Policy. The Florida Timeline shows how laws and policies from the past continue to affect Floridians' ability to thrive. WMFE's Talia Blake talked with Florida Policy Institute’s CEO Sadaf Knight about the timeline and what it can tell us about the history of tax inequality in the state.
Overview
The Florida Timeline is an ongoing initiative by the Florida Policy Institute and partners to "draw awareness to the systemic racism that has permeated historical laws in Florida and continues to reverberate in modern-day policy."
The policies that we see today did not come about by accident, according to CEO Sadaf Knight.
She said policies discussed and passed in current times are part of a history of policy debate in our state.
"And we're building on that history and we are a part of that legacy," said Knight. "And we need to understand that in order to build a brighter future in which economic opportunity is accessible by everyone in Florida."
So far in the initiative, two timelines have been released with one looking at tax policy in Florida.
Tax Policy
Florida is among less than 10 states in the country that does not have a personal income tax, which is a tax on your wages, salaries, investments, or other forms of income you earn.
Knight said that policy is an example of how we see echoes of the past in current debate.
In the 1924, lawmakers passed, and voters approved, a constitutional amendment to prohibit personal income and inheritance taxes.
Knight said the state wanted to attract wealthy residents to help spur development and growth in Florida.
"Fast forward to today, we still see that the focus of tax policy debates continues to be, who are we trying to attract, who can spur development, who can spur growth in Florida," she said "and it's often businesses and corporations."
No personal income tax results in the state heavily relying on the sales tax, according to Knight, which disproportionately impacts people moderate and low incomes.
"Because what we're taxing essentially is all those things you need to buy on a daily basis," she said, "The goods and services that you need just to kind of provide for your family and live your life."
Knight said people with low incomes are paying upwards of 13% of their personal income on sales taxes compared to just 3% of the highest income Floridians.
Compared to other states, Knight said Florida's tax system is one of the most inequitable in the country.
"We are, I believe, the 49th most inequitable tax system in the country," she said, "Which means that low income people pay far more in state and local taxes than wealthier residents of Florida."
Possible Solution
Similar to Florida, Washington State also has no personal income tax.
But what they do have that the Sunshine State doesn't is a Working Families Tax credit, which puts money back in the pockets of working individuals and families.
Knight said a state earned income tax credit like that could help fix the tax inequalities in Florida.
The Florida Policy Institute is calling the idea the Working Floridians Tax Rebate.
Knight said, "it would mirror the federal EITC, which is basically a rebate that working people would get back every year to help add a little more money back in their pockets and help bring some equity back into our tax system."
If Florida did have a working tax rebate, Knight said it would bring approximately $862 million each year into the state's economy.
She said the average tax rebate would likely be around $500 for working Floridians.
Knight adds that the rebate would be targeted to meet low and moderate income Floridians due to an income cap.
To learn more about the Florida Timeline, visit their website here.
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