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Enough is enough.
No, really. The lunacy must come to an end. The next time that I hear some idiotic, short-sighted Floridian bicker as if they're paying the tax burden of a resident of Connecticut or New Jersey, I'm going to absolutely lose my mind. It's usually some irritable retiree, one foot in the grave, who doesn't give a damn about public services in our state as long they have their precious gated community and beach. What is wrong with these people? Are they just unusually greedy, ignorant, or deranged, or perhaps all of the above? Given the general culture of Florida, the last option is likely the most probable!
In analyzing the truth about taxation in Florida, let's first of all establish three irrefutable, data-supported facts:
FACT #1: The composite state and local tax (SALT) burden in Florida is one of the lowest in the nation. Consistently throughout nearly all of the 20th Century, fewer than five states have had a lower composite SALT burden than Florida.
FACT #2: Florida's tax burden is, in fact, artificially low, and our state has for a very long time systematically underinvested in crucial elements such as education and healthcare. Florida does not need another indiscriminate Republican tax cut; if anything, we need higher taxation to enable us to finally begin to adequately invest in crucial items that we have long neglected.
FACT #3: Florida's tax system is one of the most regressive in the nation. The linchpin of our state's budget is a sales tax, and just about every reputable economist in the world acknowledges that sales taxes disproportionately impact the poor and middle class as opposed to the upper-middle class and the affluent.
It really is that simple, but let's briefly delve into some specifics.
#1: According to the nonprofit Tax Foundation (via data that you can access here), Florida's 2008 tax burden in terms of per capita SALT, standing at $3,441, was number 47 out of 50 in the nation. That means that only three other states in the entire nation pay a lower composite tax burden than us (those states are, in order, Wyoming, Nevada, and Alaska.) To put that number into perspective, residents in the highest tax state - New Jersey - pay an average of $6,610 in SALT, nearly twice as high as in Florida although the average New Jersey income is definitely not twice as high as Florida's. While the overall average US rate stood at 9.7% in 2008, Florida's rate was significantly lower at 7.4%. The real high tax states - places like California, New York, and New Jersey - pay over 10.5% of their income in state and local taxes. We can debate the merits of the fiscal policy of those states all day long, but what we cannot debate is the fact that Florida is not among the list of high tax states - we're not even remotely close to that group. Florida is a low tax state, and has unfortunately always been one; between 1977 and 2008, Florida has never ranked higher on the list than 44 out of 50. So no matter how much some Lee County-residing, shuffleboard-playing retiree may bicker and bicker about his or her taxes, the objective reality remains that they are not high by national standards.
#2. Florida's chronic and systematic underinvestment in public services is legendary. In a recent study our child healthcare system was ranked 50 out of 51 (50 states + DC); only Oklahoma ranked lower than us in this category. Unlike states such as California that literally showered their nascent and growing universities with money and have reaped in the benefits, Florida has long neglected and underfunded its university system; consequently, we have only one top 50 university in the entire state, the University of Florida, while California has nine such institutions (and 6 of those 9 are public universities, although had the state not placed such a high emphasis on research and human capital it is hard to imagine that Stanford, CalTech, and USC would have flourished as they have.) This low tax burden is part of a pernicious lie and vicious cycle that is perpetuated by Republican legislators in Florida - they claim that making our state "low cost" will entice high-earners with college degrees and businesspeople to move here, and yet the relatively low quality of our educational system - part of the reason behind our low-wage, service-driven economy - in fact does just the opposite, driving high-earning, high-human capital residents away from Florida. As far as our underinvestment in infrastructure such as roads and water facilities, just take a look at this damning, scathing report on our outstanding needs in those areas. The quality of Florida's PreK- 12 system is so notoriously bad that I don't even need to rehash that research here; I know several families who canceled their plans to move to the Sunshine State based entirely on the poor quality of our public schools.
#3. Not only is Florida's tax system more regressive than the national average, it is in fact the second most regressive in the entire nation. Right-wing Republicans like Marco Rubio - who wanted to completely nix property taxes and replace them with even higher sales taxes - want to make the system even more regressive, if that is even conceivable. It does not pay to be poor anywhere, but this is potently true in Florida, where those in lower income brackets shoulder a disproportionate percentage of taxes while being offered mediocre or nonexistent public services in relation to most other states. The biggest reason behind this is our heavy reliance upon the heavily regressive sales tax, while we also lack a progressive state income tax to force the wealthy to pay their fair share.
So to be clear, Florida does indeed have a "tax problem." However, Florida's tax problem has nothing to do with "high taxes." Florida is not a high tax state and has never been a high tax state. However, even as a social democrat and a staunch advocate of progressive taxation, I don't necessarily think that the solution to our problems is to simply jack up our taxes to the level of California or New Jersey (not even mentioning that Miami Beach will be covered in snow in July before that becomes a feasible reality.) Instead, we should reassess our entire fiscal structure as CFO Alex Sink has been (tentatively) doing during her tenure. We should develop a long-term plan to invest in our environment, our schools, our infrastructure, our hospitals, and our less fortunate citizens. Those have always been the things that attract high human capital residents to states, and those always will be items critical to maintaining a high standard of living in any given area. And we should fund this through higher or new taxes - preferably progressive ones - that restore some sanity to our fiscal house and hopefully move us out of the shameful place of being the nation's second most regressive state in terms of taxation. We cannot continue to pay for our future by importing 1,000 new residents per day and allowing them to pay damnably low taxes while cutting our state government far past the bone.
Hey, I can dream, can't I? But will logical politics, long-term oriented politics in Florida always remain just a dream?
No, really. The lunacy must come to an end. The next time that I hear some idiotic, short-sighted Floridian bicker as if they're paying the tax burden of a resident of Connecticut or New Jersey, I'm going to absolutely lose my mind. It's usually some irritable retiree, one foot in the grave, who doesn't give a damn about public services in our state as long they have their precious gated community and beach. What is wrong with these people? Are they just unusually greedy, ignorant, or deranged, or perhaps all of the above? Given the general culture of Florida, the last option is likely the most probable!
In analyzing the truth about taxation in Florida, let's first of all establish three irrefutable, data-supported facts:
FACT #1: The composite state and local tax (SALT) burden in Florida is one of the lowest in the nation. Consistently throughout nearly all of the 20th Century, fewer than five states have had a lower composite SALT burden than Florida.
FACT #2: Florida's tax burden is, in fact, artificially low, and our state has for a very long time systematically underinvested in crucial elements such as education and healthcare. Florida does not need another indiscriminate Republican tax cut; if anything, we need higher taxation to enable us to finally begin to adequately invest in crucial items that we have long neglected.
FACT #3: Florida's tax system is one of the most regressive in the nation. The linchpin of our state's budget is a sales tax, and just about every reputable economist in the world acknowledges that sales taxes disproportionately impact the poor and middle class as opposed to the upper-middle class and the affluent.
It really is that simple, but let's briefly delve into some specifics.
#1: According to the nonprofit Tax Foundation (via data that you can access here), Florida's 2008 tax burden in terms of per capita SALT, standing at $3,441, was number 47 out of 50 in the nation. That means that only three other states in the entire nation pay a lower composite tax burden than us (those states are, in order, Wyoming, Nevada, and Alaska.) To put that number into perspective, residents in the highest tax state - New Jersey - pay an average of $6,610 in SALT, nearly twice as high as in Florida although the average New Jersey income is definitely not twice as high as Florida's. While the overall average US rate stood at 9.7% in 2008, Florida's rate was significantly lower at 7.4%. The real high tax states - places like California, New York, and New Jersey - pay over 10.5% of their income in state and local taxes. We can debate the merits of the fiscal policy of those states all day long, but what we cannot debate is the fact that Florida is not among the list of high tax states - we're not even remotely close to that group. Florida is a low tax state, and has unfortunately always been one; between 1977 and 2008, Florida has never ranked higher on the list than 44 out of 50. So no matter how much some Lee County-residing, shuffleboard-playing retiree may bicker and bicker about his or her taxes, the objective reality remains that they are not high by national standards.
#2. Florida's chronic and systematic underinvestment in public services is legendary. In a recent study our child healthcare system was ranked 50 out of 51 (50 states + DC); only Oklahoma ranked lower than us in this category. Unlike states such as California that literally showered their nascent and growing universities with money and have reaped in the benefits, Florida has long neglected and underfunded its university system; consequently, we have only one top 50 university in the entire state, the University of Florida, while California has nine such institutions (and 6 of those 9 are public universities, although had the state not placed such a high emphasis on research and human capital it is hard to imagine that Stanford, CalTech, and USC would have flourished as they have.) This low tax burden is part of a pernicious lie and vicious cycle that is perpetuated by Republican legislators in Florida - they claim that making our state "low cost" will entice high-earners with college degrees and businesspeople to move here, and yet the relatively low quality of our educational system - part of the reason behind our low-wage, service-driven economy - in fact does just the opposite, driving high-earning, high-human capital residents away from Florida. As far as our underinvestment in infrastructure such as roads and water facilities, just take a look at this damning, scathing report on our outstanding needs in those areas. The quality of Florida's PreK- 12 system is so notoriously bad that I don't even need to rehash that research here; I know several families who canceled their plans to move to the Sunshine State based entirely on the poor quality of our public schools.
#3. Not only is Florida's tax system more regressive than the national average, it is in fact the second most regressive in the entire nation. Right-wing Republicans like Marco Rubio - who wanted to completely nix property taxes and replace them with even higher sales taxes - want to make the system even more regressive, if that is even conceivable. It does not pay to be poor anywhere, but this is potently true in Florida, where those in lower income brackets shoulder a disproportionate percentage of taxes while being offered mediocre or nonexistent public services in relation to most other states. The biggest reason behind this is our heavy reliance upon the heavily regressive sales tax, while we also lack a progressive state income tax to force the wealthy to pay their fair share.
So to be clear, Florida does indeed have a "tax problem." However, Florida's tax problem has nothing to do with "high taxes." Florida is not a high tax state and has never been a high tax state. However, even as a social democrat and a staunch advocate of progressive taxation, I don't necessarily think that the solution to our problems is to simply jack up our taxes to the level of California or New Jersey (not even mentioning that Miami Beach will be covered in snow in July before that becomes a feasible reality.) Instead, we should reassess our entire fiscal structure as CFO Alex Sink has been (tentatively) doing during her tenure. We should develop a long-term plan to invest in our environment, our schools, our infrastructure, our hospitals, and our less fortunate citizens. Those have always been the things that attract high human capital residents to states, and those always will be items critical to maintaining a high standard of living in any given area. And we should fund this through higher or new taxes - preferably progressive ones - that restore some sanity to our fiscal house and hopefully move us out of the shameful place of being the nation's second most regressive state in terms of taxation. We cannot continue to pay for our future by importing 1,000 new residents per day and allowing them to pay damnably low taxes while cutting our state government far past the bone.
Hey, I can dream, can't I? But will logical politics, long-term oriented politics in Florida always remain just a dream?
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