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Reliance on property, sales taxes holds Florida back in new tax fairness report

in Statewide/Top Headlines by

A new report released Monday by online financial services firm WalletHub says Florida ranks near the bottom nationally when it comes to the fairness of its state and local taxes.

The survey evaluated the taxes levied by all 50 states – broken down by income, property, sales & excise and “other” taxes – and how they are levied on people of varying income brackets and compared that to the ideal system of taxation, gathered by asking respondents the question, “In thinking about the fairest possible tax system, what percentage of income do you think households at each income level should pay in state and local taxes?”

The analysis showed Florida’s tax regime to be considerably less fair than average among states, ranking Florida No. 45 out of 50.

Florida made both the top 10 for the  state where the very wealthiest are under-taxed compared to respondents’ ideal rates and the top 10 state where the working-class and poor people are taxed too heavily, as illustrated below.


States with Most & Least Fair Tax Systems Artwork 2015

Source: WalletHub

The state gained bad marks for its high sales and excise taxes, which are generally deemed regressive by taxation experts.

Florida was 44th most reliant on such taxes for state revenue, and 43rd most reliant on property taxes.

The latter is shaping up as an ongoing issue in the state education budget, with multiple senators with education administration backgrounds vowing to stop any proposal that leans too heavily on local funding from property taxes.

The survey indicated the Sunshine State soaks its homeowners more than all but six other states.

Its No. 45 ranking puts the state at slightly more fair than the states of Illinois, Arkansas and neighboring Georgia, which came in at No. 49, and slightly less fair than Indiana, Texas and Mississippi.

Montana took top honors overall, according to the report, being docked only for relatively high sales taxes in the state. Oregon, South Carolina, Delaware and Idaho rounded out the top five, though their paths to the top diverged significantly.

Delaware and Oregon, for instance, have low or no state income tax whereas Montana and South Carolina’s fairness rating was buoyed by low property taxes.

Florida is one of seven states with no state income tax.

The non-scientific survey used results from an online poll of 1,050 U.S. residents.

Ryan Ray writes about campaigns and public policy in Tampa Bay and across the state. A contributor to FloridaPolitics.com and before that, The Florida Squeeze, he covers the Legislature as a member of the Florida Capitol Press Corps and has worked as a staffer on several campaigns. He can be reached at [email protected]

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