Myth vs. Truth
Myth:
Increasing the state sales tax by 2.5 cents to 8.5 cents will make Florida the highest sales tax state in the nation.
Truth:
Comparing only sales taxes doesn't provide a full picture of the tax burden.
Under the proposed Constitutional Amendment, Florida would be the first and only state in the nation to have NO income tax and NO property tax on homestead homes.
The chart below compares Florida taxes under the proposed Constitutional Amendment to other states.
State Property Tax Sales Tax Personal Income Tax State Max. Tax Total
Rhode Island Yes 7% 3.75% - 9.9% 16.9% plus property taxes
California Yes 7.25% 1% - 9.3% 16.55% plus property taxes
New Jersey Yes 7% 1.4% - 8.97% 15.97% plus property taxes
Vermont Yes 6% 3.6% - 9.5% 15.5% plus property taxes
Michigan Yes 6% 3% - 9% 15% plus property taxes
Minnesota Yes 6.5% 5.35% - 7.85% 14.35% plus property taxes
South Carolina Yes 6% 2.5% - 7% 13% plus property taxes
Arkansas Yes 6% 1% - 7% 13% plus property taxes
Mississippi Yes 7% 3% - 5% 12% plus property taxes
Indiana Yes 6% 3.4% 9.40% plus property taxes
Florida NONE 8.5% NONE 8.5%
-------------------------------------------------- ------------------------------
Myth:
The proposal hurts the poorest Floridians because the sales tax is regressive. They will not be able to afford to live with an increase in sales tax.
Truth:
The plan protects poorer Floridians by maintaining current sales tax exemptions. Floridians do not pay sales tax on basic needs such as food, rent, prescription drugs, transit costs and eyeglasses. The plan doesn't change that.
Additionally, eliminating the property taxes provides much needed relief to low-income and fixed-income Florida homeowners. It may also allow many Floridians who rent to finally afford a home.
-------------------------------------------------- ------------------------------
Myth:
Increases in the sales tax will hurt small businesses because people will buy less.
Truth:
Under the Constitutional Amendment, small business owners will have a direct benefit to their bottom line from the rollback in tax rates for commercial properties.
By not having to pay property taxes, Floridians will have more money to spend or invest back into our economy. The average Floridian will have $2300 more disposable income under the plan.
The plan will return nearly $6 billion to all Floridians statewide – which means $6 billion that can be spent on Florida goods and services. Small business owners will benefit with this infusion of purchasing power in the state.
-------------------------------------------------- ------------------------------
Myth:
The sales tax/property tax swap will hurt Florida's tourism industry. A high sales tax will drive away our visitors.
Truth:
Tourists do not typically plan a vacation based on the taxes of their vacation destination. If they did, places such as New York City (8.38% sales tax), Los Angeles (8.25% sales tax), or Las Vegas (7.75% sales tax) would not top the list of vacation spots.
Florida will continue to be a leading vacation destination because of what we offer: white sand beaches, wonderful weather, incredible family vacation resorts, and dynamic sites and attractions.
-------------------------------------------------- ------------------------------
Myth:
Floridians get to deduct property taxes on their federal income tax. It's not worth it to lose this tax benefit.
Truth:
It's not a wise policy to keep taxes high in order to gain a future, smaller, federal tax benefit.
Congress has allowed citizens in states with no income tax, such as Florida, to claim a sales tax deduction on personal income tax. Florida's congressional delegation needs to work to maintain this valuable deduction.
-------------------------------------------------- ------------------------------
Myth:
Renters will be hurt because they don't pay property taxes.
Truth:
Renters will benefit under the tax relief plan. Property taxes are passed onto the renter in their rent payments. Lower taxes and lower tax rates on apartment buildings and other businesses will reduce rents and keep rental housing affordable.
Home ownership may now also be in reach to many renters who previously could not afford a home. Many families qualify for a mortgage, but they cannot afford the property tax burden on top of it. This plan will expand the American Dream of home ownership to many renters who never thought it would be possible.
-------------------------------------------------- ------------------------------
Myth:
County governments rely on property taxes. Under this amendment, counties will be forced to cut necessary services, such as law enforcement and water and sewer services.
Truth:
When the average Floridian faces a tight budget, they cut back on luxury items first. Local governments should do the same. Instead, they scare citizens with threats that tax cuts will force cuts in necessities like law enforcement and infrastructure.
Government should not grow beyond people's ability to pay for it. Yet, that is exactly what has happened during the last few years. County and municipal governments have grown 99 percent in the last six years while personal income grew by an average of 44 percent. While property values were soaring, local government coffers grew exponentially.
Government should work to support Floridians, not Floridians working to support government. Under the plan, local governments would have to tighten their belts. However, if there is a compelling need, they will still have the ability to override the tax cap with a unanimous vote of the local governing board.
This means that local governments will be able to grow – they will just have to be transparent about that growth. They won't be able to hide huge budget increases through normal growth in property values.
Experience shows that when more money is in the pockets of the people and not the government, Florida's economy grows stronger – which in turn provides necessary revenue to sustain local government.
| http://www.floridahomesteadservices.com |
