We, as individual citizens, do not have the option of telling the state: "No, thanks, I don't feel like paying any state taxes this time."
We're taxed by the state at the cash register. We're taxed at the gas pump. We're taxed for our sins, alcohol and tobacco.
There's no escaping state taxes.
Unless, of course, you're a business.
If you're a business in Florida, you have an excellent chance of escaping at least one state tax: Florida's corporate income tax.
St. Petersburg Times reporter Sydney P. Freedberg is writing an excellent series of articles on Florida's corporate income tax. The tax is so riddled with loopholes and exceptions that only a tiny handful of businesses pay anything.
In fact, just more than 5,000 of the 1.5-million businesses in Florida pay 98 percent of what gets collected. Most of the rest aren't even required to file tax returns.
Let's think about who has to bear the tax burden instead. It's been more than 30 years since Florida's corporate income tax generated a smaller share of the state's total revenue.
The total amount of exemptions, credits, deductions and loopholes in the tax costs the state $1.2-billion a year. That's more than the tax takes in, which is just less than $1-billion.
You know what all that means?
It means that somebody else has to pick up the burden. Florida already relies too much on its retail sales tax. Florida's taxes are "regressive." The less money you make, the bigger percentage of it you pay in taxes.
Yet the corporate income tax has many critics. Let's deal with them.
Interestingly, the subject generates some of the angriest public response I get, much more so than many hot-button social issues. The only topic that generates more vitriol is the inheritance tax, of which the less said today, the better.
"You liberal ninny!" most of these comments begin, or something along that line. "Don't you know that corporations don't pay taxes? All they do is pass them along to their customers in the form of higher prices."
First of all, that's is not necessarily true. There can be market pressures on a company to keep prices lower. Prices are what experts call "inelastic," which means they don't automatically rise and fall by every penny as a company's costs change.
Reubin Askew, governor of Florida from 1971 to 1978, made the point brilliantly. He stood on the Georgia-Florida state line and held up products that were priced the same in both states, even though Georgia already had the tax and Florida didn't.
But, you know, let's pretend for a second that the claim were true, that corporations magically are sticking customers with every penny of the tax.
In that case, the customers of 5,000 companies in Florida are paying the freight for everybody else. So it is not some radical, socialist idea that the burden should be spread more evenly.
Next, let's talk about the Lawn Mower Guy.
Nobody is advocating that Florida slap a new tax on all 1.5-million businesses in Florida. Many of the businesses that don't pay are little ones, mostly single-owner businesses. Who wants to punish the lawn guy?
But even many of the biggest companies use the patchwork of loopholes and shelters to avoid paying any taxes. (In case you're wondering, the Times paid $573,706 in state income taxes last year.) There ought to be some way of capturing more of them.
Finally, one of the most angry arguments against the corporate income tax is that the money is "taxed twice": once at the company level and once in the personal incomes of the company's owners and shareholders. How wicked, how unfair, how liberal!
And you know, I agree completely. I will support an end to double taxation on corporate profits when we end multiple taxation of the paychecks of workers, who collect a post-tax net income, then turn around and fork over a lot of the rest of it in taxes, too.
What to do? As usual, the answer lies in the Florida Legislature. But the Legislature leans so far in the direction of corporate interests that a solution there seems most unlikely. If anything ever happens, it will happen only because of the loud and unmistakeable wishes of the voters.
