It's a mantra some Republicans must be muttering even in their sleep -- how Florida's intangibles tax is "insidious" because it taxes "seniors and savers." It is, horror of horrors, a "tax on saved money!"

That's from this week's House debate over more tax cuts.

Now for a reality check. The state expects to collect $697-million from this tax on stocks, bonds, notes and other paper investments. Meanwhile, schools, cities, counties and special taxing districts will collect more than $14-billion from the real estate tax. How's that for a tax on saved money?

Every penny paid in property tax is levied either against savings -- your equity in your house -- or what you owe. In that respect, your savings are taxed even before you've saved them. Homeowners are cushioned by exemptions, but other property owners are not.

Republicans have chosen to ignore this throughout the debate because it is inconvenient to their propaganda campaign against the intangibles tax. Democrats have been reminding them, but appeals to reason are pointless in the current Florida House of Representatives.

The issue ought not to be whether a tax is a tax on savings or a double tax; all of Florida's taxes fit one or both of those descriptions. The better questions are whether a tax is logical and necessary. The intangibles tax fails some tests of logic because it applies to some investments but exempts many others, such as retirement accounts, and because it is unevenly paid by those who owe it. It would be a better tax if it applied not to value but to the income from securities. But Florida's Constitution disallows that.

On the other count -- necessity -- the tax is indispensable. State revenue estimates continue to dwindle even as legislators debate spending cuts, such as to the budget of the Florida School for the Deaf and the Blind, that border on immorality.

Still, the House is churning out tax cuts, including a back-door school voucher program and more blank checks for sports programs, as if tomorrow were in another universe. Fortunately, there is another house to reckon with. Caution flags fly over the Senate.

The Senate has an excellent philosophical reason, if it wishes to invoke it, for passing no tax cuts this year. It's the tax reform study commission created last year by Senate President John McKay and Sen. Jim Horne, R-Orange Park, who chairs the Committee on Finance and Taxation. The task force needs another year to work. The Legislature needs to be patient.

Though he's a conservative, Horne believes Florida's tax base is "dysfunctional, it's nearly broke, it's got to be fixed." He subscribes to the classic bipartisan doctrine that the best tax structure has the broadest possible base and the lowest possible rates. With that goal in mind, Florida's tax prescription this year should be the physician's admonition, "First, do no harm."

Back to Opinion

Contact the Times | Privacy Policy
Standard of Accuracy | Terms, Conditions & Copyright

From the Times
Opinion page