Senate President John McKay is taking on Florida's tax system because he believes it should be made into a fair and broader-based system that taps into growth.

Given the current political zeal for tax breaks, state Senate President John McKay has moved cautiously in his quest to bring some measure of sanity to the method of taxation. But whether or not his legislative colleagues are willing to listen, he is telling an indisputable truth.

Florida's tax system is broken.

"I believe that the simplification and modernization of our tax system is critical to Florida's future," McKay said as he opened the 2001 Legislature in March. "Citizens deserve a tax structure that is simple and fair -- yet also encourages economic growth in our state. My goal is to commence the discussion in order to bring our tax structure into the technological age. And while too often people confuse tax reform with tax increase, let me assure you that nothing could be further from the truth."

Here's the tax mess McKay is talking about:

The sales tax accounts for 71 percent of all general government revenues, yet more things are exempted from the tax than are charged it. The state will collect roughly $14-billion in sales tax this year, but will exempt transactions and services worth some $21-billion in taxes. Most people no doubt would agree with some of those exemptions, namely groceries, medicine and other essentials of life. But what about the 221 various tax exemptions the Senate Fiscal Resources Committee has identified? Should the state really give a $22.6-million break for charter fishing boats, a $24.9-million break for livestock and racehorse feed, or a $2.1-million break for the Professional Golf Hall of Fame? And what about professional services? Should the state really exempt all professional services, such those from as lawyers and accountants and advertisers? Shouldn't people who use those services pay a tax like the rest of us?

The exemption for professional services was removed at one point in 1987, when Gov. Bob Martinez, a Republican, led a valiant fight for tax reform. But he and legislative leaders from both parties panicked when lawyers and advertisers and media interests launched a massive public relations assault, and the Legislature repealed the services tax in special session before the year was out. How did the state make up for the loss in taxes? It raised the rate on the rest of the sales taxpayers, from 5 to 6 percent.

So the challenge now is to look fairly and dispassionately at how the state taxes and what it taxes. No one is seriously suggesting an income tax, which the state Constitution forbids anyway. And McKay is not asking to increase the total amount of taxes. What he is seeking is fairness and a broader base for taxation, one that taps into the growing parts of the state's economy and is not so subject to fluctuation during economic downturn.

One would think a governor and Legislature that have pushed for revolution in so many areas of government -- public schools, universities, state employment protections, environmental regulation, affirmative action -- would be eager to try to reform the tax system. But Gov. Jeb Bush and House Speaker Tom Feeney have so far given McKay a cold shoulder. Eliminating tax breaks, apparently, is not nearly as rewarding as granting them.

Next year is likely to be McKay's last as Senate president, and he says he's determined to get the job done. The special interests will fight him, and he'll face enormous odds within the Legislature itself -- the political dynamics of an election year, the distraction of legislative redistricting, and the pervasive demagoguery about taxes. But McKay is taking the long view, a vantage point too often obscured in modern politics. He will find himself on the right side of history if he succeeds.

Back to Opinion

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

From the Times
Opinion page