Although very few businesses pay corporate income tax in Florida, Gov. Rick Scott and legislative leaders are aiming to further cut corporate tax revenues, a move that would constitute a multi-billion-annual gift to a few thousand highly profitable corporations, according to a new report by Florida Center for Fiscal and Economic Policy (FCFEP).
Senate Bill 138, already approved in two committees, would reduce corporate income tax collections by $19 million annually. Its companion legislation is House Bill 49.
According to the FCFEP report, passage of these bills will reduce income available to meet vital state services even more and make Florida’s unfair tax system even more unfair. The report states:
“Cutting the tax would do little if anything to improve an already business-friendly tax structure. But it would reduce revenues to fund the level of services necessary to support a good quality of life, which is the foundation of economic development.
Without the corporate income tax as it now exists, the state would be even more reliant on the regressive sales tax to fund state services. The sales tax already requires low- and moderate-income Floridians to pay a much larger share of their income in taxes than more affluent residents, and the differences are large enough to make Florida’s tax system the second most regressive (that is, unfair) in the nation.”
Proponents of eliminating the corporate income tax say, it will make Florida more business-friendly and stimulate additional activity and job, although there’s no evidence to support these claims.
FCFEP suggests that a better alternative would be to modernize and strengthen the corporate income tax, making sure that profitable corporations pay their fair share and other taxpayers don’t bear a disproportionate share of the cost of state services.
See the full FCFEP report HERE.
