For the 2025 regular session, policymakers ought to pass worldwide combined reporting, which would raise nearly $2.4 billion annually.
As the state’s population continues to increase, change, and age, so will public service demands. Since the early 2000s, Florida’s population has grown by 35 percent, from 16 million in 2000 to 21.5 million in 2020, and it is much more diverse. Additionally, Florida is third in the country (slightly behind Maine and Vermont) in the percent of its population 65 years of age or older, with 21.6 percent of Floridians falling into this group. By 2030, the Florida Demographic Estimating Conference anticipates that nearly 25 percent of Floridians will be aged 65 or older. This has implications for the relative size of the labor pool, the need for health care services, the modes of service delivery, and overall tax revenue.
Yet, despite significant ongoing demographic changes, Florida has set a trend of collecting and spending less general revenue, via taxes, than most other states. The state relies heavily on its general sales tax to balance its budget.
The state’s dependence on sales taxes also perpetuates a tax system in which wealthy households pay a far lesser share of their income to taxes than families with low and middle incomes. According to the Institute on Taxation and Economic Policy, the bottom 20 percent of Florida taxpayers, as measured by income, bear an effective state and local tax rate that is nearly five times that of the top 1 percent of households. In fact, Florida is one of 41 states that tax the top 1 percent less than every other income group, and one of 34 states that tax residents with the lowest income at a higher rate than any other group. Nationally, tax systems in 44 states exacerbate inequality by making incomes more unequal after collecting state and local taxes. Florida’s tax system stands out as the most upside-down in the country.
A well-designed revenue system is essential for maintaining Florida’s economic health. An effective tax code supports a thriving community's building blocks, such as the environment, housing, infrastructure, public health, safety net programs, and education. Just as important, a fair tax code ensures that everyone contributes their share to maintain these building blocks.
There is a way to generate the revenue our state needs that does not put the greatest weight on everyday Floridians. By implementing 14 common-sense measures, lawmakers could raise more than $3.5 billion in revenue.
