August 30, 2006

Florida: Nasty Tax Talk in Gubernatorial Campaign

In Florida, two Republican gubernatorial candidates are duking it out in advance of the September 5 primary election. Frontrunner Charlie Crist and distant-second Tom Gallagher have been engaged in a spirited who's-more-conservative battle for the last month, and in a recent debate Crist (who has moderate positions on issues such as same-sex civil unions, stem cell research and abortion) set the tone for the tax debate by asserting that "I have never supported a new tax, and I never will, unlike my opponent."

In a state that confronts fundamentally worrying structural problems in its tax system, this approach hardly establishes Crist as green-eyeshades material. But it gets worse. Apparently what Crist is referring to with the "unlike my opponent" swipe is that Gallagher supported a 1 cent hike in the state sales tax to pay for prison construction-- in 1993. So the last time Gallagher thought a tax increase was necessary was before the Internet was invented (as far as most people are concerned, anyway) and that makes him a liberal? A truly execrable anti-Gallagher website elaborates on this theme by calling the Gallagher prison tax idea "the largest tax increase in Florida history."

If you wonder how a 1 percent hike in a sales tax that's already 6 percent can be the "largest in history", then you're smarter (or at least more honest) than the creators of the aforementioned website. After all, the 1 cent hike enacted in 1988 that pushed the rate from 5 cents to 6, and the 1 cent hike enacted in 1982 that knocked the rate up from 4 to 5, were not smaller than the Gallagher-supported 1 cent idea in any meaningful way. Sales taxes bring in a little bit more every year as Florida's population grows and prices go up. That means each cent of the sales tax brings in more and more-- and also means that any proposal to increase the rate will bring in more as time goes on. [And, of course, you want the yield of a tax to increase over time, because inflation drives the cost of funding public services up each year as well.]

Gallagher's hands aren't clean either, however:
Gallagher pointed out that Crist in the 1990s supported a penny-per-pound tax on sugar to pay for Everglades cleanup, although his opponent now insists that was a fee increase.
It's probably too much to expect these guys to seriously analyze the flaws of the Florida tax system in a debate (or, sadly, at any time during the course of the campaign), but this is just horrendous. Can't wait to see what the Democratic candidates are up to...


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