Analysis
December 29th, 2015

Bush cut Florida taxes, but mostly for high-income residents


As part of his presidential campaign, Jeb Bush has proposed a detailed plan for federal tax cuts. The Tax Policy Center’s analysis of his plan is available here. As governor of Florida from 1999 to 2007, Bush signed into law a number of different tax cuts—from relatively small sales tax holidays to the complete elimination of a tax on wealth.

Although Bush has claimed he cut taxes by a cumulative $19 billion during his eight years in office, an independent estimate by Martin Sullivan of Tax Notes put the total closer to $13 billion based on reports published by the Florida Legislature’s Office of Economic & Demographic Research. (The discrepancy is mostly about Florida’s estate tax, which was killed by federal, not state, legislation.)

Bush’s biggest tax change was the reduction and eventual elimination of the state’s intangibles tax, a 0.2 percent tax on the value of stocks, bonds, mutual funds, money market funds, and unsecured notes. Bush argued the tax penalized retirement planning and called it “stupid, insidious, and evil.” Opponents of the tax cut argued it benefited the rich at the expense of other Florida residents. Sullivan estimated the intangibles tax cut was three times the reduction in sales taxes (the next largest cut).

Bush

Florida is one of seven states that do not tax individual income. Instead, it relies heavily on sales taxes and, at the local level, property taxes. Bush did not reduce the rate on general sales taxes during his tenure, but he and the legislature held several sales tax holidays and exempted some products (such as advertising agency and printer purchases) from the tax. Bush also cut property taxes, unemployment taxes, and repealed a per-drink tax on alcohol served bars.

The policy changes that created the largest revenue increases during Bush’s term were both gambling related. While Bush was governor, Florida expanded its lottery (for example, by introducing more scratch-off games) and authorized slot machines—although Governor Bush opposed it.

Cross-posted on the Urban Institute’s Elevating the 2016 Debate blog.

Tracy Gordon contributed to this post.