HB 1601/SB 1570 would create a Working Floridians Tax Rebate program within the Department of Revenue
Floridians paid lower wages spend significantly more of their income on state and local taxes than those with high income. This is because the state lacks a personal income tax and relies mainly on the sales tax to raise general revenue. The state’s upside-down tax code also exacerbates racial inequity because Floridians with low income are more likely to be people of color. While often marketed as a “low tax” state, the truth is that Florida’s tax system is among the most regressive in the nation — favoring those who make the most, squeezing those who earn the least, and exacerbating income inequality among communities of color.
We can help build more prosperous communities and strengthen future generations by passing a state-level Earned Income Tax Credit (EITC). Moreover, 68 percent of likely Florida voters support enacting a state EITC. This policy is a proven way to increase economic stability and opportunity, boost local economic activity, and improve child and community well-being.
In 2019, more than 2.1 million Floridians received $2.9 billion through the federal EITC, with the average credit amount totaling $2,492. The federal EITC is a common-sense tax break that benefits families, communities, and local economies. Floridians who earn below specific income thresholds can receive a “refundable” credit on their income taxes. When refundable credits exceed the amount of taxes that a worker owes, the Internal Revenue Service (IRS) sends the worker a refund for the remainder of the credit. The federal EITC is already one of the nation’s most effective tools for reducing poverty, encouraging work, and countering income inequality. To further build on the success of the federal EITC, Florida should enact a state-level version.
Thirty states, the District of Columbia, Puerto Rico, and localities such as New York City and Montgomery County, Maryland have enacted their own versions of the EITC. For the 2022 session, Senator Jones has introduced a bill that would create the “Working Floridians Tax Rebate” (WFTR) program and provide EITC recipients a rebate set at 20 percent of their federal credit. A tax rebate of this size would put an estimated $1.08 billion back in people’s pockets, with an estimated average rebate of nearly $500 per household. The WFTR would also increase people’s disposable income and pump $862 million each year into the local economy.
We support legislation that would establish a state EITC or Working Floridians Tax Rebate.