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Yes, Florida has one of the country’s lowest tax burdens

PolitiFact | Gov. DeSantis touted the state’s low taxes in a recent speech in Ohio.
 
The Internal Revenue Service 1040 tax form for 2022. Florida has a low tax burden compared with other U.S. states.
The Internal Revenue Service 1040 tax form for 2022. Florida has a low tax burden compared with other U.S. states. [ JON ELSWICK | AP ]
Published April 21, 2023|Updated April 21, 2023

As he considers a potential 2024 presidential run, Florida Gov. Ron DeSantis has positioned his state as the blueprint for the country.

“The state of Florida has set a standard for this country,” DeSantis said April 13 at a Lincoln Day event in Akron, Ohio, sponsored by the Butler County Republican Party.

DeSantis touted Florida’s education and economic freedoms, and its low taxes.

“Our tax burden, and we have no state income tax, you all should try that sometime. It works pretty good,” DeSantis said. “We have the second lowest tax burden per capita in the United States.”

We rated a similar claim from Sen. Rick Scott, R-Florida, Mostly True in 2017. But we wanted to look into what the data shows in 2023.

Tax burden rankings measure how states compare in the amount of taxes they collect. They do not measure whether the taxes are allocated equitably across the income spectrum.

There are many ways to measure a state’s tax burden. The most common measure divides the total amount of money a state collects in taxes by the state’s population. This is known as a per capita measure. Tax burdens can also be measured by dividing the state’s tax revenue by the state’s personal income — the combined personal incomes of everyone who lives in the state.

Both measures show DeSantis is right about Florida’s ranking. Regardless of the calculation method, Florida has a low tax burden compared with other states.

Florida has among the lowest tax burdens in the country, regardless of how it’s calculated

DeSantis’ team pointed PolitiFact to the Federation of Tax Administrators. The group calculates tax burden as an average of how much people pay in taxes compared with the state’s population.

The organization’s 2021 state tax revenue rankings, which go from highest burden to lowest, puts Florida in 49th place, above Alaska and Texas. (The rankings also include Washington, D.C.) The 2022 rankings place Florida in 50th above New Hampshire. This includes only state taxes, which “can bias comparisons for some states,” according to the Federation.

Florida TaxWatch, a nonpartisan government watchdog organization funded by business interests, uses the same tax burden definition. In 2022, from highest tax burden to lowest, the group ranked Florida 48th in state taxes alone. Accounting for state and local taxes, Florida ranked 46th.

The Tax Foundation, a conservative-leaning think tank that researches U.S. tax policies, calculates tax burdens differently. It divides the total state and local taxes paid in a state, divided by the state’s share of the net national product — the total market value of the goods and services a nation produces.

By this calculation, in 2022, ranking tax burdens lowest to highest, Florida had the nation’s 11th lowest tax burden when looking only at state taxes and at a combination of state and local taxes.

WalletHub, a personal finance site, looks at tax burdens as a comparison of personal income. By this measure, in a highest burden-to-lowest burden ranking, Florida was 46th.

USAFacts, a nonprofit organization that reports on government data, also measures tax burdens by comparing personal incomes. Using 2020 data, the organization ranked Florida as the second lowest tax burden state.

Tax burden calculations don’t take into account who is paying the most in taxes

Looking at tax burdens as a proportion of population or of state personal income does not take into account who is actually paying for a state’s taxes, said Randy Albelda, economics professor at the University of Massachusetts, Boston. That’s because tax burden calculations are an average and don’t account for how much people pay in taxes based on their specific income brackets.

For example, Albelda said, if the average annual tax burden in your state is $1,000 in taxes, but you make only $10,000 a year, that’s a much bigger slice out of your income compared with someone who makes $1 million a year.

Lucy Dadayan, a research associate at the Urban-Brookings Tax Policy Center at the Urban Institute, echoed Albelda’s sentiment. She said although Florida ranks low in tax burden, it’s “important to remember that Florida has a highly unfair state and local tax system.”

We can look at a state’s tax burdens by income group to provide this missing context.

The Institute on Taxation and Economic Policy, a left-leaning think tank, does this. In its 2018 ranking, Florida ranked as the third-least equitable tax burden state. That’s because the state relies largely on sales taxes as it has no income taxes. This is known as a regressive tax, meaning people with lower incomes pay a higher percentage of their income in taxes.

“So it does have a low tax burden, but it’s pushing it all on low-income people,” Albelda said.

The lowest-income people in Florida pay as much as six times their income in taxes as their wealthy counterparts, the institute said in a 2018 report. That means that although Florida has a low tax burden on average, the state is often high-tax for people with lower incomes and low-tax for people with higher incomes.

Our ruling

DeSantis said Florida has “the second lowest tax burden per capita in the United States.”

There are different ways of calculating a state’s tax burden. But regardless of the method, Florida ranks relatively low for its tax burden — as low as second from the bottom and as high as 11th from the bottom.

However, a tax burden ranking measures how states compare with one another in the overall amount of taxes they levy; it does not address whether those taxes are allocated equitably across the income spectrum. Florida is considered a highly unequal tax state, so although its overall taxation rate is low, the burden falls more heavily on lower-income residents.

DeSantis’ claim is accurate but needs clarification or additional information. We rate it Mostly True.