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Florida Sen. Rick Scott’s (R) 11-point tax plan has made him an easy target for a White House looking to turn the nation’s attention away from record-high inflation. Experts have said Scott’s proposal would raise taxes for the lowest-earning Americans, which led President Biden to call Scott’s idea “extreme.”
Scott’s plan has also put him at odds with his own party. Senate Minority Leader Mitch McConnell (R-KY) publicly stated if the GOP regains control of Congress, he would not implement any part of Scott’s plan. McConnell and other Republicans have good reason to oppose Scott’s plan, according to AEI’s Tim Carney. He calls the tax restructure “dumb, economically harmful and morally bankrupt.”
Here’s the argument from Senator Rick Scott:
“All Americans should pay some income tax to have skin in the game, even if a small amount. Currently over half of Americans pay no income tax.”
Scott’s idea is to reverse some of the tax cuts President Trump gave to working men and women and then go further in hiking taxes on low-income Americans.
First, Scott wrongly implies that half of Americans aren’t working.
The people who pay no federal income tax aren’t mostly dilletentes sitting on the couch. They are largely parents who benefit from family-friendly tax breaks passed by Republicans.
The average family of five in Florida, for instance, earns $93,000. If that couple takes the standard deduction [Taxable Income: $93,000- $25,900=$67,100] and their employer-provided health insurance premiums cost $6,000 [Income: $61,100], plus they max out their health savings account with a $7,300 contribution [Income: $53,800], plus they put 3% in their 401k, [Income: $51,010] that leaves them with taxable income of about $51,000. They would owe $5,725 in federal income taxes, but with three kids, they get a $6,000 tax credit, which brings their federal income taxes down to zero.
These aren’t slackers. These are beneficiaries of a tax code that respects families and encourages savings.
Second, Scott wrongly suggests that these folks are avoiding taxes. In reality, they might be paying more $10,000 in taxes to state and federal government, just not in income taxes.
Everyone who earns even a single dollar pays payroll taxes—the taxes that fund Social Security and Medicare. If you buy gasoline, you pay state and federal gas taxes. If you buy almost anything, you’re paying sales tax. If you own your home, you’re paying property taxes.
