Dear Governor Scott,
Continuing the State and Local Income Tax Deduction is a bad idea. But if it continues, I have a solution for Florida residents.
As Congress debates the 2017 Federal Income Tax reform proposal, the discussion to eliminate state and local income taxes has become rather contentious. The state and local income tax deduction forces the citizens of low taxed states to bear a higher percentage of the Federal tax burden then they otherwise would. In essence, the low Tax state's are subsidizing the high tax state's spending.
The high tax states counter that they pay more in taxes then they get back. But these are unrelated arguments and should be handled as such; even though the argument is the same as a high income earner complaining that he pays more to the federal government then he gets back - well duh! Yes, as long as over half the federal budget is dedicated to income redistribution, the rich states will send money to the poor states. But that's got nothing to do with forcing low taxed states to subsidize the high taxed state's internal programs.
If the Deduction remains, I request the state of Florida, which has no income tax, make the following changes to Florida tax law.
1. Enact a Florida Income Tax equal to 100% of the Individual's Federal 1040 Adjusted Gross Income. Not the tax, the income. Enter that number on a blank piece of paper.
2. Enter that number on the Federal 1040 line for State Income Tax Deduction, thereby eliminating all federal income taxes for all Florida residents.
3. Enact the Florida Resident AGI Income Benefit equal to the 1040 state Deduction for each person who files. Enter that number on your piece of paper and subtract that amount from the state tax leaving a tax amount of zero.
4. Tell Florida state filers that if they owe no federal tax they can through away their three line Florida tax form.
5. Enact a law to repeal the Florida Income Tax once the State Tax Deduction is removed.
Florida residents would continue to have a zero state income tax liability. But since Congress would not include the Florida Resident AGI Benefit as Federal Income, all Florida residents would also have a zero federal tax liability. And would even be due a Federal Refund for any tax that was withheld by an employer.
Perhaps then the high tax states and their Congressional supporters would recognize how patently unfair and mathematically unsound it is to force the Low tax states to help pay for another state's programs that they have deemed were not appropriate for their own state.
Sincerely yours and partially with tongue in cheek,
James Schneider
