Florida Enjoys No-Income Tax Status

While New Hampshire residents are famous for their aversion to the income tax, Florida taxpayers also are spared from this odious levy and state politicians wisely avoid any mention of the income tax. As the Gainesville, Florida, newspaper reports, even Democrats are reluctant to broach the subject. Not surprisingly, tax competition plays a role. The original amendment banning the income tax was motivated by a desire to attract productive people, an approach which simultaneously - and deservedly - punished high tax states:

…one potential new revenue source, common in most states, remains unthinkable and unmentionable in Florida: a personal income tax. “It’s a terrible way to tax,” said House Policy and Budget Committee Chairman Ray Sansom “We would never consider something like that. That would be the last thing. It’s sort of over our dead bodies.” Sansom, R-Destin, said House Republicans never gave income tax the slightest thought when they came up with their tax-swap proposal. …Senate Democrats also never considered an income tax when they drew up their proposal… Florida’s income tax aversion dates to 1924, when voters banned it through an amendment to the state constitution. The state remains a tax haven more than 70 years later… Politicians saw the ban as a way to attract wealthy people and encourage them to invest in Florida at a time when other states just were beginning to tax incomes.