Daniel Tilson: Florida needs its wealth taxes back

The 800-pound gorilla in the Tallahassee conference room with state economists this week is immensely powerful. It looms large in the minds of elected officials and policy wonks alike, waiting to pounce if necessary.

It’s the beast of burden bearing the weight of Florida’s modern-day “wealth lobby.” And it’s always ready to throw that weight around, with impunity.

 Unfortunately, the public can’t see it. Guess that passes for “transparency” in Florida policy-making these days. It will go unmentioned during two days of meetings about how to balance our government’s revenues against its responsibility to provide services such as public health care, pre-K education and public transportation, to name a few.

The wealth lobby has always been on the scene, of course. There’s always been and will always be a percentage of rich folks and big businesses committed to limitless, untouchable accumulation of personal and corporate wealth, regardless of collateral damage.

It’s the unrepentantly rapacious element in our society that caused the stock market crash of 1929 and the Great Depression that followed.

That’s why in the early 1930s Florida and other states instituted two taxes to prevent no-strings-attached accumulation and concentration of wealth, following a hard-learned and widely accepted lesson: that the “American Dream” can be a two-edged sword.

One edge lets individuals and businesses carve out limitless stockpiles of money. But in the wrong hands, absent a system for matching wealth with required social responsibility, the other edge of that sword can cut 98 percent of our country off at the knees.

And so in 1930 and 1931, the estate tax and intangibles tax were instituted. Together, they helped Florida climb out of the ditch that irresponsible rich folks and businesses drove it into.

The estate tax applied only to the truly wealthy and by 2006, only to people who made $2 million or more. It was never a “death tax” as the wealth lobby and its anti-tax movement labeled it. It was a wealth tax. When levied, it was credited against federal taxes, never a “double” tax.

Although wealthy Floridians were left plenty wealthy upon paying it, many without complaint, some banded together to spend money and political capital slashing away at it for years and finally killing it in 2009.

The intangibles tax was levied on “non-physical” property such as stocks and bonds. But middle-class intangibles such as cash savings, certificates of deposit, insurance policies, IRAs and 401Ks were exempted. A married couple’s non-exempt investment portfolio was subject to the tax only if totaling $100,000 — requiring a $60 payment.

But Florida’s wealth lobby killed the intangibles tax too, in 2007.

You get the idea. For three generations of Florida history featuring the rise of a thriving middle class, wealth taxes were fairly and almost exclusively levied on the wealthiest people and corporations. There were never any limits on the wealth they could accumulate either.

Yet the wealth lobby killed them. Go figure then, how in recent years income inequality, personal wealth concentration and corporate profits have reached record-high levels. The rich are doing swimmingly, while middle-class wages, average household incomes and upward economic mobility are dead in the water.

The loss of those two targeted, effective taxes has cost Florida $12 billion in revenue, so far.

Think that could help with education, health care, housing, job training and transportation?

Maybe that palpable but invisible 800-pound gorilla took a bathroom break during the Tallahassee meetings, and some brave young economist posed that very question…but don’t count on it.

 Pose it yourself, especially to state legislators. Just be ready to hear “death tax” and “job creator” repeated 10 times.

Daniel Tilson has a Boca Raton-based communications firm called Full Cup Media, specializing in online video and written content for non-profits, political candidates and organizations, and small businesses. Column courtesy of Context Florida.