Tax season is just about here. It is the time we either welcome or dread depending on our individual circumstances. Florida is a state that offers more than many of our states because Florida has no state personal income tax and offers a 6.00 percent state sales tax rate, a max local sales tax rate of 2.00 percent, and an average combined state and local sales tax rate of 7.01 percent. Florida’s tax system ranks 4th overall on our 2022 State Business Tax Climate Index.
Are taxes high or low in Florida? Despite being one of the most popular vacation and retirement destinations in the U.S., Florida is very affordable. In fact, the average cost of living in Florida is not even 1% higher than the national average, according to a cost-of-living index as of Sep 12, 2022.
April 18 is the federal tax deadline for individuals and small businesses. It’s the due date for submitting your tax return and paying taxes you still owe on income earned in 2022.
What may surprise or even shock you is that 57 percent of households paid no individual tax. Maybe this is part of the problem the United States has in our current debt. You might want to know It is estimated that about 42.9 percent of American adults in U.S. households paid income tax in 2021. In that same year, about 66.9 percent of U.S. households with an income between 40,000 and 50,000 U.S. dollars paid no individual income taxes*
Who Does Not Have to Pay Taxes? Generally, you don’t have to pay taxes if your income is less than the standard deduction, you have a certain number of dependents in relation to your income, are working abroad and below the required thresholds, or are a non-profit organization that qualifies.
The problem we have in this country is the individuals and companies that ask to be paid in cash with the intentional purpose of not declaring their income and therefore avoid paying income tax. As homeowners, we have been asked many times by repairmen, installers, service people and all types of individuals and businesses if we would pay with cash instead of paying by credit card or check. And, of course, there are many people who earn income through receiving tips. Just think of the many categories that probably don’t report this type of income.
Home healthcare workers are one of the biggest culprits of not paying taxes as they make significant incomes that are not reported. And there are many other industries that avoid paying their fair share of taxes as they are often paid in cash, including restaurant service staff, salon and spa workers, housekeeping services, handymen, and the list goes on. There are many types of businesses like restaurants that are paid in cash. Is this cash reported to our government?
It is concerning that legitimate taxpayer’s foot the bill for the non-taxpayers. Couple this with our open borders and all the illegal immigrants pouring into the country and we have a severe financial crisis for taxpaying Americans. The benefits the illegal immigrant receive include housing, clothing, food stamps, Medicare, Medicaid, and the list goes on when you factor in food banks, various non-profits, and gifting that exists.
The most concerning part of people avoiding paying taxes is the escalating debt the United States is currently in. And, unfortunately, the debt continues to increase. How can we be a world leader when we are this far in debt? Then factor our relationship with China and it is alarming. And our current administration continues to promote paying off student debt and funding Ukraine’s war with Russia.
So how many cases of tax evasion exist in the United States each year or how much does the US lose in tax evasion?
The average gross tax gap was estimated at $441 billion per year. After late payments and enforcement efforts were factored in, the net tax gap was estimated at $381 billion as of reports issued on Oct 28, 2022.*
How do we fix the problem and begin lowering our debt? There is no simple answer. But one thing we should all agree on is that we need more experienced business professionals running the country and far fewer lifelong politicians.
We should also make every effort to hire and support people that are taxpaying individuals. By doing this we are helping our country, our future and ourselves. Our Constitution starts with “We the people” and those three words should be part of how we unite our country, our values and our lives.
We are fortunate in Florida because we do not have a state income tax making Florida one of seven such states in the United States. The state constitution prohibits such a tax, though Floridians still have to pay federal income tax.