March 7, 2022

New 50-State Analysis: Poorest Two-Fifths Would Bear the Brunt of Sen. Rick Scott’s Proposed Tax Increase

news release

An analysis of Sen. Rick Scott’s proposal to increase federal income taxes finds that the lowest-income 40 percent of households would bear the brunt of the increase and pay an average of $1,000 more in taxes each year, the Institute on Taxation and Economic Policy (ITEP) said today. 

Sen. Scott is the head of the National Republican Senatorial Committee. Two weeks ago, he released an 11-point agenda for Republicans should they take control of the Senate after the mid-term election. The agenda includes a line item that calls for an increase in federal income taxes for individuals and households who currently have incomes too low to owe any income tax under current law. “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,” the agenda stated.  

“Sen. Scott once again dismisses all the other taxes people pay and focuses on the federal income tax to erroneously claim some people don’t have ‘skin in the game,’” said Steve Wamhoff, ITEP’s federal policy director. “Billionaires are getting richer, and some of them are altogether avoiding taxes or paying a tiny percentage relative to their income and wealth. The 2017 tax law further worsened inequality by giving huge tax breaks to the rich. It’s inconceivable that a lawmaker would propose to single out the most vulnerable households for higher taxes.” 

Sen. Scott’s agenda is void of details, but it is difficult to interpret in any other way than an intent to roll back or reverse decades of policymaking (such as refundable tax credits) that has boosted families’ economic security. ITEP’s analysis interprets Sen. Scott’s proposal to require federal income tax liability of at least $1. For some Americans, this would simply increase their tax liability from $0 to $1, the report states. But many others currently have negative federal income tax liability because they receive refundable tax credits like the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC). Refundable credits allow tax refunds to exceed federal income tax withholdings. 

ITEP’s analysis finds that the share of households facing tax increases under Scott’s agenda for the GOP would vary across states, from a low of about 24 percent in Washington State to a high of about 50 percent in Mississippi. 

The states most affected, where more than 40 percent of residents would face tax increases, are located mostly in the south: Mississippi, West Virginia, Arkansas, Louisiana, Alabama, Kentucky, Oklahoma, Georgia, New Mexico, South Carolina and Sen. Scott’s home state of Florida. 

The full report, including 50 state data, is here: