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Florida Gov. Ron DeSantis dangles numerous tax cuts on everything from pet food to baby supplies ahead of November reelection bid

Sep 21, 2022, 01:09 IST
Business Insider
Florida Governor Ron DeSantis smiles during a press conference announcing expanded toll relief for Florida commuters, Wednesday, September 7, 2022, in Miami, Florida.Rebecca Blackwell/AP Photo
  • GOP Gov. Ron DeSantis has proposed cutting $1.1 billion in taxes for Floridians.
  • DeSantis is facing off against Democrat Charlie Crist in November.
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Florida Gov. Ron DeSantis has proposed an additional $1.1 billion in tax cuts presented weeks ahead of his November reelection bid.

DeSantis is asking the Florida legislature to permanently lift the state's 6% sales tax on baby necessities including on cribs, strollers, clothing, shoes, baby wipes, and diapers. He also wants the state to nix the sales tax on medical equipment and on medicines for pets.

DeSantis billed his proposal as an inflation-fighting measure to provide relief on items such as high grocery prices, though it's not clear it would have the intended effect. He promised to announce more tax cuts in the weeks ahead.

"I'm concerned about some of the turmoil that's yet to come," DeSantis said during a press conference in Bradenton, Florida, referring to lingering inflation and investor trepidation about forthcoming economic turmoil.

But tax breaks won't necessarily alleviate inflation. Some analysts, such as Howard Gleckman at the Tax Policy Center, have warned that tax breaks could actually worsen inflation because people will spend and consume more at a time when supplies are limited.

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Still, some of the tax cuts DeSantis is proposing come on items that families find essential and that they'd likely buy with or without a tax break.

Certain proposals DeSantis presented Tuesday would be temporary. They include lifting the sales tax for a year on children's books, on athletic equipment, and on toys, as well as a proposal to suspend the sales tax on pet food and on household items that cost $25 or less. The latter would include items such as laundry detergent, paper towels, and toilet paper.

A more temporary tax holiday, of two weeks, would come for back-to-school items ahead of both the fall and spring semesters.

DeSantis said that, taken together, the proposals would equate to $1.1 billion in tax cuts. In early September DeSantis already proposed slashing all Florida tolls by half for drivers who commute frequently.

Later in the day on Tuesday, speaking at a campaign event in Palm Beach, Florida, DeSantis said the tax cuts would add up to $2 billion once he announces additional proposals.

GOP Gov. Ron DeSantis will face off against former Democratic Rep. Charlie Crist in November 8 general election in Florida.Joe Raedle/Getty Images and Rebecca Blackwell/AP Photo

DeSantis up for reelection in November

DeSantis won't be able to implement his tax plan unless he first wins reelection in Florida on November 8. He's set to face off against Democrat Charlie Crist, a congressman from St. Petersburg who was previously a Republican governor of Florida.

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Crist hasn't released a tax cut plan but proposed a slew of affordability measures to lower housing costs, including on homeowner's insurance, as well as the costs of utilities such as electric bills.

Crist is the underdog in the race because registered Republicans in the state outnumber Democrats. Plus, DeSantis is considered to be a top contender for the White House in 2024, particularly if former President Donald Trump doesn't run.

In the last few days DeSantis has grabbed national headlines for a political stunt in which he directed state funds to relocate migrants from San Antonio, Texas, to Martha's Vineyard in Massachusetts.

DeSantis won't be the only decision maker on the tax package. But the governor has proved to have significant influence with a legislature that has been largely deferential to his priorities.

Florida is one of nine states that doesn't have a state income tax, and tax cuts are typically a major part of GOP platforms. The state has wiggle room on spending because it finished the most recent fiscal year, in June, with a $22 billion surplus.

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But in general, states all over the country have been awash with cash from President Joe Biden's COVID stimulus, called the American Rescue Plan, and after they took in far more revenue than they expected during the pandemic.

The GOP-controlled legislature and DeSantis tapped into $200 million-worth of Biden's COVID stimulus to fund a 25-cents-per-gallon gas tax holiday in Florida that starts in October.

DeSantis' tax plan on Tuesday did not contain an explanation concerning whether the funds for the tax break would come from the COVID stimulus or from the state's reserves. His office did not immediately respond to an inquiry about the matter from Insider. The matter may fall to the legislature to decide.

DeSantis first previewed the proposed tax cuts during a press conference at the end of August.

In May, DeSantis signed a tax holiday bill into law that included $1.2 billion in tax breaks on a slew of items from diapers to mobile homes.

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