TALLAHASSEE, Fla. – Tax watchdogs are sounding the alarm about a provision in President Joe Biden’s proposed tax plan that they’re calling a “hurricane tax.”
They warn without changes, property insurance rates could increase by more than a billion dollars statewide.
A new report suggests the average Florida family could see property insurance costs increase by as much as $319 a year under Biden’s recently announced tax plan.
“Everyone’s going to pay this,” said Dr. Lars Powell, director of the Alabama Center for Insurance Information and Research at the University of Alabama.
Powell authored the report. He said the 15 to 28 percent minimum global tax rate proposed in Biden’s plan could drive up costs for insurance companies, which would then be passed along to consumers.
“These things don’t happen in a vacuum. You can’t just say, well we’re going to increase your costs by 10-12 percent, but we don’t want you to increase your prices,” said Powell.
They’re calling it the “hurricane tax” because the impact would be felt most heavily in disaster-prone states like Florida.
“The president wanted to keep it, tax no one above $400,000,” said Florida TaxWatch President Dominic Calabro.
Calabro argued the cost would be felt by every Floridan, no matter their income level.
“This would severely impact people witth incomes substantially below $400,000 and be very much against the very foundation that President Biden said he wanted to enact,” said Calabro.
It’s projected the “hurricane tax” would drive up annual property insurance costs by $10 billion nationwide and as much as $1.6 billion in Florida alone.
“Everybody’s prices go up when insurance premiums go up because everybody’s got to buy insurance for something,” said Powell.
Fiscal watchdogs argued by either eliminating the global minimum tax rate altogether, or by creating an exemption for insurers, the increased costs could be avoided.
The tax plan is still in its early stages, and the groups we spoke with told us they’re hopeful changes can still be made prior to a final tax package being approved by Congress.