• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • About
  • Advertise
  • Submit News
  • Contact Us

Capital Soup

Florida News Straight From the Source

  • Featured
  • Leaders
  • Government
  • Industry
  • Education
  • Opinion
You are here: Home / Government / Biden’s Made in America Tax Plan Would Raise Taxes on Hurricane Ida Victims

Biden’s Made in America Tax Plan Would Raise Taxes on Hurricane Ida Victims

Posted on September 10, 2021

Hurricane Ida made landfall last week as a Category 4 storm that experts said might have been the strongest to hit Louisiana in 165 years. The storm caused power outages for over one million Louisiana residents. While Louisiana was better prepared for Ida after the devastation caused by Hurricane Katrina 16 years ago, the damage from Hurricane Ida remains in the tens of billions of dollars.

Given the damage caused by one of the first storms of what could be a devastating season, it is hard to understand the logic behind the Biden administration’s Made in America Tax Plan (MATP), which would raise insurance premiums, particularly for climate-related catastrophes.

In a new policy study, the R Street Institute examines how the MATP will increase the cost of insurance in the United States by at least $10 billion per year. Specifically, the plan would increase the corporate tax rate from 21 percent to 28 percent. This increase would then be passed on to U.S. insurers and homeowners, which means the average family in some states will experience increases of $250 to $450 per year. In addition, the plan would increase the cost of insurance indirectly, by raising the cost of reinsurance for U.S. insurers, who rely on global markets to diversify and transfer risk.

While these changes will affect the cost of insurance for all U.S. consumers, the price increases will be largest for those living in areas exposed to catastrophic climate events (e.g., hurricanes, earthquakes, tornadoes, floods and wildfires).

“The expected increase in the cost of insurance will be between $10.8 billion and $20.3 billion per year, depending on the tax rates ultimately chosen by policymakers. As these tax increases are passed through to consumers, they will effectively tax everyone who buys insurance, regardless of income,” said Jerry Theodorou, director of R Street’s finance, insurance, and trade policy team.

However, Biden’s plan reaches beyond the United States. The nation relies heavily on foreign reinsurance markets because of its enormous exposure to natural catastrophes. Bermudan reinsurance companies in particular are crucial to the United States’ ability to finance the costs of catastrophes, exacerbated from the impacts of climate change. In fact, markets in Bermuda and Europe have historically provided protection for severe natural catastrophes as well as man-made catastrophes, such as the 9/11 terrorist attacks. Bermuda (re)insurers alone covered more than 30 percent of the $100 billion insured U.S. losses caused by hurricanes Harvey, Irma and Maria in 2017.

When the price of insurance increases, fewer families will purchase insurance, increasing the costs paid by the U.S. government as disaster aid through the Federal Emergency Management Agency (FEMA). As we watch FEMA teams work around the country to deal with the impact of Hurricane Ida, we must seriously consider how much FEMA can achieve on its own as the frequency and severity of catastrophic storms continues to climb.

Share this article! Share on FacebookShare on Twitter

Filed Under: Government Tagged With: Hurricane Ida

Primary Sidebar

    Submit News    

Governor Ron DeSantis Highlights Largest Tax Relief Plan in Florida’s History

Record $2.7 billion of tax relief could save a family of four as much as $1,000 over the course of a … [Read More...] about Governor Ron DeSantis Highlights Largest Tax Relief Plan in Florida’s History

Governor Ron DeSantis and the Florida Cabinet Invest $103 Million to Conserve Vital Lands in Florida

Governor Ron DeSantis and the Florida Cabinet today approved the investment of over $103 million … [Read More...] about Governor Ron DeSantis and the Florida Cabinet Invest $103 Million to Conserve Vital Lands in Florida

Florida Preserves Historic Number of Agricultural Operations Through Rural and Family Lands Protection Program

The Governor and Cabinet today approved the preservation of approximately 18,279.38 acres … [Read More...] about Florida Preserves Historic Number of Agricultural Operations Through Rural and Family Lands Protection Program

Keep in Touch

  • Email
  • Facebook
  • Twitter

Newsletter signup

Stay in the loop! Subscribe to our weekly newsletter to receive a brief recap of the week's most popular stories.

Footer

News

  • Featured
  • Leaders
  • Government
  • Industry
  • Education
  • Opinion

About Us 

  • About
  • Advertise
  • Submit News
  • Contact Us

Keep in Touch

  • Email
  • Facebook
  • Twitter

Copyright © 2021
Terms & Conditions

© Copyright 2023 Capital Soup · All Rights Reserved ·