IN CASE YOU MISSED IT
In a recent op-ed published by the Tallahassee Democrat, Brewster Bevis, President of Associated Industries of Florida, raises an alert about a provision in the proposed federal “Made in America” tax plan that will raise property insurance rates for all Floridians, many of whom are still dealing with financial hardships associated with the pandemic and past storms.
Bevis cites forecasts included in a recent study by the R Street Institute that project property insurance costs in Florida would increase between $864 million and $1.62 billion a year. This translates to approximately $300 more a year in property insurance costs for Florida homeowners and business owners.
Equally troubling is a potential unintended consequence of Floridians choosing not to buy property insurance because of the skyrocketing costs. Bevis says this “would put financial strain on FEMA and other government programs – and expose those uncovered to possibly catastrophic losses of their homes and businesses if a major storm destroyed their property.”
With stronger and more frequent storms threatening Florida’s coastlines, and an economy trying to recover from the pandemic, Bevis argues this is the worst possible time to pass costs on to Florida consumers.
The full opinion piece is linked here and pasted below.
Hidden ‘hurricane tax’ will hurt Floridians at all income levels | Opinion
Associated Industries of Florida has been around for more than 100 years. During that time, a lot has changed in our beloved Sunshine State. One hundred years ago, the state’s population was under 1 million, and nobody even knew who Walt Disney was.
But not everything has changed – summers are still impossibly humid, we still have hurricanes, and we still see politicians try to sneak through taxes that end up harming businesses and consumers.
It’s why AIF strongly opposes the so-called “hurricane tax,” a provision in President Biden’s tax plan that will surely raise insurance rates on Floridians already reeling from past storms and the pandemic.
In hurricane vulnerable Florida, property insurance has been an issue of keen interest to AIF as a priority. Our founding principles include this lofty commitment: “to advocate fair and equitable legislation affecting the welfare of its members or of business and industrial activities of the state as a whole.”
That translates today to this truth: This hurricane tax isn’t fair, and it hurts the welfare of our state.
The Biden proposal is tied to the taxes imposed on what’s called “reinsurance.”
Here’s how it works: Insurance companies buy reinsurance on high-risk policies, often on the international market. In the case of Floridians, high-risk policies include those in hurricane-prone areas. Under the Biden plan, taxes on this reinsurance would increase – which would, inevitably, be passed down to property insurance consumers.
How much money are we talking about?
A recent study by R Street Institute shows the devastating impact of this hurricane tax on the Florida economy and state residents. R Street forecasts property insurance costs in the Sunshine State would increase between $864 million and $1.62 billion a year. This would result in hundreds of dollars a year in additional insurance costs for Florida businesses and homeowners.
One unintended consequence of this tax increase would be to cause some Floridians to choose not to buy property insurance, which would put financial strain on FEMA and other government programs – and expose those uncovered to possibly catastrophic losses of their homes and businesses if a major storm destroyed their property.
While the White House has vowed that no one earning less than $400,000 a year will be affected by the tax plan, the hurricane tax would break that promise by affecting people at all income levels.
You don’t have to go back to the decade of our founding to find a history of powerful hurricanes in Florida – from Andrew to Charlie to Michael, all areas of our state have been impacted in recent history. And that means that all Florida property owners are vulnerable to this hurricane tax proposal.
With climate change-fueled storms apparently on the rise and the Florida economy valiantly struggling to overcome a pandemic, the absolute last thing we need is hundreds of dollars in new insurance costs being passed down to consumers via bad tax policy.
That was true 100 years ago, and it’s still true today.
The solution is for members of Congress to resist this overreach of the Biden administration and to protect business owners and homeowners from the hidden hurricane tax.
Brewster Bevis is the president of Associated Industries of Florida and will become its CEO on Jan. 1, 2022.