With just a month left before the Florida primaries, Republican candidate for governor Adam Putnam accused rival Ron DeSantis of backing a massive tax increase that would hurt Florida’s economy.
Set to suspenseful bluegrass music, the ad from Putnam’s Florida Grown political committee warns that a DeSantis-backed sales tax hike of 23 percent would touch everything from the market to the beach.
"What would a 23 percent sales tax do to Florida’s economy? If Congressman DeSantis had his way, everything would cost 23 percent more — groceries, gas, home purchases," the ad says. "Congressman DeSantis sponsored legislation to increase sales taxes by 23 percent, hurting families, destroying jobs, devastating tourism."
DeSantis did support a bill that proposed introducing a 23 percent federal sales tax, but the ad fails to mention an essential component of the plan: all other federal taxes, including income tax, would be eliminated.
The ad shows a copy of HR 25, a bill known as the Fair Tax Act. A version of the bill has been introduced in Congress 10 times since 1999, earning support from prominent Republicans Mike Pence and Mike Huckabee.
The idea behind the Fair Tax Act is to introduce a 23 percent federal sales tax that would replace other federal taxes. The bill eliminates income, estate, payroll and gift taxes, as well as the Internal Revenue Service itself.
Supporters of the tax argue that even though purchasing items would be more expensive, consumers would be able to keep more of their income, and therefore have enough purchasing power to maintain the same lifestyle. Businesses would also save money, which would ideally lead to lower prices and more jobs.
Libertarian radio host Neal Boortz, who co-wrote "The FairTax Book," responded to Putnam's ad with a tweet: "If you are having trouble understanding the FairTax, perhaps you ought to comment me. I wrote the book." He followed up, "The Adam Putnam campaign is LYING THROUGH ITS TEETH … and they know it."
Critics of the bill say that this would be a regressive tax plan, where poor and middle-class families pay more than wealthy households. The sales tax would apply to every purchase, even essentials like food and shelter, which comprise a larger portion of a low-income earner’s budget.
There’s a lot of debate about the best-case and doomsday scenarios that could go down were the Fair Tax to become a reality.
The bill might, for example, have a major impact on vacation destinations like Florida, which leans on tourism and its state sales tax. According to Jon Hamilton, finance professor at the University of Florida, higher sales prices would incentivize foreign tourists to visit cheaper destinations instead, like Cuba or the Bahamas.
Steve Hayes, Americans for Fair Taxation president, says that the Fair Tax might actually cause prices to go down; because businesses would no longer have to pay payroll taxes, they could afford to cut prices overall.
Because the ad is so skimpy on details, viewers could guess that DeSantis will push for the changes of the Fair Tax Act to be applied at a state level. Florida’s sales tax is 6 percent.
DeSantis has not pushed for this as a candidate for governor. The plan does not appear in DeSantis’s campaign materials. Spokesman David Vasquez said, "The Fair Tax plan is a federal proposal. He’s running on low taxes and limited regulation in Florida."
The ad said, "Congressman DeSantis sponsored legislation to increase sales taxes by 23 percent."
The ad distorts what DeSantis sponsored in a few ways. It completely leaves out that the same plan would have eliminated almost all other federal taxes. And by only mentioning "sales taxes" in the context of Florida’s economy, the ad creates a misleading impression that DeSantis wants the state’s 6 percent sales tax to skyrocket by that amount.
The statement contains an element of truth but ignores critical facts, leaving voters with the wrong impression. We rate this claim Mostly False.