Sunshine Sentinel

Homeowners in Florida could see a significant hike on their property insurance rates should President Joe Biden's "Made in America" tax plan get approved by lawmakers in Washington, D.C.

The Biden administration has touted the plan, but recently details revealed that if it passes in its current form it might increase the financial burden for Florida homeowners, according to an opinion piece in NWF Daily News. Florida homeowners could see up to a 13% increase on their property insurance rates that would account for more than $1.6 billion throughout the state because of a "hurricane tax" provision, according to a study released by R Street.

"By no means is passage a foregone conclusion," Jerry Theodorou, R Street Director of the Finance, Insurance and Trade Policy Program, told the Sunshine Sentinel. 

R Street's study also found that under the tax plan the cost of insurance would go up for everyone in America. The report pointed out that if insurance rates rise, it's likely that fewer families would invest in the insurance, which would increase expenditure costs for the federal government through their Federal Emergency Management Agency response. Theodorou said the bill still needs to overcome a few hurdles. 

"Among obstacles are a Senate Republican effort to characterize the change as treaty, which would require an impossible-to-achieve 67 votes," he said. "What is more, three Democratic representatives have signaled opposition to changes to international taxes 'at this time.'"

According to the study, the Made in America Tax Plan would raise the cost of insurance in the U.S. by $10 billion annually. It would also increase the corporate tax rate to 28%, which is far above the recently-agreed-upon international minimum of 15%. It would also increase the cost of reinsurance, which many Floridians depend on to recover from hurricane-related damage, essentially taxing victims of hurricanes more while decreasing their ability to diversify investments to minimize the risk.

"It is impossible to climate-proof a home in a catastrophe-prone area 100% unless you live in a concrete bunker, but we are also not completely at the mercy of the elements," Theodorou said. "Floridians will continue to get buffeted by storms. That's a given. Those who take measures will fare better, and that's for sure."

 The Tax Policy Center found that the plan would impact 80% of Americans with an increase on after-tax income next year, according to The Washington Post. The Tax Foundation's calculations differed, but had similar results.

In the opinion piece for NWF Daily News, Former state Rep. Don Brown wrote that as the state continues to recover from the pandemic "the last thing Floridians need right now is a huge tax increase thanks to the federal government."

Garrett Watson, a Tax Foundation policy analyst, told the Washington Times much of the increased cost could be endured by insurance company shareholders.