New estimates for Ida
President Joe Biden’s Made in America tax plan would be a “hurricane tax for Floridians”, a former Florida US representative has warned.
The administration’s Stopping Harmful Inversions and Ending Low-Tax Developments (SHILED) provision proposes a new minimum tax rate of between 15% and 21% on international companies. That would hit the global reinsurance industry, Dennis Ross, who served in the US House of Representatives from 2011 to 2019.
Ross pointed to research by public policy researchers at non-profit R-Street Institute suggesting the new taxes could increase Florida property insurance premiums between $639 million and $894 million.
“The administration claims these taxes will incentivise businesses to reinvest in America, which is a worthy notion. But unfortunately, Florida homeowners will end up paying more in property insurance costs because of SHILED’s grand gesture,” he wrote for local newspaper The Ledger.
“[T]he international reinsurance market is a cornerstone of Florida-based and nationally based insurers. Florida homeowners cannot afford this unnecessary increase,” he added, noting that 32 of the 38 top reinsurers providing coverage in Florida are currently internationally based companies.
“As hurricanes become stronger and appear more often, our leaders should ensure our state’s homes and businesses are protected during and after catastrophe, and the Made in America tax plan will only cause further harm.”
His call for a rethink follows that of Carolyn Johnson, senior director of business, economic development and innovation policy, at the Florida Chamber of Commerce. Last month, Johnson wrote in the Orlando Sentinel that the proposal “would be the latest nail in the coffin for Florida’s property insurance market”.
“If approved by Congress, this tax increase could mean that insurance companies purchase less protection from reinsurance companies. And if that happens, that means the multiple billions of dollars of insurance claims from multiple hurricanes could be paid solely by Florida insurance consumers when currently that risk and cost is diversified globally,” she wrote.
SHILED, Hurricane Tax, Catastrophe, Insurance, Reinsurance, Dennis Ross, Carolyn Johnson, North America
New estimates for Ida