Florida's problem luring jobs isn't taxes — it's loopholes and lack of direction

Source: Orlando Sentinel

Florida's problem luring jobs isn't taxes — it's loopholes and lack of direction

Mike Thomas

COMMENTARY

10:37 PM EST, January 18, 2010

As our top political minds ponder the task of rescuing Florida's dying economy — a scary thought indeed — let me propose a good start: Sell the Florida Chamber of Commerce to Mississippi.

Maybe we could get a couple pounds of fried catfish for it.

The Florida Chamber has become a parody of itself, a sham outfit devoted to the Third Worldization of the Florida economy.

For public consumption it gives us grandiose reports on bringing Florida into the 21st century. Then, in the backroom, it resorts to its hayseed, parochial roots of promoting the stagnant status quo.

The chamber typifies what critics of President Obama say about him — great on the soaring rhetoric but sorely lacking follow-through.

Given that Republicans often get their economic talking points from the chamber, and their contributions from chamber members, we then get trickled-down, dumbed-down economic policy. This was in evidence last week at the great economic summit in Orlando called by legislative leaders.

Not surprisingly, the focus was on more tax cuts and less regulation. But taxes and regulation are not why Florida is wandering aimlessly in our financial desert.

Florida has less government than Somalia.

For every state regulator, there are five lawyers to get you around the regulations.

According to the Tax Foundation, a nonpartisan organization devoted to educating people about what they pay the government, Florida ranks 47th nationally in state and local tax burden.

There is a reason Tiger Woods lives here.

When it comes to business taxes, Florida ranks 45th nationally.

We are the nation's tax haven.

If lowering taxes and shrinking government were all it took to lure in high-wage businesses, we would be knee deep in six-figure nerds curing cancer and inventing 3-D interfaces for iPhones.

To get businesses, you need direction. You need smart taxes invested wisely.

Allow me to quote the Tax Foundation: "Good state tax systems levy low, flat rates on the broadest bases possible, and they treat all taxpayers the same."

Instead, Florida levies high tax rates on a narrow base of the economy. The chamber has been very much involved in pushing us in this direction.

It backed Amendment 1, against the advice of almost every economist and Florida TaxWatch. This property tax measure further exacerbated the distortion in property taxes created by Save Our Homes. It will further sabotage the economy by shifting even more of the tax burden on businesses, investors and new homebuyers.

The chamber has not supported closing sales-tax loopholes. One of these protects many Internet businesses from charging the tax, giving them an unfair advantage over local businesses.

Again, quoting the Tax Foundation: "A principled approach to (sales) tax policy calls for all … goods to be included in the tax base, to keep the base broad, rates low, and prevent distortions in the marketplace."

We give tax breaks to everything from ostrich feed to bottled water to Super Bowl tickets. We are one big, distorted mess, with legislators and special-interest groups intervening in the market by picking the winners and losers. It's almost as bad as the federal tax code.

And then, to lure in new businesses, we distort things even more with tax incentives just for them.

Our economic model is based on giving every member of the chamber its personalized tax break, and then bribing other businesses into moving here with their tax breaks.

Florida needs a good, equitable business climate for all.

And if you believe the chamber reports, it needs modern infrastructure, an educated workforce, a good quality of life and, most of all, top-flight schools from pre-K classrooms to university research programs.

Most recently, the chamber signed on to a Council of 100 report calling for major reforms and big investments in education, which include doubling university funding in the next five years.

It is an excellent report. As we've seen in states from California to North Carolina, quality universities are major economic engines.

Full speed ahead, says the chamber, while at the same time demanding more special-interest tax cuts and devoting itself to the proliferation of more rampant growth.

It would be nice to see the chamber stand behind its words, to stand up for equitable, conservative tax policies capable of funding the things it says we need.

For once, I'd like to see the Florida Chamber of Commerce put up or shut up.

Mike Thomas can be reached at 407-420-5525 or mthomas@orlandosentinel.com.

Copyright © 2010, Orlando Sentinel