TBO.com - TBO is Tampa Bay Online

Lily-Livered Lawmakers Fail To Give Business A Fair Shake

ADVERTISEMENT

The Tampa Tribune

Published: May 2, 2008

The guiding philosophy among Republican lawmakers in Tallahassee is "no new taxes." That message has led to more tax cuts for longtime homeowners and the threat of a higher tax load for businesses.

Confronted with obvious inequity, lawmakers remain afraid of any change that might violate the simplistic slogan.

One unfortunate result is higher taxes for in-state businesses than for out-of-state firms that sell by mail. The Legislature continues to refuse to try to collect taxes on Internet and catalog sales, though it doesn't miss a dime of taxes owed by in-state retailers.

Florida has taxed mom-and-pop motels nearly out of existence.

It allows multistate companies to shelter profits in low-tax states, while levying income taxes on Florida companies at the full rate.

A proposal going before voters in November would eliminate the state-required portion of property taxes for schools, which would benefit businesses as well as homeowners. But the plan raises a possibility that the state will levy higher taxes on sales, or even add a broad and painful tax on services.

"Florida, while being a relatively low tax state for individuals, ranks among the top states in business taxes," according to Florida Associated Industries, a pro-business group.

They're right, and the climate is not improving. Congress wisely decided to give an economic stimulus to business - a higher deduction for depreciation. In Florida, lawmakers snapped shut the blinds on that small ray of economic sunshine.

Instead of allowing businesses to piggy-back state tax returns on their federal filings, Florida makes businesses figure their state tax bill separately, minus the federal tax cut. Florida TaxWatch estimates the maneuver will gain the state $146.8 million in revenue. Because it's not a new tax, lawmakers, most of whom have never run a business, don't see the problem.

A business-neutral proposal to raise the tax on a pack of cigarettes by $1 to help pay for medical care for the poor seems to be going nowhere because it is considered a new tax. Perhaps adding $1 to the 34-cent tax is too much, but adding 50 cents would be a reasonable compromise to raise revenue for unavoidable Medicaid expenses.

Here's how Senate Majority Leader Dan Webster of Winter Garden dismissed the cigarette tax: "If something's bad, outlaw it. Don't use taxes to limit it or pull it down."

Webster is just blowing smoke. The state taxes business income, though it doesn't want to outlaw business. And it taxes gasoline, though it doesn't want people to stop driving. With logic like Webster's, no wonder businesses are worried about next year, when state revenues might fall even more.

The fear is that services such as legal work and accounting will be taxed, which will cause these services to be outsourced to other states. Advertising could be taxed, too, which would hurt Florida newspapers already struggling with ad revenue lost to the Internet.

The tax uncertainty is damaging. Barney Bishop, head of Associated Industries, says, "For those businesses that are already here or are looking to expand, they will put their plans on hold until 2011, when they can ascertain whether the new taxes will adversely affect their business. This will significantly hurt our state's economy at just the wrong time."

Florida needs a tax policy that encourages business to expand and treats in-state and out-of-state business the same. A smart Legislature would understand that not every old tax is good and not every pro-business reform is bad.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT