As has been the case so many times in recent history, the election in Florida might be the most important race to watch this year. The race for governor is a proxy battle that pits a former congressman endorsed by Donald Trump against a current mayor endorsed by Bernie Sanders. Indeed, a Trump versus Sanders battle was what many expected to see in the 2016 presidential election and may very well see in the future.
The candidates for Florida governor, Republican Ron DeSantis and Democrat Andrew Gillum, are running on vastly different fiscal policy agendas in a race that could give us insight into what to expect in 2020. Like Trump, DeSantis largely adheres to the Rick Scott and Jeb Bush principles of cutting taxes wherever possible, getting taxpayer dollars back in the hands of people, and reaping the economic prosperity.
{mosads}DeSantis has proposed reducing or eliminating two relatively unknown, but highly anticompetitive, taxes. These are the communications services tax and the business lease tax. The communications services tax is among the highest in the country and Florida is the only state that has a business lease tax. DeSantis has also proposed further cuts to the state corporate tax rate. The principles behind his policies have been a huge factor in the economic success in Florida, with close to two million new jobs and a $1 trillion economy over the last eight years. The themes of cutting taxes and backing small business activity is clear.
By contrast, Gillum has set an agenda that closely mirrors the views of Sanders. Among the proposals by Gillum are massive hikes in the state corporate tax rate, public health care, a $15 minimum wage, and government mandates on teacher salaries. While countless books have been written on the fantasy versus reality of these atrocious ideas, we can focus on the ultimate arbiter of what drives policy, which is taxes.
A recent analysis from the James Madison Institute,a think tank based in Florida, brings a healthy dose of economic reality to the “pie in the sky” fantasies of Gillum. He may mean well, but we live in the world of hard economic facts. The study is loaded with facts that throw cold water on his proposals. His tax plan has no hope of being enough to fund even a portion of what he would like to spend. The proposals Gillum has offered to pay for his big government agenda fall billions of dollars short.
Economists examine not just what is in the frame of the snapshot, but the entirety of the surrounding landscape. Enacting the proposals by Gillum would require either a massive hike in the state sales tax to levels that would cripple low income families or, heaven forbid, the imposition of a state income tax on all Floridians. Those are the facts. If his proposals somehow pass, the effects on the economy would be an unmitigated disaster. Our analysis indicates Florida would stand to lose more than 155,000 jobs and north of $28 billion in economic activity every year.
States should be the laboratories of democracy, but when experiments fail, policymakers around the nation must take note. From Illinois to New York to New Jersey to Connecticut and more, we find that each and every time our elected leaders pursue high tax agendas, everyday working people foot the bill and the economy suffers. Florida should not make that mistake. It should continue to pursue a favorable small business fiscal agenda with low taxes and reasonable government spending levels.
Brandon Arnold is executive vice president of National Taxpayers Union and Sal Nuzzo is the vice president of policy at James Madison Institute.