A cornerstone of Tallahassee Mayor Andrew Gillum’s campaign for Governor is his plan to raise corporate taxes. He would use the additional revenue to raise teacher salaries to $50,000 annually.
Political campaigns are often full of overhyped, aspirational promises. Here is one certainty: if elected, Gillum will never get his tax plan approved by a Republican legislature. Period. This is a political reality confirmed by the man who will be the next President of the Florida Senate – Bill Galvano. “I do not see this happening. I do not believe Andrew Gillum is going to become Governor, and I do not think this is an issue we will be dealing with,” said Senator Galvano. “Campaign talk is a lot different from reality. We have to deal with reality in the Legislature. The reality is that increasing the corporate income tax would be a dramatic step backward for Florida and would certainly send the wrong message to private sector businesses that create the jobs Florida families rely on.”
Even if a “blue wave” hits Florida in November, Republicans are still certain to control the State House and most likely the State Senate. Gillum want to raise the current corporate tax rate from 5.5% to 7.7%
“As Governor, Mayor Gillum wants to invest $1 billion into our public schools, students, and teachers, building an education system that leads the nation instead of being at the bottom of the pack,” said Geoff Burgan, Gillum campaign spokesman. “To do so, Mayor Gillum is asking our state’s richest corporations to pay their fair share so our children can have the high-quality public education they deserve”
Mayor Gillum’s campaign says it’s not really a tax increase because of the tax cuts passed by the federal government. But that explanation sounds like Washington, D.C. accounting. In essence the Gillum explanation is – the tax cut is still a cut just not as much as you were first promised. In reality tax increases get passed down from the company to the consumer resulting in higher prices for goods and services. The Florida Chamber of Commerce calls that “Economics 101.”
“Policies that sound too good to be true generally are,” said Edie Ousley, Vice President at the Florida Chamber of Commerce. “Keep in mind that Florida has lowered taxes over 50 times in the last eight years which is one reason our economy is growing and the state is receiving all-time record revenues. We need to keep Florida’s momentum going, not fall for gimmicks that haven’t worked in California, New York or Illinois.”
Not only could Gillum’s corporate tax proposal directly impact the “everyday Floridians” he hopes to avoid, it could also slow down the state’s economic growth. Gillum’s tax plan would give Florida higher corporate taxes than 31 other states including all states in the Southeast and New York. The southern states are competitors with Florida and economists say that could have a negative impact on the state.
“The result will be to make Florida slightly less business-friendly, and make out-of-state locations more attractive, which will cause slower economic growth in Florida,” said Dr. Randall Holcombe, economist and Florida State University professor. “In the long run, all Floridians will bear the burden of a tax increase like this because it will slow the state’s economic growth. Slower growth will also erode the revenue-generating potential of the tax increase.”
With legislative leaders balking at the Gillum plan and business leaders and economists warning it could be harmful to Florida’s economy — why propose it? Politically it works for Gillum. It excites his liberal base and gives teachers the impression that he’s fighting for them. It also gives his Republican opponent, Ron DeSantis, an issue that is in stark contrast with Gillum. DeSantis, who has taken a no tax increase pledge, is already pounding the Tallahassee Mayor on the tax proposal. So while it’s likely never to pass, it’ll be a major focus of both campaigns these next 50 days.