Sweetheart deals for big companies aren't what Florida needs | Opinion
As Gov. Ron DeSantis takes office, he’s inheriting a strong economy. Florida boasts an unemployment rate well below the national average and the eighth-fastest economic growth rate in the country.
But instead of focusing on continuing the policies that have grown Florida's economy, the new governor is considering several foolhardy plans to attract new businesses — plans that’ll only help special interests.
On the campaign trail, he proposed offering tax breaks to specific companies willing to relocate to Florida. He famously used this tactic to try to woo the Trump Organization to move to Palm Beach while at a rally with President Trump himself. But when state and local governments give special favors to individual companies, it often fails to benefit the whole state.
In 2017, former Wisconsin Gov. Scott Walker gave the Taiwanese manufacturing company Foxconn an astounding $4.1 billion in subsidies to build a new factory. Foxconn promised the project would create 13,000 jobs for Wisconsin residents, but it seems many of those jobs won't actually materialize. Wisconsin will get only one job for every $230,000 to $1 million the state gave the company in taxpayer-funded subsidies.Another form of corporate welfare is making a comeback in Florida: film industry tax credits. A resurgence in support for reintroducing Florida’s film subsidy program after its 2016 termination has swelled up. The newly elected governor should resist the urge to give handouts to Hollywood.
It’s hard to think of a more wasteful use of taxpayer money. For every dollar the state gave to film production companies, the state economy only grew by 18 cents. Even worse, an analysis from the University of Southern California found that film tax incentives nationwide have had a minimal — even negative — impact on economic growth.
Film tax credits can hurt a state's economy because of their opportunity cost: subsidies reallocate money away from successful businesses and toward pet projects. Furthermore, a report from Michigan's state senate found that each job created by film tax incentives only lasts an average of 23 days. Expanding film tax credits would enrich production companies, not grow Florida's economy.
Florida doesn’t need tax gimmicks to drive economic growth. Florida's tax code is already one of the most business-friendly in the country; the nonpartisan Tax Foundation ranked Florida at fourth in its 2019 State Business Tax Climate Index.
Still, there are some tweaks that state legislators could make to the tax code. For example, they could get rid of Florida's additional sales tax of 14.83 percent on wireless service. Arbitrarily taxing cellphone plans more than other purchases doesn’t make economic sense, and the burden of this tax disproportionately falls on low-income families.
Yes, lower taxes are vital to building a state's economy. But Florida already has a pro-growth tax code, and many of these proposals from DeSantis and others aren't tax cuts. They're just payouts to special interests that won't help the average Floridian.
As governor, DeSantis needs to reject corporate welfare and put the people of Florida first.
Alex Muresianu is an economic policy writer for Young Voices and a former research assistant at the Tax Foundation. Follow him on Twitter @ahardtospell.