House Panel Approves Tax Cut Package

Feb 3, 2016

Governor Scott promoted his tax plan with cornhole Wednesday.
Credit Nick Evans

House lawmakers approved a wide-ranging tax plan Wednesday.  The House package would cut just shy of one billion dollars in taxes.

Just ahead of Wednesday’s House Finance and Tax Committee meeting, Governor Rick Scott hosted a rally in support of his tax cut plan. 

With corn hole. 

“First off it’s going to be fun, I’m going to—I get to play with a variety of individuals but we’re all focused on how do we get more jobs in this state,” Scott says.  “More jobs.  We want more jobs in this state.  The way we’re going to get more jobs is keep doing what we’ve been doing.”

“We’ve cut taxes fifty times in the last five sessions, and what’s happened?  Our revenues are growing.”

The governor and his allies are pushing for three main cuts: elimination of the sales tax on machinery, reduction of the commercial lease tax, and removal of taxes on corporations in the retail and manufacturing industry.

“It’s unfair that our businesses are the only state where you pay a tax on commercial lease,” Scott says.  “That’s absolutely unfair, we need to start the process of getting rid of that.  If we want more manufacturing jobs, cut their sales tax on machinery and equipment.  Cut their income tax so we get more manufacturing jobs—the same thing for retailers.”

That last bit is the most expensive part of the wish list—worth almost 390 million dollars in the coming fiscal year.  But lawmakers appear poised to move forward without it.

House Finance and Tax Committee Chair Matt Gaetz’s (R-Shalimar) proposal drops the corporate income tax cut and instead uses some of that money to fund a handful of smaller, more targeted cuts.  Those include temporary cuts or exemptions for book fair purchases, hunting and fishing equipment, data center materials, and phones or computers.

Critics of the governor’s tax plan argue it focuses too heavily on helping businesses, at the expense of everyday Floridians.  But even with the laundry list of smaller cuts in Gaetz’s measure, Miami Democrat Jose Rodriguez raises the same complaint about the House plan.

“This amendment is a title amendment, the current title of the bill is an act related to taxation,” Rodriguez says, “this would change the title to an act relating to corporate welfare and minimal assistance to families.”

And he objects to the measure’s inclusion of numerous unrelated cuts in one bill.

“You know we’re dealing with a piece of legislation that deals with subjects ranging from pear cider, to rent, to research and development, aviation fuel,” Rodriguez rattles off.  “The number of policy areas and policy outcomes that we discuss and are contained in this one piece of legislation really are the definition of logrolling.”

All said and done, the House plan comes in at just over $990 million, but not all at once.  In year one, it’s worth about $350 million—the largest part of that going to reductions in the commercial lease tax.  The committee received plaudits from the business community for cutting that tax.  But AFLCIO lobbyist Rich Templin wants to poke a hole in the theoretical underpinnings of the governor’s and Legislature’s push for reducing taxes.

“There’s a Latin phrase ‘post hoc ergo propter hoc,’” Templin says, “it means the false cause fallacy.  Just because something happened before something else doesn’t mean that it caused it.”

“Revenues have gone up in this state because the economy improved.  76 percent of all of our revenue comes from sales taxes,” he continues.  “As economic activity in the consumer markets has increased our revenue has gone up.  It has nothing to do with the corporate centered tax cuts that we’ve passed over the last few years.”

Gaetz gained approval for the plan—without having to change the name.  It heads next for the House floor.  

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