FL Business Leaders Weigh In On POTUS Candidates' Economic Plans
The major party presidential candidates are offering two starkly different courses for the country ahead of Election Day. The contrast is particularly acute in their economic plans.
A little over a week ago, more than eighty million Americans tuned in to the first presidential debate. And many didn’t want to watch at home.
At the Tallahassee bar Waterworks, Mondays usually mean movies on the patio, but the debate took precedence. Republican Donald Trump and Democrat Hillary Clinton disagree on many points, and one of the most important of those disagreements—at least in pocketbook terms—is their economic visions. And for Tom Bevilacqua the debate didn’t do much to illuminate their plans for one of the most central economic issues: taxes.
“Not really, no, I guess not,” he says. “Because at the beginning I think they—again, they talked about in the broad strokes.”
But for economist Alan Cole the topic—if not the choice—is a bit clearer.
“There are issues with both candidates’ plans,” he says. “Both have some good ideas, but also there are some things where both of them need work.”
Cole works for the non-partisan Washington D.C. research group The Tax Foundation.
“We look at just their tax proposals, and we think about how they’ll affect the provision of labor and capital,” Cole explains.
In theory, if income taxes are low labor should increase, and if corporate taxes are low, business investments should rise as well. But the economy is a complicated system, with a whole host of other factors at play, so that model hasn’t always worked out perfectly in practice.
“Now with Donald trump’s plan there’s a lot of reductions in taxes and that helps by this measure,” Cole says, “and with Hillary Clinton’s plan there’s some increases in marginal tax rates and that harms her on this measure.”
Trump wants to prune the seven existing tax brackets to three, cut income tax rates, and drastically reduce corporate rates from 35 to 15 percent. Meanwhile, Clinton would institute a five percent surtax on the highest earners, a 30 percent minimum tax known as the Buffet Rule for million dollar earners, and a new formula for capital gains.
But Cole is quick to point out an important caveat—the higher taxes in Clinton’s plan could support projects that will boost the economy, and the lost revenue in Trump’s plan could require major cuts.
“So once you take the analysis to the next step and look at their spending plans, whether they add up or don’t and that kind of thing,” Cole says, “there Hillary Clinton might be able to make up a lot of ground by promising investments in things like infrastructure or education.”
And for Clinton supporter Maryann Ferenc, owner of Tampa’s Mise en Place hospitality group, it’s those potential investments that make Clinton’s plan better for Florida’s businesses and workers.
“Well in our business in particular,” Ferenc says, “which is related to our larger industry as well, such things as the infrastructure investments are going to have a substantial impact for us.”
She says improved infrastructure could benefit her industry in two ways.
“Delivery is really important and the continuing cost of how we get products from one pace to another, and how that effects our bottom line because it really does, as well as the fact that we’re in the travel and tourism industry,” she says. “And so having travelers in our community and in my establishments has a huge impact on our bottom line.”
Ferenc doesn’t believe the trickle-down model favored by Trump will spur growth in the wider economy. But Trump supporter Christian Ziegler, COO of an automotive marketing company called Dealers United in Sarasota, believes those cuts do support growth—he says his boss is the perfect example.
“The Bush tax cuts for example, where they put more money—he had more access to the money that he worked hard to make,” Ziegler says. “And he used that money to reinvest and essentially create the company that I’m running now. We have about 15 employees.”
“This company may not exist if those tax cuts were not put in place.”
He says Florida will benefit if Trump is allowed to do that again.
“I think when you look at Donald trump’s proposal,” Ziegler says, “that’s exactly what he wants to do is he wants to empower business owners, entrepreneurs, individuals looking to create a business rather than just giving that money to the government.”
If this sounds like the same argument that’s been playing out for decades, it is—just stretched to its extreme. And back at Waterworks, Bevilacqua says perhaps that rigidity, the rehashing of an old debate with new numbers and different policy proposals, is a natural consequence and maybe even a benefit of the two party system.
“The reason we have political parties is so you know you can at least have that sense of where on the spectrum someone stands,” he says.
Florida voters have only about a month to decide where they rest on that spectrum.