For the past few weeks, the Orlando Sentinel has exposed how corporations exploit loopholes and manipulate easily influenced politicians to avoid paying taxes in Florida.
The stories help explain why you shoulder so much of Florida’s tax burden.
See, someone always pays. And when a corporation dodges taxes, the state’s funding needs don’t magically evaporate. Roads still need to be paved. Teachers still need to be hired.
So either you end up paying more (often through fees, like higher driver’s license costs) or the state just doesn’t properly fund needed services. Or both.
That may sound stinky to you. But it works well for some big businesses.
So business interests and lobbyists are now firing back at the Sentinel’s “Big Profits, Tiny Taxes” series that exposed the realities of Florida’s tax system — and how only 1% of Florida businesses pay any corporate taxes at all.
Last weekend, the CEO of the Florida Chamber of Commerce penned an op-ed that basically suggested you ignore all the pesky facts and data the Sentinel has unearthed. That kind of reporting, the Chamber said, “seeks to advance socialism.” Instead, you were urged to honor the state’s “job creators.”
The piece by Chamber CEO Mark Wilson was titled “Low taxes is why Florida’s successful – let’s keep it way.”
To prove that Florida’s low corporate taxes pay off, Wilson began his piece this way:
“Florida is fortunate to be home to 19 Fortune 500 companies …”
Let’s stop there.
Nineteen, huh? I guess you were supposed to be impressed.
Like maybe you’d think: Holy cow, 19! That seems like a lot! We absolutely should keep letting companies off cheap, because it really pays off!
Except here’s the reality Wilson didn’t share with you: Nineteen companies in a state the size of Florida is bloody pathetic.
There are more Fortune 500 companies in a single metro area: Houston.
There are more Fortune 500 companies headquartered in states half our size; states like Ohio and Virginia.
Florida ranks third in population, yet ninth in Fortune 500 companies.
This would be like Disney crowing that it was the third-most-popular theme park in Orlando.
Most important, on a per capita basis — the fairest way to compare states — would you like to guess where Florida ranks among the top 20 states for Fortune 500 companies?
Dead last.
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We are the only one of those states with less than one Fortune 500 company for every million people living here.
This proves that Florida’s low corporate collection rate doesn’t prompt major companies to move — or grow — here.
You know what does?
A ready workforce. Good schools. An enviable quality of life.
A piece on Entrepreneur.com recently cited five reasons businesses might relocate. None of them were tax rates.
Labor availability? Yep. Quality of life? You bet.
Not taxes.
The National Federation of Independent Businesses also offered “5 Reasons to Relocate Your Business.” Again, none of those reasons were taxes.
That’s just for relocating. A better way to get Fortune 500 companies is to grow them. The places that do so successfully invest in education and entrepreneurship … not in allowing corporations to ship profits out of state so they can dodge their tax bills.
It’s also worth stressing that the companies Sentinel reporter Jason Garcia has featured for avoiding taxes aren’t headquartered here.
They are out-of-state companies like Mastercard, Dr. Pepper and eBay. They don’t need tax breaks to be encouraged to do business here. They do business most everywhere for a simple reason — to make money.
Yet Florida politicians check their brains and Econ 101 textbooks at the door and do these companies’ bidding. They think being “pro-business” means doing whatever corporate lobbyists ask.
I told Wilson that I studied his Fortune 500 statistic and learned that Florida actually stinks — quite badly, in fact — based on the metric he cited.
That’s when Wilson told me that looking at numbers per capita — a standard way statisticians and groups like the U.S. Census Bureau often do because it’s the only apples-to-apples way to compare states — “isn’t something economic developers tend focus on.”
I see. Stupid me.
Wilson then redirected. Instead of focusing on Fortune 500 companies (again the metric he cited as evidence that low corporate taxes pay off), he now suggested I focus on another metric: job creation.
With the goalposts now moved, Wilson noted that Florida created about 900,000 jobs over the past five years.
He’s right that’s a big number. Florida has a lot of jobs … a lot of low-paying jobs.
In fact, we are cellar-dwellars, ranking in America’s bottom quartile.
The cost of living in Florida is about average. Wages are not.
Orlando ranks dead last in median wages among America’s 50 largest metros.
Leaders in some states chase high-wage jobs. Here, governors attend ribbon-cuttings for convenience stores.
Rick Scott celebrated Slurpees at 7-11. Ron DeSantis shoveled dirt at Buc-ee’s.
So yeah, we added another 200 clerk positions to our “jobs” total. Whoop-dee-doo.
Other states set their sights higher.
They invest in their state. They collect reasonable taxes from companies that profit there so that residents shoulder a lower burden.
And the end of the day, most of them still managed to kick our tail on the Fortune 500 list … per capita, of course.
