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Context Florida: Julio Fuentes, U.S. Must Revamp Tax System To Be Competitive Globally
Sunday, March 13, 2016
The Florida State Hispanic Chamber of Commerce represents more than 3 million Hispanics and has affiliations with 150 local Hispanic chambers in the Sunshine State.
Although this diverse group of business people and advocates don’t agree on everything, we are uniform in our strong belief in the need for a major overhaul of our nation’s outdated, overly complicated, and growth-killing tax code. That’s why we’re calling on our federal representatives and the current field of presidential candidates to make tax reform a priority in the halls of Congress and on the campaign trail.
Like businesses across the country—especially the small businesses that make up the backbone of our state and national economies, and represent 99 percent of all in-state businesses—Florida companies struggle to compete, grow, and create jobs with the heavy burden of U.S. taxes on their backs. If we want our country to return to real economic growth and a truly strong job market, our leaders in Washington, D.C., must reform the tax code—comprehensively, with a small business focus, and as soon as possible.
Today, U.S. companies pay the highest corporate tax rate among industrialized nations. That means that a significant portion of our primary global competitors enter the marketplace with a major competitive advantage. Because they face lower corporate taxes, their goods and services cost less, and are therefore more competitive. This in turn means that U.S. companies increasingly lose out on making sales and landing deals—meaning fewer jobs and slower growth back home.
At the same time, our tax code is a convoluted, contradictory mess that places another huge financial burden on our businesses in the form of time and money spent on tax preparation. The tax code is simply too complicated for non-experts to navigate—and changes so often, including 4,000 changes in just the past decade—so just about every business must either hire expensive tax preparation contractors or keep a tax professional on staff.
Either way, that adds up to a huge and unnecessary financial burden for businesses. And every dollar spent by a business on dealing with our burdensome tax code is a dollar that can’t be invested in more jobs, growth, and innovation. This money also further drives up the cost of American goods and services, making our companies even less competitive.
The entirety of the business community—including Hispanic-owned businesses here in Florida—would benefit from comprehensive tax reform. As long as we get it right. First, we must cut our business tax rate to a globally competitive level of 25 percent or lower. Second, we must scrap the current tax code and make it much simpler for both businesses and individuals. One shouldn’t need an advanced degree—or be forced to hire someone who has one—to do their taxes.
Like all Americans, Hispanics have many issues they feel are important. But polling shows that the economy—not immigration—is the top priority of this large and growing voter block. Politicians running for the White House or Congress would do well to keep this fact in mind. The candidates who support broad tax reform of the kind that helps small businesses grow and thrive will greatly help themselves with Hispanic voters on Election Day.
If we successfully implement tax reform, all U.S. businesses will hire more workers, generate more growth, and help shake the economy from its low-growth doldrums, underemployment, and low workforce participation. If we don’t, our nation and our state can expect years more of slow economic expansion, middling jobs numbers, and continued dissatisfaction among the electorate.
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Julio Fuentes is president and CEO of the Florida State Hispanic Chamber of Commerce. Column courtesy of Context Florida.