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Sun Sentinel: Lower rates, bold tax reform would benefit Florida economy

Wednesday, May 10, 2017

By Barney Bishop

It is no secret that high corporate tax rates are a drain on American businesses and an obstacle to job creation. In fact, the combined state and federal rate of 39 percent is among the highest in the world, keeping businesses in Florida and across the United States from competing globally and funneling money that could be used for expansion into the coffers of government instead. As someone who has represented Florida businesses, and who has built three businesses myself, I have seen the need for comprehensive reform of the U.S. tax system.

Fortunately, help could be on the horizon. There are many possible solutions to reforming the outdated U.S. tax code and bringing it closer in line with our international competitors. One of those is a blueprint put forward by House Speaker Paul Ryan and House Ways and Means Committee Chairman Kevin Brady. Called “A Better Way”, this bold, comprehensive plan would lower the corporate tax rate to 20 percent and reduce the tax rate for small businesses to just 25 percent, or the lowest rate for small businesses since World War II. The Ryan-Brady blueprint also ensures that all industries are subject to the same regulations and tax rates, protecting industry sectors such as energy production from punitive and unfair targeting by politicians.

The potential of the blueprint for unleashing our nation’s economic potential is considerable. The Tax Foundation, for example, finds that this new pro-growth, pro-jobs plan would bolster American GDP by 9.1 percent in the long run, raise wages by 7.7 percent, and create 1.7 million jobs for American workers. These are real benefits that will help Florida families and the industries that employ them.

The Ryan-Brady plan also includes important border-adjustment provisions that protect the global competitiveness of American businesses. Today, domestic exports often face discriminatory tax treatment by other nations, while imports to the United States are taxed very little or not at all. Border adjustments alleviate this imbalance by ensuring that exports and imports are taxed on equal basis, leveling the playing field for American producers. Jobs, revenue and U.S.-based manufacturing will increase dramatically using these border adjustments.

The reality is that our nation’s current tax code has been left unchanged for more than 30 years. During that time, other nations have lowered their tax rates, while ours has remained outdated and excessive. Other nations have levied taxes on goods crossing their borders, while we have allowed them to pass freely with little to no tax treatment. Combined, these oversights have driven businesses and jobs to foreign shores. American families and businesses have suffered. It’s time to reform our bad tax code and move toward a system that creates jobs and unlocks new opportunities.

As federal lawmakers consider how best to jump-start the American economy, they should strongly consider the Ryan-Brady blueprint as a bold path to a pro-growth, pro-jobs future. In addition to creating a more competitive tax code, the plan also would help ensure that fast-growing industries such as energy production continue to generate jobs and create opportunities. Florida, like all states, is counting on its voices in Congress to take swift and responsible action.

Barney Bishop is the immediate past president of Associated Industries of Florida and former executive director for the Florida Democratic Party.

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