Cynics that we are, we can’t help but look at Gov. Charlie Crist’s tax-cutting proposals last week as another example of Florida’s Head Populist scrambling to buy votes.
It would be much nicer, of course, to hail the governor for offering a real conservative legislative agenda and budget that will stimulate Florida’s creaking economy.
But, nah, we’ve watched Charlie Crist for 20-plus years. This is all about votes.
At a pre-legislative meeting with the Florida’s press corps last week in Tallahassee, Crist said he is proposing to cut Florida’s corporate income tax 18% — from 5.5% to 4.5%.
Oh, then there’s the fine print. The cut would apply only to the first $1 million in pre-tax income, a savings of $10,000.
Crist says this tax-rate cut would provide a $57.4 million boost to Florida’s economy. Put that in context. Compare that amount to Florida’s gross state product — $603 billion. That tax cut is 0.009% of our economy and 0.08% of Crist’s proposed state budget. Not exactly an economy-changing stimulus.
Crist also proposed a 10-day $52 million back-to-school sales-tax holiday. Big Whoop again.
And he proposed postponing the implementation of a 1,094% increase in the state’s unemployment compensation insurance tax, which is killing Florida businesses. Because the state’s unemployment compensation insurance fund has been depleted in the recession, the rate must increase automatically to refill the fund. That means the minimum rate per employee will go from $8.40 to $100.30.
In toto, we should be pleased and grateful Crist is proposing tax cuts, albeit teensy ones. A small cut is better than none. But the economic ripples from Crist’s tax cuts are like throwing pebbles into the Gulf.
Worse, there’s the other side to Crist’s final budget: the spending. He has proposed a $69 billion budget, up 4% from a year ago. And among the many, many spending initiatives in the budget are $500 million in new education spending (more votes) and $9.7 billion for what he calls infrastructure and economic development investment spending. This includes such whoppers as $93.4 million — triple last year’s funds — for producing, maintaining and restoring affordable housing (as if affordable housing is still a problem), and $10 million to facilitate planning, preparation and financing of infrastructure projects to help rural communities fund capital investments and diversify their economies.
Crist apparently has been drinking the Barack Obama Kool-Aid. That more government spending will propel Florida to prosperity.
Once again, this reminds us of our favorite economic philosopher, Frenchman Frédéric Bastiat. He wrote:
“In noting what the state is going to do with the millions of francs it voted (to spend), do not neglect to note also what the taxpayers would have done — and can no longer do — with these same millions.
“You see, then, that a public enterprise is a coin with two sides. On one, the figure of a busy worker, with this device: What is seen; on the other, an unemployed worker, with this device: What is not seen.”
Government never stimulates or creates wealth. It only deprives one to give to another.
EQUALITY FOR ALL
President Barack Obama must have failed American history. Had he not, he would know from history what tax increases always do to the U.S. economy. There is no other explanation for his wanting to raise taxes than this: He believes in his heart and soul that government should make everyone equal. He’s delusional. Americans do not agree.