PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Florida Ranks Among the Best States for Small Business, But Where is it Headed?

By at 22 October, 2018, 10:23 am

Small Business Insider

by Raymond J. Keating-

Small Business Policy Index 2018: Florida ranked fifth best – number 5 – among the 50 states.

SBE Council’s “Small Business Policy Index 2018” ranks the 50 states according to 55 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements.

 Small Business Tax Index 2017: Florida ranked sixth best – number 6 – among the 50 states. 

SBE Council’s “Small Business Tax Index 2017” ranks the states according to 26 different tax measures. Among the taxes included are income, capital gains, property, death, unemployment, and various consumption-based taxes, including state gas and diesel levies.

Florida: A Great Place for Small Business

Many factors make Florida an attractive place to live, work and start up or own a business. And it’s not just about the weather – indeed, far from it – it’s also about the state’s public policy climate.

According to the Small Business Policy Index 2018: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship, which I write for the Small Business & Entrepreneurship Council, Florida ranked a stellar fifth best among the 50 states. It earned the sixth position on the Small Business Tax Index 2017 as well.

As for the key positives, the state imposes no personal, individual capital gains, and death taxes, while also having the second lowest unemployment tax burden, the third lowest level of state and local government employment, the second lowest government spending trend, and the fifth lowest level of state and local government spending. For good measure, Florida is a right-to-work state, and has strong protections against eminent domain abuse.

Of course, there’s always room for improvement, and Florida does inflict a high gas tax, fairly high consumption-based and wireless taxes, a corporate alternative minimum tax, and an added minimum wage mandate.

But again, overall, the Sunshine State stands out for being highly competitive in terms of public policies, and their impact on entrepreneurs, businesses and workers.  For example, as I noted in a recent blog post, Florida currently ranks number one in job growth at 4.83 percent.

A Look at the Candidate’s Policy Agenda

There is a governor’s race that will be decided on November 6, and it offers two strikingly different directions for the state’s future.

One candidate, Andrew Gillum (D), offers a policy agenda that would severely diminish Florida’s policy edge, making it a far more costly state in terms of starting up, operating and expanding a business, and for hiring additional employees.

Most troubling is Gillum’s call to hike the state’s corporate income tax rate from 5.5 percent to 7.75 percent – that’s a 41 percent hike in the tax rate. And while Gillum’s website claims that this would be a “modest” level, in reality, the state’s corporate tax rate would move from ranking 17th among the 50 states (ranked from the lowest tax to the highest) to 33rd.

In addition, Gillum wants to hike the state’s minimum wage mandate from $8.25 to $15.00. That, of course, would reduce job opportunities for young, inexperienced and low-skilled workers, while vastly increasing costs on labor-intensive businesses.

Meanwhile, Ron DeSantis (R) calls for heading down a different policy path. As noted on his website, among other measures, DeSantis calls for reducing “regulatory burdens for small businesses;” pledges to veto tax increases; supports Amendment 5 on the ballot in November (whereby residents will vote to require all increases in taxes or fees, or the creation of new taxes or fees, to pass both chambers of the Florida Legislature by a two-thirds vote); wants to phase out the business rent tax; seeks to reduce the tax on television, cellphones and streaming services; and supports cutting the corporate income tax.

If politicians are serious about improving the competitiveness of Florida – or any other state, for that matter – then the emphasis needs to be on reducing costs on and incentivizing entrepreneurship, investment and work. That’s accomplished, in part, by reducing governmental burdens imposed on all of these productive and opportunity-enhancing activities.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

 

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