Florida voters narrowly swung for President Trump giving him 4,617,886 (48.6%) votes over Mrs. Clinton’s 4,504,975 (47.4%) votes. It was close but it was enough to give Mr. Trump Florida’s 29 electoral votes and to help propel him to victory.
So, what does President Trump seem to have in mind for the economy and how might his policies affect the Sunshine State?
President Trump has promised to reshape tax and spending laws to increase economic growth. Florida’s business climate is already ranked high by various reports. The respected Tax Foundation’s State Business Tax Climate Index ranks Florida fourth in the nation behind the small population states of Wyoming, South Dakota, and Alaska. Florida is the home to numerous corporations, many of which do business in Central and South America.
Let’s talk about taxes and trade.
President Trump has expressed interest in bringing back overseas corporate funds by changing the way profits earned in other nations are taxed. He would substitute a lower tax rate on repatriated profits for the full U.S. corporate tax which now applies. Almost certainly this change would benefit Florida businesses and workers.
President Trump has also expressed interest in reducing the overall corporate tax rate down from its current level of 35% which is one of the highest in the world. Europe, for example, has a corporate tax rate of 25% (average of eight countries) and Ireland clocks in at 12.5%. Again, this move would almost certainly help Florida.
Lower taxes, of course, may aggravate the federal deficit which, according to the Congressional Budget Office, is about to take off. So, tax cuts need to be carefully crafted in order not to make matters worse in terms of the federal deficit and the national debt.
President Trump has often promised to tear up the North American Free Trade Agreement (NAFTA). Most economists think that is not a good idea. Florida has a lot at stake. Canada is Florida’s biggest trade partner ($3.9 billion in exports in 2015) and Mexico is our third biggest trade partner ($2.7 billion in exports in 2015).
Florida agriculture – especially tomato growers – has been hurt by NAFTA. However, hundreds of thousands of Floridians owe their jobs to international trade and investment. Clearly, the overall benefits of NAFTA to the Florida economy outweigh the costs.
President Trump campaigned on many other issues with important economic implications including immigration, health care, regulations, and infrastructure spending.
On March 21, 2017, from 4:30 – 6:00 p.m. at FAU LLS Jupiter, I will be joined by three FAU economists – Dean Daniel Gropper, Professor Keith Jakee, and Professor Kanybek Nur-tegin – to explore President Trump’s economic policies. Hope you can join us.