Recently, the Bureau of Labor Statistics announced the unemployment rate fell to 3.9 percent. And the week before that, the Bureau of Economic Analysis announced second-quarter economic growth was 4.1 percent.
The economy is on pace to grow at 3 percent this year for the first time in more than a decade.
What’s driving this strong economy? I believe it’s the federal tax cuts that took effect this year.
Florida has been at the center of our revitalized (and growing) economy. In the past six months, our own unemployment rate has dropped to just 3.8 percent, with some 180,000 jobs being created and brought back this year. In Naples, the Tax Cuts and Jobs Act saved workers nearly $1,400 a year. For the first time ever, Florida is now a $1 trillion economy — bigger than Saudi Arabia or Switzerland.
It’s all proof of the simple economic premise behind today’s successful policies in Washington, led by the efforts of our President. Lower taxes mean a more competitive America, because businesses can afford to spend what they need to attract talent and customers — on Main Street and in worldwide markets alike.
As a small-business owner myself, I can attest that this tax policy has stimulated and encouraged growth and expansion in our business. Our small business is now rewarded for reinvesting in their businesses by adding locations and employees. Success always depends on hard work, but the tax cuts helped lift onerous and unfair tax burdens that placed a dispiriting drag on the excitement of growth and reinvestment.
Before, small firms paid taxes as high as 40 percent before state and local levies. Now, they’re using a new 20 percent federal small business tax deduction that passed as part of tax cuts to reinvest in jobs, pay, and facilities. These gains add up quickly: In Florida, 97 percent of all small businesses employ less than 20 people, but create three out of every four jobs in the state. With more than 2 million small businesses putting 3 million people to work, 40 percent of Florida’s private-sector workforce is small-firm driven. No wonder unemployment is so low, and productivity is so high.
Of course, Florida is hardly the only state in the union where small business makes such a big difference. In many states, small firms employ at least half of the private sector, and constitute 90 percent or more of all businesses.
Yet states also rely on the health of their top employers, which are often large firms and corporations that compete in international marketplaces. Here in Florida, those companies are centered in industries like aerospace and aviation and science and technology.
The tax cuts have directed major relief their way too.
With the corporate rate dropping from 35 percent to just 21 percent, globally active firms are winning business other countries used to gobble up. Over $300 billion in money tied up overseas has been repatriated this year. And big Florida employers like AT&T, Disney, Lowes, and Walmart have handed out tax cut bonuses, with many adding stronger employee benefits.
Economic activity like this gives Floridians and Americans a lot to be excited about — and more to rely on as they chart their own futures. Wages are growing and optimism is up. Most Americans say they’re pleased with our economic course and support our economic policies in Washington.
As the old saying goes: In business, you either have to innovate or perish. The same goes for the tax code. The innovations included this year are helping small businesses like mine flourish.
Ron Kezeske is one of the owners of Ruffgers, based in Naples.