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Technology, Transportation and Your Tax Dollars | Dominic Calabro

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Technology, Transportation and Your Tax Dollars | Dominic Calabro

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Technology, Transportation and Your Tax Dollars
Thursday, August 23, 2012 — Dominic Calabro

Let’s take a short trip back in time to when the predecessor to Florida TaxWatch, the Citizens Council for Budget Research, was founded in 1979.  On the technology front, the revolutionary Apple II computer was two years old, IBM was about to release its first PC, and the Windows operating system was still six years from existence. 

The transportation landscape looked very different as well.  The nation’s best-selling car was the Chevrolet Impala/Caprice sedan, which boasted fuel economy of 15-19 miles per gallon, equal to some of today’s biggest SUVs. And a gallon of regular gas cost roughly 86 cents, compared to today’s average of $3.41.

These are but some of the many ways our world has changed in the last few decades, but they illustrate how much Florida’s tax system has failed to follow suit.

Florida TaxWatch has been urging lawmakers to increase the collection of lawfully-owed tax on products purchased online (or through the mail) from out-of-state retailers for more than a decade.  Some estimates of this uncollected tax are as high as $2 billion per year in lost revenue. 

Look at the evolution of “Black Friday,” the annual shopping extravaganza where many local businesses see a significant percentage of their yearly sales.  Believe it or not, there was a time when Black Friday wasn’t followed by “Cyber Monday.”  But today, online shopping has become such a normalized way of purchasing goods that many of us will often browse the local store down the street, drive home and order the product online.  It ends up being cheaper, too, with no shipping and no taxes, in many cases. Florida businesses are hurting as a result, and with more companies coming online every day, there is no end in sight without the Legislature taking action.

Here’s an interesting fact about the development in communications technology: the first generation iPhone had more computing power than the system NASA used to send Apollo 11 to the moon.  I have in front of me at the moment three devices that 20 years ago would have seemed like science-fiction creations. Technological advances in communications, much like e-commerce, have so completely outpaced the financial systems set up around them in Florida that the Communications Services Tax must be reformed.

Florida’s transportation system is also suffering from technological advances, but in a much different way. There may be fewer people shopping in stores, but there are certainly not fewer cars on the road.  Anyone who has driven anywhere here during the school year, rush hour, or on any random Saturday can attest to that. 

How is it possible that the gas tax can no longer function as the main support for our transportation infrastructure needs, if there are so many more people on the roads? It’s simple. Today’s cars are two to three times more efficient than they were 20 years ago, we have low-rolling-resistance tires that help improve efficiency on even the worst gas-guzzlers, and the technology continues to advance.

The fact is, it is long past time for Florida policymakers to step up and reform a tax system that was effective back when being on the phone meant standing in your kitchen and watching your pets trip over a curly cord stretched across the room.

The President & CEO of Florida TaxWatch for the last 30 years, Dominic Calabro has had a close-up view of Florida's ever-changing fiscal and economic policies.

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