Well, if we eliminated "all" taxes and regulations, wages wouldn't be much of an issue. Taxes and regulation comprise a much higher percantage of most business's costs than do wages.
But that unlikely scenario aside, the U.S. has high wages because of our high capital base. More capital enables production with fewer people. With equal economic climates, our high wages would comprise [on average] the same percentage of sales as in a low-wage country.
Wages don't rise because of the goodness of the entrepreneur's heart; they are a result of higher productivity.
It's true that high wages are almost always given as the reason for moving production abroad, but, as I said, that's because wages are the biggest cost that entrepreneurs can control. That does not mean they are the biggest cost.
Tell that to the 23% of Americans who aren't counted in the productivity numbers anymore because they are in the unemployment line, their job having been offshored.
U.S. Real wages have stagnated.
That's just not true. Give me a source.
That's just not true. Give me a source.
Even if that were true, it would be an argument for raising tariffs to be equal to the tax and regulation costs, not for keeping them low. A high tax rate on domestic producers and a low tariff on foreign producers is an incentive to offshore.
Based on a labor cost of 30%, labor taxes do constitute 10% of product costs. And given the 1% tariff, that is an incentive to offshore. Unless you think we can get rid of all labor taxes, we need to raise the tariffs.