Because we wouldn't. You could eliminate all taxes and regulations and we still couldn't compete with Communist China's wages.
And while I hear a lot of complaints about taxes and regulations. I don't see hardly any specific plans. What regulations are you going to cut?
Our taxes do however add a burden to the product costs of domestic producers. FIT, SS & Medicare tax adds about 10% to product costs. But we let foreigners import goods and only pay a 1% tariff. How is that fair? Low tariffs relative to domestic taxes create an incentive to offshore production.
The wage differential is still the bigger incentive. But the tariff/tax difference adds to the problem. So raising tariffs would help correct this problem. It would help reduce the budget deficits and it would put Americans back to work.
Capitalism works if it has a good supporting regulatory environment in which to operate. The recent banking crisis was to a large part the result of de-regulation of the banking industry. Not too much regulation. Capitalism doesn't work when your market isn't protected from predatory foriegn countries or when you create incentives to offshore by having too low of import tariffs.
We could because we do and the market works and can't be ignored.
Americans are paid more not because our government protects us but because our work is worth more. Gov't force seems big but it's helpless in the face of simple supply and demand. The facts speak for themselves-- American workers produce more than ten times the value of a Chinese worker:
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.