That seems to ignore the fact that a large portion of our economy is based on imports; compared to a roughly $11 trillion GDP in 2003, our imports of goods were at around $1.2 trillion. Those goods' production costs are not dictated by our tax structure (although their final cost to us is subject to import duties.)
Someone has to order that product. Someone has to unload the boat. Someone has to haul that stuff on a truck to a distribution center. Someone has to haul it to the retail outlet on a truck. Someone has to stock and sell the product. Someone in America may have designed it. That product was purchased very cheaply overseas but a lot of people still had to handle it and manage its handling. I'm certainly no expert on this stuff but its concievable to me that the embedded tax cost could actually be higher as a percentage of the total cost of the product.
It would be interesting to see a good study done on the subject.
Under the FairTax, those imports will finally be taxed, at the point of sale.
And with the huge burdens imposed on our products under the current monstrosity removed, our products are going to immediately become MUCH more competitive in the world market AND in our own.
A total WIN/WIN!
"That seems to ignore the fact that a large portion of our economy is based on imports; compared to a roughly $11 trillion GDP in 2003, our imports of goods were at around $1.2 trillion. Those goods' production costs are not dictated by our tax structure (although their final cost to us is subject to import duties.)"
The trade deficit is due in no small measure to the bias that is incorporated into our tax system against domestic producers in favor of foreign producers. If we put them both on a level playing field and tax both identically, we will be amazed at how resilient our manufacturers and ag producers are.