What could be done to ameliorate the manufacturing decline?
Not much unless you want to talk tariffs. We're pretty good at shooting ourselves in the foot with our inefficient, expensive Government, but some of the problem also has to do with our toleration of the Chicoms deliberately keeping the Yuan undervalued, which would mostly be solved by tariffs.
Of course, that statement COULD be simply shortened to:
"some of the problem also has to do with our toleration of the Chicoms".
Another LARGE problem is the short-sighted lemming-like quality of todays MBA. They want to manufacture in country (insert name here) not only because it's cheaper, but also because they think they can rule the local market.
They don't seem to realize or care that they are simply training their competition, and in 10 years they'll be gone.
You mean the decline in manufacturing employment? Absolutely nothing, unless you want our government to assume the role of, say, the United Autoworkers or Steelworkers.
If we want competitive manufacturing we need a competitive method of taxation.
What could be done to ameliorate the manufacturing decline?
Not much unless you want to talk tariffs.
Actually there is a better alternative than tariffs as tariffs tend to illicit a response in kind against our exported goods.
Consider that today we operate with income and payroll taxes and the systemic overhead that goes with them driving the costs of manufacture and our exports up. Imports have little of this tax overhead component built into them as the nations sending goods to us subsidize their manufacturers by rebating the VATs they pay in production back to them on anything they export.
Those goods that we export to these countries get their VATs tacked onto them with the consequence that not only do our goods get loaded with our own taxes, they get loaded with foreign taxes as well.
This is a double hit on our exports in relation to our imports that we saddle ourselves with. Our exports get a double load of taxes while imports into our nation come in with little if any tax burdens from their origin countries while we fail to tax the goods anywhere equal to how we tax our own domestic goods.
The net result of this is an extreme unfair trade advantage for trade imports into this country even beyond that of low wage environments many of those nations operate with. Even a tariff added onto imported goods would fail to address the imbalance for our manufacturers would still be hit with our own taxes as well as the VATs of the nations we export to and any retaliative tariffs they would tack on in response to our tariffs.
One immediate thing we could do is change the basic structure of our tax system.
Don't tax manufacturers and production through income and payroll taxes that burden our manufacturing to begin with. Instead levy taxes only on consumption in the United States collecting the tax on all imports and domestic goods equally at point of retail sale.
Repeal income and payroll taxes and levy across the board retail sales tax. All goods and services are then treated equally without a tariff to raise the specter of trade wars, our exports are free of our own taxes leveling the field in competing with foreign goods in their own countries.
As far as relieving any decline we have experienced in manufacturing, consider what we see happens where tax havens exist in which to do business.
Chairman of the House Ways and Means Committee,
Rep. Bill Archer (R-TX)
August 12, 1996
- "A recent survey was done, in Europe and Japan, of the major corporations and I was astounded at the results. They were asked, 'If the US abolished its income tax and went to a sales tax, would that have any impact on your decisions?' Eighty percent of the corporations said they would build their factories in the United States of America. Twenty percent said they would move their international headquarters to the United States of America."
"What could be done to ameliorate the manufacturing decline"
Depends whether you mean the manufacturing JOBS decline - which is unstoppable, or the value add of materials into goods.
The former is unstoppable, the latter is a problem in specific, heavily unionized industries, but not so much a problem in other areas.