Posted on 01/24/2017 1:55:54 PM PST by Kaslin
Both President Trump and Speaker of the House Ryan want to increase U.S. jobs by increasing the number of Americans in the manufacturing work force and both believe that changes to corporate taxes are part of the formula to accomplish that goal. Both are correct, but their goals should also include returning middle class computer processing jobs and call centers that have also moved offshore. Outsourcing does not begin and end with manufacturing.
The accounting department of a major U.S. corporation should not be outsourced to another country. Engineering, medical reviews, accounting, legal research and millions of other jobs should not be exported to other countries. The same with call centers. We should be using the Internal Revenue Code to help U.S. companies operate within the United States.
President Trump appears to want to accomplish bringing jobs back to the U.S. by jaw-boning manufacturers that sell in the United States to build their products in the United States, lowering tax rates and imposing tariffs where manufacturing is done offshore. Congressman Ryan appears to want to accomplish the same results by essentially building tariffs into the Internal Revenue Code and indirectly achieving what appears to be a tax on all imports.
Yes, we need to do more to attract manufacturing jobs back into the United States. We also need to attract the non-manufacturing jobs that have been outsourced during the past two decades. Cheap communications have led to the export of millions of both high paying and moderately paying non-manufacturing jobs. Tax reform needs to address both manufacturing and non-manufacturing jobs. The Internal Revenue Code should promote moving manufacturing jobs and processing jobs back to the United States and away from India, Vietnam and the Philippines.
The axiom in war strategy is to be certain that one is preparing to fight the next war rather than preparing to fight the last war. While the goals of President Trump and Congressman Ryan are laudable, precise and immediately necessary, one could hope that they think bigger and longer term. There is an easy fix to the current issue of manufacturing by making an easily drafted couple of changes to the existing Internal Revenue Code. These changes should also include incentives for U.S. companies to move processing jobs back to the United States. There are as many computer related functional jobs that have moved offshore as there are manufacturing jobs. Let us protect as many American workers as possible.
Section 199 of the Internal Revenue Code today reduces the top U.S. corporate tax rate from 35% to a touch less than 32%. Section 199 was passed in 2004 with more than forty Democratic Congressmen and women people voting in favor and passed by voice vote in the U.S. Senate. It should be no different in 2017. To move manufacturing jobs back into the United States, all Congress needs to do is significantly increase the percentage reduction in the tax rate. To move processing jobs back to the United States, all Congress has to do is offer a similar reduction in tax rates for non-manufacturing jobs. This is an easy fix and it should be one hundred percent non-partisan. It is America first without throwing a hatchet at other nations.
I concur with President Trump that the Ryan tax plan is too complicated. I would argue that a tax plan that so dramatically and visibly changes our approach to tariffs as the Ryan plan is one that would need intellectual and practical discussions in several Senate committees including Foreign Relations, Commerce and Agriculture as such changes would be wildly unacceptable to ally and foe alike. I bid for any Trump proposed tariffs. Nothing happens in a vacuum.
Increasing the rate reductions in Section 199 of the existing Internal Revenue Code and expanding the language to cover non-manufacturing jobs that are being performed overseas would be a great way to approach the issue. Everyone should be happy.
Scan Source in Greenville SC just out source the last of their Network/Computer help desk to PI. Talk to the last guy there, he had to train his replacement in the PI, and also discover they are making $800 a month to replace him. The American Salary was 40K a year. They have out source a lot of IT jobs to the PI.
The author’s basic point about all jobs having value for an economy cannot be argued. However, it’s not hard to argue for grabbing the low-hanging fruit that is the sweetest, i.e. manufacturing. Nothing else has similar job-multiplying power like a manufacturing job. Most economic development authorities calculate it at 1 manufacturing job = 1.7 other jobs to support, supply, transport, etc.
Hopefully this kind of stuff is going to stop
Trump has indicated the "Stop the offshoring act" which would apply tariffs to imports would be in his first 100 days. The jawboning is just to let companies know what's coming. No point in letting them making bad decisions.
Congressman Ryan appears to want to accomplish the same results by essentially building tariffs into the Internal Revenue Code and indirectly achieving what appears to be a tax on all imports.
Ryan is an idiot. He has voiced opposition to tariffs. Not sure how you build an indirect tariff into the IRS code. Did I mention Ryan is an idiot?
You can tariff incoming goods. It's a lot harder to tariff offshore services that just move data. I suppose you could tariff the payments to offshore entities. Or you could just put very severe penalties for allowing information on US citizens, companies, and customers to go overseas.
I wish Mr. Trump could take second and throw bone to the kill the H-1b crowd. Just let us know we are not forgotten.
Manufacturing is not “low-hanging fruit” at all. It’s very capital-intensive, and in the age of information technology and modern telecommunications it doesn’t provide nearly the return on investment as IT-related industries do. When you look at the list of the 20, 50 or 100 largest companies in the world, it’s amazing how far down the manufacturing firms have fallen over the years.
“capital-intensive”
Correct - didn’t say it wasn’t.
“return on investment”
You write like we’d be coming from a standing start with no manufacturing infrastructure in place that’s underutilized.
“how far down the manufacturing firms have fallen”
That didn’t happen in a vacuum.
And yet, you didn’t address my one main point on jobs generated or provide data on jobs generated in IT, telecom, etc. for comparison.
You can’t trust Ryan. As everyone knows he likes to run his mouth about small government and controlling debt. But, he is a TARPer and avid supporter of government increases, ie auto bailouts, pat act, medicare part d, amnesty, no child left behind, bush/obama budgets.
Sending programming, accounting and purchasing jobs offshore also is bad.
Let’s stop all the H1B visas.
paint brush manufacturing jobs don’t matter
The Internal Revenue Code should promote moving manufacturing jobs and processing jobs back to the United States and away from India, Vietnam and the Philippines.
Change code to disallow expense tax deduction for payrolls going to these offshore entities. Only allow tax deduction of employees at work in the United States. That will get their attention very quickly.
The idea that there are idle manufacturing facilities all over the U.S. that would be fired up and re-opened with the right trade conditions is a myth. So is the notion that there are millions of unemployed and underemployed Americans who are ready to just line up at the gate of a steel mill or auto manufacturing plant and go to work next week.
That didn’t happen in a vacuum.
You're right -- it didn't happen in a vacuum. It happened at a time when advances in technology spawned the creation of entire industries that didn't even exist when many of the manufacturing plants in the U.S. that have been closed down in the last 40 years were first built.
Asian ships send over tons of manufactured goods every day and we send back empty containers. That's the problem, not automation. We want those jobs back now!
Only douche wad globalist agitators try to cloud a really simple issue.
How much does China pay you to post here?
I get 50 empty shipping containers every week.
We have a $400Billion trade deficit with China. How many jobs do you think that represents lost by the USA?
In 2016 the U.S. had a $319 billion trade deficit with China -- with $104 billion of U.S. exports to China and $423 billion of imports from China.
In 1985 the trade between the two countries was almost exactly balanced -- about $3.9 billion in imports and exports both ways.
Were we better off in 1985 or in 2016?
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