Small manufacturers blame woes on foreign competition

The Charlotte Business Journal ^ | April 18, 2003 print edition | Ken Hoover

[Willie Green]

Export Illusions: Most International Trade Agreements are about Investment, Not Exports

[KevinDavis]

What do you suggest force people to buy american only? Close the borders?

[r9etb]

If the whole wide world was one big happy economy this sort of stuff wouldn't bother me. But China isn't particularly friendly. I don't particularly enjoy the tendency of big corporations to outsource their basic manufacturing capabilities to our largest potential military rival.

[Willie Green]

My recommendation is a shift in tax policy, designed to stimulate domestic production while alleviating American companies of some of the burden of domestic taxation.

A relatively low revenue tariff of 10~15% placed on all imported goods would be offset by a corresponding reduction in the corporate income tax.

[Willie Green]

But China isn't particularly friendly. I don't particularly enjoy the tendency of big corporations to outsource their basic manufacturing capabilities to our largest potential military rival.

 U.S. Trade with China 
(billion dollars)

Year	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000	2001	2002
U.S. Imports	19.0	25.7	31.5	38.8	45.5	51.5	62.6	71.2	81.8	100.1	102.3	125.1
U.S. Exports	6.3	7.4	8.8	9.3	11.7	12.0	12.9	14.2	13.1	16.3	19.2	22.0
Trade Deficit	12.7	18.3	22.7	29.5	33.8	39.5	49.7	56.9	68.7	83.8	83.1	103.1

Fundamentally, we believe that the U.S. government needs to devote more resources and put in place new programs to build wider expertise about China and to protect our industrial base from eroding as a result of our economic relations with China.

-- C. Richard D’Amato, chairman
U.S.-China Security Review Commission
(How to improve U.S.-China relations )

[jimt]

A relatively low revenue tariff of 10~15% placed on all imported goods would be offset by a corresponding reduction in the corporate income tax.

A much better approach is the consumption tax currently in the House, along with elimination of virtually all other federal taxes. It would create an immediate drop in prices of American goods and an immediate increase in the prices of foreign goods.

[dark_lord]

I've suggested elsewhere we classify corporations as American or non-American for tax purposes, where an American corporation (regardless of where incorporated) would be defined as one where 60% or more of the corporate workforce is American. American companies would get a lower tax rate, non-American a higher tax rate. Keep total aggregate corporate taxation the same.

Result - those smaller American businesses (which create most of the jobs) get a tax break. They have a lower operating cost. So they can afford to pay their workers more, or hire more workers, or invest in capital equipment -- any of which are net positives.

Any corporation, regardless of where incorporated, with fewer than 60% American workers would be classified as non-American for tax purposes and would be taxed at a higher rate. Thus the inflow of taxes to the federal government remains the same. I am sure the "all taxes are evil" crowd will knock this idea, but does anyone have any comments?

[Voltage]

I don't see the problem. Can't we all get jobs as lawyers, accountants, regulators and government employees? After all there are still plenty of productive businesses we can crush!

[Willie Green]

A much better approach is the consumption tax currently in the House, along with elimination of virtually all other federal taxes. It would create an immediate drop in prices of American goods and an immediate increase in the prices of foreign goods.

The NRST is an inherently regressive form of taxation that is truly despotic.

Long term, it would result in a two-tiered socio-economic stratification of our society.

It is not disimilar to a 21st Century eco-feudal system where the corporate aristocracy invest and expand their property holdings completely tax-free, while the serfs are overburdened with the excessive taxation on consumption and persuaded that it's supposedly "fair" because the consumption taxes are redistributed through the formal social welfare system.

[Shermy]

Usual game. Promise "enforcement" of rules, don't come through, Republicrat China lobbyists urge defunding of inspectors, high short-term profits for the businesses, but undercut in the long term US consumer/wage earner power.

"Free Trade" is for the elites, not us.

[elbucko]

Can't we all get jobs as lawyers, accountants, regulators and government employees?

Jobs! I thought we were all just going to buy a computer, stay at home and have our computer pay us. What happened? (/sarcasm)

[elbucko]

The NRST is an inherently regressive form of taxation that is truly despotic. Long term, it would result in a two-tiered socio-economic stratification of our society.

Exactly. We agree on something. The lure of sales tax, consumption tax, etc, to solve what amount to non-tax related problems is call to the disaster you describe.

[Libertarianize the GOP]

http://www.freerepublic.com/perl/bump-list

[Weimdog]

I heard the Fairtax.org guy on the radio the other day. He claimed that if the U.S. went to a sales tax only situation, NO CORPORATE TAXES, that manufacturing businesses would flock to this country.

Sounds reasonable to me.

[CIBvet]

Oh really ... Can't you guys remember anything.

We were clearly reassured way back in the '80's when they first began selling us this %#@&, "We're gonna be a SERVICE ECONOMY."

So bend over and start serving a'ready ... and be happy you any kind of job (or don't have ...whatever)

[CIBvet]

Oops!

... be happy you have any kind of job.

[jimt]

The NRST is an inherently regressive form of taxation that is truly despotic.

Long term, it would result in a two-tiered socio-economic stratification of our society.

It is not disimilar to a 21st Century eco-feudal system where the corporate aristocracy invest and expand their property holdings completely tax-free, while the serfs are overburdened with the excessive taxation on consumption and persuaded that it's supposedly "fair" because the consumption taxes are redistributed through the formal social welfare system.

Willie, as you're a guy who favors every "public transportation" boondoggle that comes along, I'm not sure I have great faith in your economic analyses.

Both NRSTs being proposed would give a 100% rebate to poverty level folks, and certain necessity items would be excluded. How is that "regressive"?

[elbucko]

..and start serving a'ready ...

You got that right. ...;^)

[hove]

I wonder what the unions didn't get about "globalism". I think they thought labor was in the catbird seat, and they could make what ever demands on business they wanted. And that created a situation where it became irresistable for manufacturers to set up shop in the third world. Throw in repressive government regulation and it became a no brainer. The fact is, there is a huge labor vacuum in the world. Globalization takes advantage of that vacuum. The corporations and their stock holders do well. They can sell products cheaper and still come out good. That is if people are buying. But the new wealth created is no longer shared with American laborors through blue collar jobs. America is becoming a service economy. That is NOT good for Americans....labor...unions...or government. But what did they expect? They should have seen the writing on the wall.

[Leisler]

Americans don't want to take math, physics, engineering, computer science, chemistry, business. Asians, Indians, Chinese do. Guess what, they win. Therefore ala, Willie Green and the rest of the shuffle footed hand out where's my job for life crew, those Asians people are evil.