The broken record of the GOP hasn’t worn out yet. Three potential Republican hopefuls, including Sarah Palin who seems closer to running, said eliminating corporate taxes would bring jobs back to the U.S. The other two are Santorum and Bachmann.
I have written about this before, but the fact that people still are drinking this kool-aid, it needs to be repeated. China’s effective corporate tax rate is higher than the United States, according to a report by the libertarian CATO Institute.
Here is the link where Congresswoman Bachmann states she is open to the idea of eliminating the corporate tax on CBS.
Sarah Palin, although not an official candidate is still very influential with the extreme base wants to also eliminate corporate taxes, reports Sarah Jones for PoliticusUSA.
Finally, Rick Santorum has a slightly different approach. He would eliminate the corporate tax on just manufacturing businesses. In a report by the Tribune-Democrat, it said,
“After touring the Iron Street plant with JWF officials, Santorum reiterated his belief that eliminating the federal tax of 35 percent for manufacturers would help push job growth and give companies a reason to make their products here rather than in foreign countries.”
The fundamental problem with our country is our trade laws, not our corporate tax rates. We need to rework NAFTA, CAFTA, GATT and the entire WTO. Companies that move to other countries are not leaving because of our regulation or our taxes. They are leaving due to low wages.
Just look at an article I wrote earlier about a manufacturing company in China. Fortunique is leaving China to countries with lower wages than China, seriously!
The CEO of this medical plastics manufacturer said,
Fortunique will keep its plastics operations in Guangzhou, but Hubbs said sewing and other assembly will have to move to a less-developed country in Asia like Cambodia or Myanmar, where factory wages are $50 a month, compared with between $300-$400 for the same work in China.
Yep! $100 dollars a week is Too much for this company to pay, they want to pay $25 dollars a week.
There is a glimmer of hope though. Companies are finding their way back home to our shores, like Karen Kane. They decided to come back to the U.S. because of rising labor and transportation costs in China.
Well, one obviously, if the economy would be better, there would be higher demand and higher demand would allow retailers to free up their dollars and be a little freer with inventory. So if we saw the economy improve somewhat, higher demand would come of it. We would, obviously if we had higher demand we would be hiring some level of staff.
Bloomberg then asked, What could the government do to help you hire more…?
Kane’s FIRST issue was immigration laws. He believes we need to revamp the work visa law. There is a lot of illegal immigrants working in the textile industry in Los Angeles. They (the industry) would be able to hire more people who would be more secure in those positions. The other issue he brings up is, our TRADE LAWS.
This industrialist states nothing in the entire interview about taxation or regulations. This is why people shouldn’t listen to the echo chamber of the right wing.
If we eliminate our corporate taxes, it will never be low enough to compete with the cost competitiveness of the low wage countries. Even if a company comes back due to this incentive, this will further push the cost of our government onto the backs of working people, rather than the wealthy and corporations who can afford it.