How To Increase Job Opportunities And Tax Revenues

The news media would have you think the jobs we have lost to China, India and other countries are the result of lower cost labor. They tend to blame greedy capitalists on moving production off shore to save a few pennies on the production of products sold in our markets.

The unspoken truth of the matter is that domestic producers are moving production offshore because of overhead costs. Overhead costs that are the direct result of our government. So if you want to blame someone for the jobs that are moving off shore, blame your favorite politician.

There are lots of things I can point to including OSHA, EPA, Workers Compensation, Employer Paid Pensions, Employer Paid Health Insurance, MSDS, EEOC and a raft of other government imposed programs. All of these have costs associated with them and none of them are present in India, China, Vietnam, Mexico and other low cost countries.

Today, however, I want to focus on just one government cost that is killing jobs in the U.S. and point out how the situation will only get worse if we don’t do something soon.

Jim Meyers in an article entitled “U.S. Leads World¡KIn Corporate Taxes” in the September issue of “NewsMax” pointed out that the U.S. “now bears the dubious distinction of having the highest corporate tax rate in the developed world.” Why in heavens name would a manufacturer want to produce products and make a profit in this country? Instead, manufacturers make products and profits offshore while selling products at a loss in this country. It boils down to make your profits where you can keep most of them.

Treasury Secretary Henry Paulson in a Wall Street journal opinion piece wrote that, “The current tax code distorts capital flows, hurting productivity, job creation and our global competitiveness.” He suggests that countries with a 1 percentage point lower tax rate will attract 3 percent more capital. Other countries have figured this out and are lowering taxes.

The Wall Street journal reports that at least 25 developing countries have cut corporate tax rates since 2001. At approximately 39.3 percent, we are the highest and it results in receipts to the government of less than 2.5 percent of GDP. Ireland on the other hand has a corporate tax rate of 12.5 percent and collects 3.6 percent of its GDP in corporate revenues.

Even the French have figured this out and are cutting taxes under President Nicolas Sarkozy.

If you want to keep and grow the job market in this country, write to your Congressmen and tell them you want to see job opportunities in this country increase as well as tax revenues increase just as they have in Ireland through Corporate Tax reductions.