Last night, I was watching Anthony Bourdain's Parts Unknown show about Massachusetts. Much of the program was about the heroin and drug abuse problem in rural Greenfield Massachusetts. It's a shocking state of affairs when a formerly prosperous rural area now has a heroin problem and a heroin related crime problem. Local businesses were robbed incessantly. It was really shocking to hear!
The community has come together to face this problem, but the root cause of this situation is the loss of all the manufacturing jobs in that city. There's no opportunities for the people. There's a loss of hope. There's no opportunities and no prosperity. And it's happened all over this country.
A few decades ago, Greenfield, MA was a town with mills, factories and foundry's creating a robust and prosperous work environment in that region. ALL of these factories went away, part of the dwindling manufacturing base of America. It's a story happening all over this country and Washington DC is ignoring it! It's a huge, huge problem!
I saw the same thing a few years ago in a small town in South Texas. You would think a
small town in southern Texas would be crime-free, a place where people don't even lock their doors. Well, you would be very
wrong. It's the same story here too: no jobs, no money, drug abuse, drug trade, drug
crime and violence. It's shockingly bad.
Listen Washington, you've watched the industrial might of this country hallowed out by foreign countries and foreign companies! This blame can be placed on a number of administrations including the current one. Maybe nothing could be done in the past, but now costs have sky-rocketed in China and their big advantage is nearly gone. In fact, there's already a trickle of jobs returning to America. One thing holding a rush of manufacturers back to the US: high corporate tax rates.
It's high time to act to bring back jobs from overseas.
How to bring back jobs?? One very good way is to reduce corporate taxes that penalize companies who might want to repatriate jobs. I've written about this before here. The massive and over-compensated bureaucracy in Washington hasn't noticed that every country in the world now has lower corporate tax rates than the US. It didn't use to be that way.
How far to reduce corporate tax rates? Answer: as much as it takes!! The OECD average tax rate is about 20%, and reducing our corporate tax rate to 15% would put our country on a level playing field with the most competitive and successful nations on earth, ie., Singapore and Ireland. Why would this work? Because taxes are just another expense for businesses, so lower expenses (taxes) gives businessmen an incentive to re-examine bringing back their operations to this country. That's the beauty of Capitalism: businessmen will respond to financial incentives. Since the tax burden on many companies would fall, prices for some goods could decline too.
There's a school of thought that there shouldn't be a corporate tax at all. Why? Because money spent by consumers has already been taxed once, so why tax it again? Why double-tax that flow of money? And a lower corporate tax rate should be extended to individuals filing their taxes as S-Corp or LLC (rather than the INCREASING the tax rate of 40% demanded by Obama). Obama foolishly ignored the Republicans who warned about this. You see, small upstart businesses create the most jobs in the country, and persons starting a new business are likely to be filing as an S-Corp or LLC. If small businesses create the most jobs, why are we not trying to encourage small businesses too?? Why are the Democrats so ignorant about this?
And we should be reducing regulation not increasing it like the Democratic administration keeps trying to do. ObamaCare is a prime example. Nearly everything else the Democrats want would also hurt business: cap and trade, equal pay legislation, higher taxes, and higher regulation on banks and businesses. It all must be reversed too.