The American Spectator

Reader Mail

(Page 10 of 18)

Wayne Applegate /p>

Mr. Reiland states: "Just as stores compete for customers, states and counties compete with every other state and county for business -- and, more and more, compete with every part of the globe in what's now an increasingly integrated global economy."

Let's apply this idea to the country and the "increasingly integrated global economy" and consider some current Federal and State policies applied to businesses. Corporate taxes are high, as are individual taxes. It makes more sense to work in Texas or Tennessee than it does in New York or California because you keep more of what you earn. The two Ts don't have an income tax, just state sales taxes. The same is going to be true to a business. If you can run your manufacturing business at a lower tax in Tennessee than in Michigan, guess where the factories go? Now, let's take a look at a different consideration. Every corporation and business must pay so much money to hire and maintain each employee above and beyond the salary or wage of that employee. Social Security taxes, benefits, and other seen and unseen factors apply. Mean wages for the area also apply. You can pay a worker in Murfreesboro, Tennessee less than you pay him in Deerborn, Michigan and end with a happier, more capable, and better compensated worker due to the vast differences in the costs of living between these two metropolitan satellites. Cost of living is effected by many things, including area income and sales taxes, property taxes, and mean wages. This is one of the major reason that Detroit is losing people hand over fist, and the jobs that go with them, while places like Murfreesboro, Nashville, and Greensboro (all in Tennessee) are gaining both.

Now, how does this apply to the nation as a whole in the global economy? Our standard of living is the highest in the world, and wages are similar. But it's taxes, more than anything, which drive jobs out of the country. This is most effected in support sectors. Support doesn't earn new business, though it does help keep business. Without bringing new money in to provide for their own financials, making these areas more efficient financially requires less money being spent on them. There's a reason why every major computer manufacture has tech support and customer support in countries like Panama, India, the Philippines, Malaysia, and other developing countries. Not only can a company pay far lower wages in comparison to the U.S. (yet still provide some of the highest wages in these countries), but they pay far less in cost per employee (social security taxes, unemployment insurance, extra property taxes for a place for these people to work, etc). Manufacturing is another industry heavily affected by these considerations. These jobs are being sent overseas because it's better for the business, and consumers want the business to be there to continue to provide products and services.

These considerations cannot all be address by a single sweeping reform, but the first thing that must change is taxes. Taxes, and in that I mean all taxes of all types and on all levels, must start going down and be rearranged so as to be better for the individual. The first step in this is the Fair Tax (see www.fairtax.org) removing corporate taxes (more money for investments and employees), capital gain taxes (more prosperity for corporations and individuals alike), and Social Security/Medicare taxes (lowering the cost per employee for hiring in America).

The next step is lower entitlements, finding more efficient and less expensive means to provide unemployment services and health services, and many other issues.

p>If American wants to keep her place at the top, she's going to have to learn how to compete better across the board. We've had a technological and cultural advantage for nearly a century, but as we export that culture (while losing it ourselves) and technology, we give away our advantage. It's time we find a new one. br> -- Charles Campbell br> Austin, Texas /p> p> As was observed long since, civilizations ascend to greatness in hobnailed boots and descend to oblivion in silken slippers. br> -- David Govett

topics:
Taxes, Education, Trade, John McCain, Bill Clinton, Business, Entitlements, Social Security, Medicaid, Religion, Islam, Abortion, Hollywood, Law, Military, Iraq, Iran, NATO, Immigration, Unions, Medicare