Taxes and manufacturing I found your editorial (“How legislators discourage manufacturing,” Dec. 11) most insightful. I have been in marketing since 1969 in the Chicago area and have been watching the steady decline of manufacturing. The local governments, including the city of Chicago, did not find the manufacturing exodus from the area alarming. As a matter of fact, manufacturers that stayed in the city were hit with an employee head tax. It did not go over too well, as you can imagine, so it was dropped in favor of a squarefootage tax, which also went over like a lead balloon. With each tax, the city lost more manufacturing. The message from business analysts, most likely working in the financial sector, was that the American economy was going to become a services economy. Let third-world nations actually make stuff.
Well, we all know now how successful that business logic turned out. We obviously need our country to reestablish a solid manufacturing base. Relying on the financial services sector to drive the economy is nonsense. A friend of mine put it quite well: “Financial services is akin to ‘I’ll do your laundry if you do mine.’ ” Very little new wealth is generated.
When comparing tax rates against other countries we routinely ignore the VAT (value-added tax). (For more about VAT, go to: http://tiny.cc/S69WX.) VAT is one of the important ways other countries ensure taxes on their manufacturing base are reduced while still taxing companies that outsource and cut jobs. And VAT isn’t classified as a duty because everyone pays it. The VAT a company pays is deducted from the VAT they owe, so domestic manufacturers are not forced to add a mark-up that is not shown on imports. Although people who purchase the goods wind up paying a consumption tax, it could be offset with a rebate based on income.
From the Web
Thanks for highlighting how the government stacks the deck against manufacturing. Unfortunately, this same bias goes beyond the federal tax code. For example, a plastic resin manufacturer was recently chased out of my small town in rural New Jersey. (They ended up in Pa.) There had been a fire and local officials hadn’t exactly demonstrated support for the company, so they left. People here seem happy to raise taxes to preserve farms but they shudder at the thought of a manufacturer coming to town. Then complain that their teenagers have no place to work except Best Buy and Burger King.
There are about a million ways a corporation can whittle down their tax on profits down to nothing, thanks to loopholes lobbyists have spent millions on getting written into tax law. This makes the figures on taxes in the editorial absurd. In reality, a large percentage of American corporations end up paying no corporate taxes. And a fair number of firms receive corporate welfare, thanks to various programs to encourage them to do this or that economic activity. But you could be right in that we need to write laws that encourage manufacturing here. But by pushing the big lie that corporations are overtaxed here vis-a-vis the world, you lose all legitimacy as an advocate for said change. Instead you look like another corporate hack trying to convincing everyday Americans it’s not the sacrifices they make that make this country great, but our corporations with their high taxes. The corporations love the system as it is now. They know how to manipulate it while pretending to be victims of America’s high taxes. And misleading editorials like yours help push their agenda to lower their taxes.
From the Web
Any talk of corporate tax rates must recognize that companies can and do move to locales where they get the best deal. That decision often involves lower tax rates. If moving offshore for lower taxes makes financial sense, many companies would make the move. In fact, several offshore oil drilling companies have done so recently, including Transocean and Weatherford International. Noble Energy is also now moving to Switzerland, again for a lower tax rate. — Leland Teschler
In my day, it was fixed bayonets, and the landing craft we were riding didn’t always get close to the beaches. And wading to the beach, then running for cover while dodging hot lead is not something you want to do as a living. We lost more men taking Iwo Jima than in all of the Normandy Invasion, a fact most people aren’t aware of. It was a very costly piece of real estate. So I am happy to see equipment such as this EFV come out fully tested and ready to take the beating while protecting flesh and blood. Maybe we can do even more, like stopping these conflicts from ever happening again.
Please pass this on to the military planners: The Command variant of the EFV amphibious assault vehicle should look and act just like the other variant or enemies will make it a prime target.
Monorail or bust
After reading all of the letters about the real cost of mass transit, I feel obliged to toss in my two cents worth in favor of monorails. They require no large acquisitions of real estate and can be built along interstate medians. They present a smaller footprint than other lightrail vehicles and require less maintenance than either buses or trolleys. And electrical demands are less than for light rail. In colder climes, where ice abatement is required, there will be a bump in requirements. True, unlike a bus, it would be inefficient to stop at every corner, but when it is elevated, like in Chicago, it can be very attractive.
Coming clean on copper
The article “Back to the future with copper brazing” (Dec. 11, 2008) stated that research has shown “copper surfaces slow or eliminate bacterial and fungal activity.” The article should have made it clear that the U.S. Environmental Protection Agency recognizes copper’s ability to kill within 2 hours of contact 99.9% of five specific disease-causing bacteria, including methicillinresistant staphylococcus aureus (MRSA). Claims regarding antifungal activity have not been submi t ted for EPA approval, pending the completion of additional testing. In addition, antimicrobial copper alloys have not been registered with EPA for use in HVAC applications.