Years ago, my father decided to leave the coal fields of West Virginia and move our family to Ohio so we could have better a better financial future. Since 1970s, Ohio has witnessed a steadily loss of manufacturing jobs. What factors drive corporations to other states, other countries? This chart below explains one major reason.
Manufacturing once flourished in this nation and those companies have moved to other countries. Labor unions have repeatedly blame the low wage nations for stealing the jobs, but that’s hardly the whole story.
What’s the rest of the story? Money is like water. capital flows to where there is least resistance. Greedy governments who covet corporate profits have driven our economic decline. Corporations have simply moved businesses to countries where they can make more money. Why should they be obligated to keep their factory in a nation which wants to steal what they have made?
We can no longer fool ourselves in the thought that Americans are smarter and work harder so we should have those jobs. People in other nations are just as smart and hard working as we are and they are better places for companies to invest. Forty percent corporate taxes are just not smart business. Goods made in America cost more than those made in other nations. Forty percent of the cost of every item has an embedded cost of corporate taxes paid and this makes American made goods too expensive to be competitive in the world market.
Japan just reduced their corporate tax rate by 5%. How much longer can we expect them to continue manufacturing Hondas in America?
“A Rate Which Lives In Infamy“ Printed in Friday, 17 2010 Investors Business Daily