Taxes and a competitive workforce

A sales tax would hurt lower income people. What we need is a flat income tax rate. It encourages investment and risk-taking among the well-to-do.

While taxes and tariffs hurt imports and exports, America's uncompetitive workforce is what's driving manufacturing jobs out of the country. There's no getting around that fact. It's empirical by definition. Think about it: if a company performs a site search for manufacturing facilities, they're going to take into account the cost of doing business in every location, domestic or offshore.

I've actually gone thru the process. I worked for a small, high-tech company in the early 90's, and we already had manufacturing facilities in Korea and the States. We kept our US plant for its proximity to our R & D team, but we ended up expanding into Costa Rica fdue to its high literacy rate, low-cost labor, tax incentives, time zone (vs. overnight difference in Asia) and English-speaking managers. It turned out we were the 2nd high-tech company to take advantage of the tax-free enterprise zone. Intel was the first.

The chase for the highest bang for your buck is in constant motion. At one time, Mexico, Japan, and Korea were the objects of our ire. Then it was China and India. Well, now they are losing jobs to countries like Vietnam, Malaysia and Indonesia. All have their pros and cons. But the bottom line is that as long as your workforce can climb the value chain (higher skills, higher knowledge, higher productivity), they won't be outsourced. American workers have not kept pace with that value curve.