After decades of waging a campaign to destroy labor unions, undermine social legislation, influence Washington (see Citizens United VS FEC) with money, and eliminating American jobs for cheaper labor overseas, big capital has won: The American people (or the immense majority of it) are on their financial knees, ridden with debt and stagnant wages, or worse, unemployment.
This article goes: “William Melick, an economist at Ohio’s Kenyon College, notes that the 3.8 million offshore jobs created between 1997 and 2007 were complemented by 2.1 million produced by those same firms inside American borders.
Melick calculated that for two-thirds of U.S. based multinationals, jobs in foreign affiliates and the U.S. parent company move up and down together; only in a small minority does foreign employment rise at the expense of American jobs.”
Although Mr. Melick is correct in his criticism of our tax code, his conclusions are erroneous or biased: Most companies that outsource do not increase parallel employment in the U.S. but quite the opposite. Most of the job growth in the U.S. nowadays is in the health and hospitality industries; two fields practically impossible to place overseas for very obvious reasons.
Of course, to attract corporations to back to the U.S. and to retain those still here, we must reduce the corporate tax. Unless we become a totalitarian nation – forbidding the movement of people and money overseas – tax incentives are the only way to retain industries here since labor will be cheaper in many other countries than in the U.S at least for the next 50 years. Unthinkable as it may appear to some, we must reward the greed and lack of patriotism of the corporate boardrooms.
But that is with regard to corporations. My position, which I intend to apply here in New Jersey if elected governor in 2013, is to reduce the corporate tax to zero. Dividend from those corporations operating in New Jersey will be also zero or very close to zero. But the dividend of those corporations which do not operate in New Jersey (above a certain income threshold and excluding retirement accounts) will be taxed very high. I currently have in my platform to tax off-N.J. dividend at 75% after federal tax. That is probably excessive and the final % may be considerably lower. But we will not treat those who invest elsewhere the same as those who invest at home. And we will still be very attractive to the corporations themselves, with a zero tax rate.