Bring Jobs Home to America, Mr. President
by Tom Pauken on May 15, 2011 at 1:17 PM
Were I to have a moment with President Obama as he visits El Paso and Austin this week, my message would be simple: Bring jobs home to America.
The citizens of El Paso could be especially instructive in this regard. They’re first-hand witnesses to the jobless “recovery” as well as the almost total collapse of manufacturing that’s taken place in our nation over the last decade. As home to the border port with the largest amount of Mexican-American trade, El Paso is at the crossroads of a trade deficit that is the direct result of a flood of manufacturing jobs that have left America for other countries.
A story appearing in Tuesday’s El Paso Times states that in the first two months of this year, Mexico has imported $1.1 billion more into America than America has exported into Mexico. Over the course of a year, that adds up to a $6.6 billion trade deficit with our neighbor to the south. Compounding the problem, according to the article in the El Paso Times, is that even though U.S. exports to Mexico have increased over the last two years, there has been almost no accompanying increase in new jobs in the U.S. Meanwhile, Mexico enjoys a 16 percent tax advantage over the U.S. when it comes to trade between our two nations.
That will come as no surprise to workers in Webster City, Iowa, who were informed recently that the Electrolux plant in their town was closing and 850 manufacturing jobs were being moved to Juarez, Mexico, just across the border from El Paso.
The loss of manufacturing jobs and anemic private sector growth is the direct result of how we tax businesses. The United States has the most onerous business tax system in the world with a 35 percent tax rate and 6.2 percent employer portion of the payroll tax. This results in exporting prosperity, and American jobs overseas. Our present corporate tax system rewards debt – which is deductible – while punitively taxing employment, capital investment and savings which are the engines of economic growth. Replace that job-killing corporate tax system with a revenue-neutral, 8 percent business consumption tax. All goods and services coming into the U.S. would pay the 8 percent tax while all U.S. companies exporting would get a tax credit as an offset to their business consumption tax. That would level the playing field with our trading competitors and start bringing good manufacturing jobs home to America.