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Santorum is wrong on his “manufacturing zero tax”.

I’ll cut to the chase, Rick Santuorm is not only a big-government pro-lifer, he’s part of the reason we’re overrun with government.

Santorum is trying to sell the idea that he’s some sort of “conservative” and lots of fools are buying it.  He does have a strong record on issues  that are near and dear to the hearts of the so-called Social Conservatives, but if you look at what the people who front that movement espouse, they are anything but “conservative”.  They basically want the government to provide the community support that the church used to when they still had a clue what their mission was.  The Catholic Church and the Evangelical Movement, for the most part, supports the social welfare side of government expansion.  There is nothing conservative about that.

With respect to Santorum’s zero tax for manufacturing as a way to revitalize the nations employment base, he’s simply wrong.  He has no clue what motivates the private sector because he hasn’t been in it forever.  All he’s doing is tinkering with the tax code in a slightly different way than Obama does.  And, it won’t make a difference.  Federal taxes, by and large, don’t impact manufacturing in a way that will accomplish an expansion of the manufacturing base and create jobs.  While the tax code is an enormous problem, zeroing out taxes for one segment – and wait until the lawyers work on defining “manufacturing” – will do nothing but make lawyers rich and give the Congress the opportunity to decide whose taxes go up to “pay for” the “manufacturing tax cuts”.  Nightmare on Pennsylvania Ave.

The problem is not taxes, it’s over-regulation.  In other words, too much government.  Santorum is talking about adding more government to “fix” what he thinks is the problem and is ignoring the real issue, regulation.

Breitbart has a piece on California’s problem with revenues, the legislature keeps raising tax rates and putting measures on the ballot for additional “temporary” tax increases and revenues keep going down.  Doh.  The article also notes that businesses are fleeing California in increasing numbers and outlines the reasons they’re leaving.  Let me note upfront that state taxes have a significantly greater impact on business operations than a federal tax because a business can do something about a state tax.  They can move.  Here’s the money quote from Breitbart and I’ve reformatted their paragraph to bullet points for ease of reading.

Spectrum Locations Consultants recorded 254 California companies moved some or all of their work and jobs out of state in 2011, 26% more than in 2010 and five times as many as in 2009. According SLC President, Joe Vranich: the “top ten reasons companies are leaving California:

  1. Poor rankings in surveys
  2. More adversarial toward business
  3. Uncontrollable public spending
  4. Unfriendly business climate
  5. Provable savings elsewhere
  6. Most expensive business locations
  7. Unfriendly legal environment for business
  8. Worst regulatory burden
  9. Severe tax treatment
  10. Unprecedented energy costs.

Vranich considers California the worst state in the nation to locate a business and Los Angeles is considered the worst city to start a business. Leaving Los Angeles for another surrounding county can save businesses 20% of costs. Leaving the state for Texas can save up to 40% of costs. This probably explains why California lost 120,000 jobs last year and Texas gained 130,000 jobs.

Nine out of ten reasons businesses relocate are directly related to state regulation and the business environment that the state maintains, one out of ten is taxes and it’s number nine on the list.  In addition, if you look at the savings that is available by relocating, the 20% to 40% are well outside the tax range of the state of California.  The article doesn’t break down the savings, but you can bet that things like workers comp insurance is probably higher on the list than taxes.

Bottom line, Mr. Santorum your policy centerpiece is total BS.  The tax code should be scrapped and rewritten, but your policy idea won’t accomplish a thing, except to give lawyers a nice payday when they’re making the case that everything under the sun is “manufacturing” and Congress will have a field day deciding who gets to “pay” for your lousy policy.

This crap is what happens when we let people who’ve never had a real job – much like the current resident of the White House – run for President.

Go get a real job and contribute to the economy Mr. Santorum.

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