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
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.

• http://beaglescout.wordpress.com;http://news.unifiedpatriots.com/ Beaglescout

I don’t like any of the gimmicky tax cuts any of the candidates have floated. I like either a flat tax, the fair tax (along with repeal of the 16th amendment), or a zero corporate tax. Why? Because the fedgov is getting too big, with no limits or constraints on its size, and the IRS and tax code is one of the structural elements that allows it to grow without limits. The other ones are the Federal Reserve and the direct popular election of Senators. Returning to the Constitutional form for state appointment of the Senate, for federal oversight of currency standards (but not the actual minting or printing of currency), and removing the ability for the government’s contractor to impose tax schemes that were first written down in the Communist Manifesto, would fix a huge number of structural problems that will inevitably lead to the collapse of the US.

HOWEVER, none of these tax schemes, even the most gimmicky, prohibit the fedgov from slashing regulations and compliance costs. You’re making a false equivalence by drawing this equation, and letting your dislike of Santorum color your reasoning.

We have to get past the H8.

• http://908StraightSt.wordpress.com/ mbecker908

Tax and business expansion are separate issues. Both need to be addressed and the tax proposal Santorum has put forth will fiddle at the margins at best and give the Congress the opportunity to raise hell with the “who pays for this” part. It will accomplish nothing.

Eliminating regulations – and regulatory agencies – will make a real difference.

• APA Guy

nt

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

thinking…

• elizaliza

I just wonder: Germany and Singapore are doing MUCH better than the US and we’re severely under regulated compared to them, so i don’t think its too much regulation.

I don’t think Wall St is over regulated, still not.
you can’t go whole sale on this, you gotta go quality and precision on this one.

Germany is doing well, also because of the focus on educating mechanics instead of professors

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

as pertains here specifically. Plus, within at least a standard deviation of the best conservatives of the past 15 years, Santorum is rated highly so that to seek to demonize him is to essentially demonize all but 4 or 5 geniuses since 2002…

more later but think, the results of the late 19th C in the US under a tariff regime…

• Flagstaff

Creating a special class of business practically invites the following, though:

1. A special bureau within Commerce and another within the IRS to make sure that only “manufacturers” get the tax break.

2. A clear target is created for the charge that “manufacturers are getting an $X billion tax break, so we have to increase taxes by$X billion on (insert name here) industries to make up for it.”

3. Manufacturing companies are the most likely to be unionized. Reduce their tax costs and the unions will be asking for a cut of it. The NLRB would want to come in to help the unions get it.

There undoubtedly are more, but isn’t that enough?

• lineholder

it cost me something of a struggle to hit that point. Manufacturing was my first “career love”, and I’d love to see it revived in this nation. So I’ve got some emotions on this topic that sort of got in my way for a while, LOL.

After listening to all the different points that have been made, both pro and con, on this issue, I think approaching it from the angle of reducing regulatory measures is the best approach that could be taken.

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

which I think deserves a debate whether its right or wrong. We need to discuss the utility of a purist, ideological, free trade policy as a religion, or whether it would be best to be more Machiavellian….much more later

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

I’m going wobbly…

• lineholder

/

• zachv

The tax code needs to be simplified, straight up.

Currently, tax is roughly the summation of EVERY idea the government has EVER had to spur economic grow … EVER. On account of that, it’s become a mess of backwards and competing incentives that has become incoherent.

Drop the gimmicks. Simplify the tax code. Put straight forward, understandable, incentivizing and desirable rules into place. The last thing we need is more gimmicks and tax code to wade through.

• Thomas Crown

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.

This has the virtue of being wrong on so many levels I have to assume you were being deliberately wrong.

• http://908StraightSt.wordpress.com/ mbecker908

and we’ll just disagree.

• http://908StraightSt.wordpress.com/ mbecker908

not necessarily the rank and file.

For instance, the Bishops – and the Baptists – have been happy to line up with Obama’s healthcare scheme. Same for social welfare programs.

• Thomas Crown

You do understand that the Catholic Church is the largest single provider of healthcare services (and adoption services and…) in the United States? (The Baptists are no slouches either.) And that this is done out of the Christian duty of charity and mercy?

I mean, I suppose you could say the Church forgot its way because it stopped burning heretics at the stake, and I could get behind that, but I think they have a clue what their mission is.

Furthermore, and I know this is tricky, the Bishops and the priests are not the Catholic Church. More importantly, speaking from a doctrinal viewpoint, they can’t be.

(I know I’m asking you to reject Donatism, which may be a bit much. I dare to dream.)

Does the Church have a soft spot for social democracy? Yup. Did the moron Bishops get behind Obamacare when even the Knights of Columbus were screaming about the dangers? Absolutely.

But the Church teaches that the end and the means are important, but the means need not be taxation-and-confiscation. Rather, both the people and the sovereign have duties of charity and mercy. How we get there, so long as no evil is done, is not all that significant.

So, you know. You’re entitled to be pig-ignorant. But let’s at least keep facts and opinions straight, yes?

• http://908StraightSt.wordpress.com/ mbecker908

I’m kinda tied up at the moment.

• Thomas Crown

I am really coming to loathe the inability to just leave it at (nt).

• http://www.gmsplace.com/ civil truth

And all you need put in the body is a single character, such as a period. The software just doesn’t let you leave the body field completely blank.

• aesthete

put in a fake HTML tag. Example:

“”

• aesthete

“[aoiejoipjfoiaodhoa]”

Put less than and greater than signs in place of the brackets.

• acat

If Red State ever needs a fundraiser, that’d be a good one…

Mew

• http://www.nighttwister.com NightTwister

I haven’t really seen that use before, though I can see where you’re going with it. You’re probably being much too kind with that perspective.

• http://908StraightSt.wordpress.com/ mbecker908

Sorry to be so long, work got in the way

I absolutely recognize the work of the Catholic – and Baptist – churches in the areas you note. If it weren’t for them taking their mission seriously there would not have been hospitals or, for the most part, schools, not to mention social services to the less fortunate. Not only did they recognize their calling, they did – before the intervention of government – a far, far superior job of doing those things than government ever has or ever will.

My issue today, is that “organized religion” – an oxymoron if there ever was one – has been not only willing but complicit in involving the federal government in funding their work. The problem I have with that is what we’ve seen over the last couple of months with the Obama Administration dictating not just how their money will be spent, but how the organizations must run their day-to-day operations.

The US Bishops are liberal to their core – as an organization – and while there are a few outstanding examples who have stood apart, they – along with the various leadership groups on the Protestant side – have welcomed government efforts to “wipe out poverty” and provide things like health care for all, for free. In terms of Protestants who fall into that category, I would lump the folks who showed up in Texas to endorse Santorum as well as people like Rick Warren.

I will give you your point about the Bishops not being the Catholic Church, I should have noted that is was the US Bishops I have an issue with, as I have an issue with the individual Protestant leaders.

• kipling

Instead you issue a blanket indictment of all social conservatives.

This is not the first time you have went nuts on social conservatives and then claimed “leadership” when called to account.

Even in your leadership caveat, you indict all Baptists.

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

lets be honest
but non Baptists are way more screwed up!

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

the connection of these particular institutions remains mostly tangential to, and certainly not a cause of, bigger government. The main problem lies elsewhere is more diffuse and ubiquitous.

• Thomas Crown

Stupid thing won’t let me just leave a no-text field.

• kipling

First, your hatred for social conservatives is obvious. And yes I know you claim to be one. How about you offer some proof for your contention that: “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.”

Second, since when does a targeted tax cut add to the size of government?

Third, you rail against a targeted tax cut and complain about regulation. But then you talk about how the problem with taxes and regulations is at the state level. On the one hand you condemn Santorum for not targeting regulation and then say that targeting regulation at the federal level will not work.

Fourth, you complain about the loss of revenue from the targeted tax cut to manufacturing just like a liberal would. Tax cuts do not cost revenue they actually raise the revenue and can empower the economy. At this point we need jobs and those jobs will supply the revenue.

I think you have Santorum derangement syndrome.

• Thomas Crown

We’re currently sparring over that.

But are you seriously suggesting that industrial policy does not grow the government?

Furthermore, tax cuts do not always raise revenue. The Laffer Curve shows a marginal trade-off. Tax cuts may be good, they may stimulate economic activity, but they do not always raise revenue.

Finally, you understand that your accusation of ad hominem is ironic, yes?

• kipling

If mbecker has a problem with the targeted tax cuts then just address the targeted cuts. If he thinks it will grow the government, then explain how it will grow the government. A simple appeal to lawyers is not enough. I think the current size of the IRS could handle a manufacturing tax cut. Nor do I see any specific reason why it cannot be done without enlarging the government.

But mbecker does not start there, instead he launches his post with an attack on so-called social conservatives and issues a blanket indictment of all social conservatives. He does not restrict himself to leadership until you call him on it.

An ad hominem attack is when you attempt to discredit the argument by attacking the person. I did not attack the person of mbecker. I attacked his argument. If there is a personal attack in there then please point it out.

• Thomas Crown

You asserted that the entirety of his argument was a result of mental illness. That’s pretty straightforward ad hominem.

Industrial policy by definition grows government — and makes it more intrusive. I’m not being snide when I ask if we really need to re-hash that.

• kipling

The entirety of my argument is not based on the Santorum derangements syndrome line. The line comes at the end after the initial arguments are made. It has nothing to do with the validity of the four points I raised.

Read his post again and then read his previous posts. Does he or does he not have a personal problem with Rick Santorum and social conservatives?

• Jack_Savage

Progressives have taken over most of them, particularly Protestant denominations, with the notable exception of the Baptists. There is not a shadow of a doubt in my mind that advocating for government intervention in social issues has replaced, in large measure, the work that churches used to do in communities around the country and the world. You will find more statements about global warming and divesting in companies who do business in Israel than any statements about Christ.

As far as “not having a clue what their mission” is, an example would be the PC (USA)’s involvement in the Religious Coalition for Abortion Rights (now called “Reproductive Choice”), their anti-semitic Israel Palestine Mission Network, and their involvement in the World Council of Churches.

As far as Catholics go, it seems that their schools and hospitals still do a fairly good job of ministering through health and education, but liberal Catholics have happily ceded control to Barack Obama on nearly all social issues, and actually think he is their partner. Still.

• lineholder

In efforts to “intervene” for the sake of “societal well-being”, government has assumed many of the roles that the church once filled simply via generosity, acts of kindness and compassion for our fellow human beings.

The only exception that might exist, to some extent, IMO, would be health care. Once the Doctrine of Charitable Immunity was lost back in the 1960s, this tied the hands of many religious entities that had been directly involved in health care prior to that time. They simply did not have a formal organizational structure that would let them deal with the legal issues of negligence and malpractice at the time.

I’m not saying that they could not and should not have made greater efforts to overcome these obstacles, because I believe that they could have. But at the time, only religious entities that had clearly-defined organizational structures, such as the Catholic church, survived that series of events.

• kipling

mbecker did not mention the mainline denominations. He mentioned Catholics and the Evangelical Movement. He also mentioned social conservatives. Mainline denominations are not usually considered part of the evangelical movement or social conservatives.

Rick Santorum argued that point about mainline denominations and he was right – as are you. But that is not what mbecker said.

• Jack_Savage

I am writing this in a calm spirit, so if it seems mean I do not intend it in that way at all.

I was going to write a diary entitled “Conservatives Must Leave The PC (USA) Now” until I thought better of it. I believe that with all my heart though, and any conservative who stays in a “social justice” congregation or denomination is now as much a party to what they are doing as the liberals who are in control. This shift hasn’t happened overnight, many evangelicals have fought the good fight, but it is time to make a decision. The questions before us now are simple “yes” or “no” ones, and for too long unity has taken precedence over truth.

Organized religion in America, Catholics included, have lost their way, and conservatives have been a party to it by their silence in my view. Pelosi still receives communion, as do all other pro-abortion Catholics, and the PC (USA) still supports the RCRC, and the United Methodist Church may as well be Unitarian Universalist in terms of theology, and so on.

That is what I took mbecker’s comment to mean. As an evangelical, I was not offended by them – they served as a sad reminder.

Thomas Crown’s point above, that the Church is not its leaders, is duly noted and agreed to, and my congregation is a great example of a traditional, evangelical witness in a liberal denomination. I tend to go Old Testament a little more than I should though. I am working on that.

• kipling

In fact I did write a diary along those lines awhile back when one of the mainline churches sacrificed Biblical principles to a “let’s all get along worldview.”

I left the United Methodist Church long ago for that reason.

I think you are spot-on there.

• Jack_Savage

And BTW, when you see Cinco Solas de Bronx comments, read them. He is much, much farther along than I will ever be in his research and theology, and has a very interesting and biblically pure (in my view) take on things. Although I would still rather live in the country, where God’s creativity shows itself most fully : )

The turmoil that is going on under the surface nearly everywhere in this country and the world, including in organized religion, is astonishing to me. Even more astonishing is that so few people really understand that.

It brings to mind the sign in Iraq that said “America is not at war. America is at the mall. The United States Marines are at war.”

• bk

First…. How about you offer some proof for your contention that: ?…The Catholic Church and the Evangelical Movement, for the most part, supports the social welfare side of government expansion….?

I don’t know about the Evangelicals, but wasn’t the USCCB all gung-ho about Obamacare until they found out (after it was too late) it meant cramming abortions and contraception down everyone’s throat? And certainly the Catholic Church has been all for open borders and “social justice”, which always lead to more welfare.

Second, since when does a targeted tax cut add to the size of government?

Seriously? How many pages does it take to define the “target” and the ensuing tax code changes? And how about the IRS people who have to understand and enforce it? And then there will be tweaking (always adding to it) forever, each time someone figures out how to use a loophole.

Third… On the one hand you condemn Santorum for not targeting regulation and then say that targeting regulation at the federal level will not work.

Is Santorum promoting the zero tax or reduced regulation? If he’s focused on the zero tax thing as a nice soundbite and giving no more than lip service to reduced regulations, then becker is correct. The feds lay on a huge layer of regulations and then states can make it worse. Of course most politicians are afraid of talking about reduced regulations, because it immediately gets spun into “he wants to let businesses pollute the air and water and injure and maim workers.”

Fourth… Tax cuts do not cost revenue they actually raise the revenue and can empower the economy….

In theory true, but we all know how politicians work. In Congress, spending increases need no justification or “pay as you go” – just calling them “investments” gives them a free (so to speak) pass. On the other hand, all tax cuts must be “paid for” by taking the money from someone else; otherwise they act as if the economy will collapse.

• jamesm

You mix in a few facts which are truthful with BS about the Catholic Church/Evangelicas and innuendo that Santorum is not adamently against over regulation. What a crock. Over and over again (ad nauseum) Santorum has lashed out at the over regulation of the Obama administration.Your biased article may as well have been posted at the most leftist websites, The whole middle of your article is not focus on federal tax policy but the state of california and “so called” social conservatives.You make several allegations without any support. It gets worse. California is screwed up because of liberals not because Santorum wants to reduce taxes.

You claim that Santorum is “big government” who wants to cut taxes. Which is it? You should have stuck to proving your point that reducing federal taxes on manufacturing won’t help. BS hit piece.

• http://www.gmsplace.com/ civil truth

Could you (or someone else) spell out specific examples of regulations that Rick has proposed eliminating or cutting back on.

It’s one thing to attack “overregulation” in the abstract, another to actually gore someone’s ox.

Specifics may be out there, but I haven’t seen them. It would give me more confidence in Rick’s move towards advocating fiscal conservatism if I had something here to hang my hat on.

Otherwise it’s good intentions at best (and we know where those can take us) vs. cynicism at worst.

• honoraryintern

‘Stop job-killing regulation. All Obama administration regulations that have an economic burden over $100 million will be repealed, including the Environmental Protection Agency rule on CO2 emissions that’s already shut down six power plants. I’ll review all regulations, making sure they use sound science and cost benefit analysis’ Posted in the WSJ. the whole thing is here: http://www.ricksantorum.com/oped/my-economic-freedom-agenda • aesthete Can he give an example? Because it looks to me like he voted for a whole slew of same during the Bush admin (including Sarb-Ox), and against things like a national Right to Work law (which would IMO be un-Constitutional at that level of government, but that’s never been a concern of Santorum’s). • Finrod . • http://www.gmsplace.com/ civil truth There’s not much meat on that, I’m afraid, but short of a White Paper, we’re probably not going to get much more. I don’t know where the$100M figure came from (why not lower) and I’m leery of this cost/benefit analysis criterion, given how politicized the staffing of these agencies have become.

Unfortunately, none of the candidates talk about purging the bureaucracy of the Democrat holdovers, which is what will sabotage Republic reform efforts – that and activist judges.

• jamesm

run by the democrats for years. It’s been decades since Republicans controlled the legislature. But I leave that to Mbecker to specify what percentage of federal tax on manufacturing is okay. California problems are caused by the democrats not Santorum advocating reducing federal taxes to spur employment. Santorum cannot have any impact on cutting state regulations in California. Texas is booming regardless of federal regulations. They struggle with these also. California tax code and regulations need to be rewritten. This is not a federal issue. To use a spefic democrat run state as an argument for not reducing taxes (on manufacturing) is BS. Any reasonable person who has studied the issue knows that reducing taxes spurs economic growth.

• lineholder

Consider what happens when government attempts to “intervene” on the part of any sector of industry by subsidizing production. Can the businesses that develop under that type of structure survive on their own, if it comes down to it? Most of them can not do so, which we’ve learned only too well from examples like Solyndra.

Wouldn’t the same type of principle apply if we were to go too far in the other direction, i.e. excessive tax cuts? And what happens if we put a 0% tax rate in force, hoping that it draws businesses within the manufacturing sector that are home-based in other nations to engage in manufacturing operations here, yet when the Dems are in power, they monkey around with the tax rate? It would drive up price of goods, I know that much. But would it really provide us a manufacturing sector that is stable long-term? How much would it interfere with the free-market principles of supply-and-demand that generally drive the success of business enterprises?

• jamesm

is an entire sector of the economy which is specifically target for regulations and taxes that do not pertain to other sectors of the economy. Reducing burdens is the key.
Picking winners and losers is not what needs to be done. (i just drove by Solyndra the other day)

Manufacturing is at a competive disadvantage against China as well as other companies. There are multple layers of taxes (federal and state) and regulations (federal and state) I have not seen studies on what overall tax rate is optimal for job creation and tax revenue. Keep or reducing taxes should always be the goal for a strong economy. Manufacturing does need a resurgance in the U.S. Free market principles work well if the markets that we want to sell in are truly free. The chinese protect their markets.

• http://www.nighttwister.com NightTwister

Please do so in a clear and concise way that removes any ambiguity while filling out tax forms.

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

But still…more later… Think late 19th C

• acat

They take in raw materials.
They send out finished goods.

Is this manufacturing?

Mew

• jamesm

manufacturing is. lol

• acat

Takes in raw materials, produces finished goods….

Some commercial outfits are large enough to be unionized.. some are small mom-and-pop enterprises…

Mew

• JSobieski

I can assure you that the USPTO, the EPO, WIPO and others have repeatedly failed.

Yeah, lawyers NEVER argue about definitions. You are soooooo right!!!!!

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

tool…great point that even further gives me pause in my surprising sympathy of late with a 19th C type trade policy…thinking

• jamesm

Oh wow

• http://www.nighttwister.com NightTwister

You’re new around these parts, aren’t you?

• kipling

If you want a definition of manufacturing then simply look at the tax code where it is already defined. Simply google “IRS and Manufacturing” or go to the IRS website. It is not like the IRS has never had to deal with manufacturing before.

• JSobieski

I looked and I didn’t see anything.

If there is a such a clear existing defintion, why not provide it and a link?

• kipling

I never said it was clear. It is the tax code after all. However, it is not something that we will suddenly have to deal with if Santorum becomes President. The issue and the definition already exist.

• JSobieski

There are lawyers in NYC billing out at more than $1000/hour to help clients with the R&D tax credit. You don’t think people will try to play games with the definition of manufacturing? This link has the defintion used by the IRS. http://www.irs.gov/businesses/international/article/0,,id=255309,00.html • JSobieski What is manufacturing? Manufacturing is defined at Treas. Reg. ? 1.993-3(c)(2). The regulations use (with some modification) the subpart F definition of manufacturing found at Treas. Reg. ? 1.954-3(a)(4). In general terms, the subpart F regulation defines manufacturing as any of the following: ?Substantial transformation? of purchased property prior to sale: Examples of substantial transformation include the conversion of wood pulp to paper, steel rods to nuts, bolts and screws and the canning of fish. Performs activities on purchased property that are substantial in nature and generally considered to constitute manufacture or production, or construction of property, or Incurs Conversion costs (direct labor and factory burden) that account for 20% or more of the total cost of goods sold or the adjusted basis for such property. Conversion costs included assembly and packaging costs but not parts under a service contact. See Treas. Reg. ? 1.993-3(c)(2)(iv). Packaging, repackaging, labeling and minor assembly are not manufacturing Treas. Reg. ? 1.954-3(a)(4)(iii). But see Bausch and Lomb v. Commissioner, TCM 1996-57 (1996) below. Selected developments in the definition of manufacturing. David Fishbein Manufacturing Co. v. Commissioner, 59 TC 338 (1972). This case involved the definition of manufacturing for the purposes of subpart F. The Tax Court held the assembly of bag-closing machines were substantial in nature where taxpayer ?(a) tailors and finishes some of its purchased components in order to place these parts in usable condition; (b) puts these tailored components and others together in a 6-hour, 58-step process to form salable, quality bag-closing machines; and (c) possesses in its plant all of the tools and equipment necessary for these activities?. There is nothing minor, insignificant, or insubstantial about the utilization of proper equipment, by trained personnel, in a time-consuming process which has, as its final result, a high-caliber, portable bag-closing machine.? Webb Export Corp. v. Commissioner, 91 TC 131 (1988). The DISC ?purchased standing timber, had a normal size crew fell the trees, clean the branches off as necessary and cut the trees into veneer logs.? The activities were held to be substantial in nature and generally considered to constitute production of property within the meaning of Treas. Reg. ? 1.993-3(c)(2). [30] In arriving at this conclusion, the court considered that: ?(1) loggers consider themselves to be producers; (2) standing timber is not particularly useful to manufacturers; (3) substantial activities are required before such materials are useful to manufacturers; and (4) the items considered to be raw materials and who is perceived to be a producer, varies depending upon one?s position in the manufacturing and/or production process.? Garnac Grain Co. v. Commissioner, 95 TC 7 (1990). The taxpayer?s business consisted primarily of purchasing grain (soybeans, corn, and wheat); cleaning, drying, aerating, fumigating, and blending this grain; and then selling it for export to customers. The court held that taxpayer had not carried their burden of demonstrating that the taxpayer was engaged in production because the taxpayer did not establish that their activities with respect to grain storage and handling are generally considered in the industry to constitute production. Bausch & Lomb, Inc. v. Commissioner, TCM 1996-57 (1996). The Tax Court held that taxpayer?s full range of activities necessary to assemble sunglass parts into finished, quality sunglasses were substantial in nature. Such activities involved the following: 1) leased production facilities to assemble sunglasses, 2) employed management teams to prepare production plans and order parts from their suppliers, 3) hired and trained the necessary personnel to carry out their operations, 4) inspected purchased parts for defects and prepared those parts for assembly, 5) assembled sunglass parts into finished sunglasses, 6) inspected finished sunglasses for cosmetic and functional defects, and 7) cleaned and packaged sunglasses to prepare them for distribution. The court found that assembly operations required a trained and experienced workforce. While conceding that the assembly operations did not require a large investment in physical capital, the court noted that they required a large investment in human capital. The court also rejected government?s assertion that operations require substantial amounts of time to complete to be substantial in nature. The court also took into consideration that the high-end sunglass industry would consider the operations to constitute the manufacture or production of property. This case expanded the definition of what constitutes manufacturing and clouded the concept of minor assembly. Audit suggestion. Determining whether activities constitute the production or manufacturing of property can be very fact intensive. If you think you have an issue concerning the definition of manufacturing, contact the DISC Technical Advisor for assistance. Who must manufacture the property? The property must be manufactured by someone other than a DISC. [31] See Webb Export, 91 TC 31 (1988), as discussed above, where a DISC violated this rule. Typically the property is manufactured by the R-S(s). A R-S is a “related party” that directly supplies to a DISC any property or services that the DISC disposes of in a transaction producing QER or a related party that uses a DISC as a commission agent in a disposition of property or services that produces QER. A R-S is sometimes referred to as the operating company. If the DISC manufactured the property at a time when it was not a DISC, the property would not qualify as export property to the DISC. [32] What is the location where the manufacturing must occur? Generally the property must be manufactured in the U.S. For purposes of IRC ?? 991 to 997, the term United States includes the 50 states, the District of Columbia, and Puerto Rico. [33] If the property is manufactured in the U.S. and then sustains further manufacturing outside of the U.S. prior to sale it will not be considered export property. [34] What about where it is clear that the actual manufacturing takes place in the U.S., but one or more of the component parts used in the manufacturing process are imported into the U.S.? In this case we look to the ?foreign content test? or ?the 50% test? of Treas. Reg. ? 1.993-3(e). The 50% test says provides no more than 50% of the fair market value (?FMV?), can be attributed to the FMV of articles imported into the U.S. Articles imported into the U.S. are considered ?foreign content.? Foreign content is computed under the rules of Treas. Reg. ? 1.993-3(e)(4). FMV of foreign content is the appraised value as determined under ? 402 of the Tariff Act of 1930 (19 U.S.C. 1401a) in connection with their importation. The appraised value is the full dutiable value. Evidence of the FMV of the foreign content may be the Customs invoice issued on the importation of the article or by a certification based upon information contained in the customs invoice and furnished to the holder by a person from whom the articles were purchased. [35] Generally, the 50% foreign FMV test is applied on an item by item basis. However, if the taxpayer sells a large volume of substantially identical items with substantially identical foreign content in substantially the same proportion, the items can be aggregated to determine the portion of foreign content. Treas. Reg. ? 1.993-3(e)(2). An article imported into the U.S. is treated as entirely imported even if all or a portion of the article was originally manufactured in the U.S. [36] A special rule applies for interchangeable parts. The rules applies when identical or similar component articles are imported into the U.S. and others are manufactured in the U.S. The determination of whether or not imported articles are incorporated in the export property will be made on a substitution bases as in the case of the rules relating to draw back accounts under the Customs law. For further clarification please see the example at Treas. Reg. ? 1.993-3(e)(4)(iii)(b). The next criteria to consider in determining if property qualifies as export property is to determine if the property was ?held? primarily for sale or lease in the ordinary course of business and such sale or lease was for the direct use, consumption, or disposition of the export property outside of the U.S. The direct use, consumption or disposition outside of the U.S. requirement has three parts, which focus on: Destination, Documents to satisfy proof of compliance, and Use outside the U.S. Each requirement is discussed below. As evidenced by the number of court cases, the destination test has generated the most controversy. You should carefully review these rules. Destination test ? Treas. Reg. ? 1.993-3(d)(2) – Property must be sent outside of the U.S. to satisfy the destination test. The FOB point, or the place where title or risk of loss shift from seller or lessor are not important. The key factors are the place of delivery and to whom the export property is delivered. The destination test is satisfied with respect to property sold or leased by the seller or lessor only if it is delivered by the seller or lessor- Within the U.S. to a carrier or freight forwarder for ultimate delivery outside the U.S. to a purchaser or lessee (or a subsequent purchaser or sub-lessee). Within the U.S. to a purchaser or lessee, if the property is ultimately delivered outside the U.S. (including delivery to a carrier or freight forwarder for delivery outside the U.S.) by the purchaser or lessee (or a subsequent purchaser or sub-lessee) within the one year after the sale or lease. Within or outside the U.S. to a purchaser or lessee which, at the time of the sale or lease, is an interest charge DISC and is not a member of the same controlled group as the seller or lessor. From the U.S. to a purchaser or lessee (or a subsequent purchaser or sub-lessee) at a point outside the U.S. by means of the seller?s or lessor?s own ship, aircraft, or other delivery vehicle, owned, leased, or chartered by the seller or lessor. Outside the U.S. to a purchaser or lessee from a warehouse, storage facility, or assembly site located outside the U.S., if the property was previously shipped by the seller or lessor from the U.S. Outside the U.S. to a purchaser or lessee if the property was previously shipped by the seller or lessor from the U.S. and if the property is located outside the U.S. pursuant to a prior lease by the seller or lessor, and either: the prior lease terminated at the expiration of its term, the sale occurred or the term of the subsequent lease began after the time at which the term of the prior lease would have expired, or the lessee under the subsequent lease is not a related person with respect to the lessor and the prior lease was terminated by the action of the lessor acting alone or together with the lessee. The Destination Test regulations contain three additional rules in Treas. Reg. ? 1.993-3(d)(2)(ii), (iii) and (iv). Any relationship between the seller or lessor and any purchaser, subsequent purchaser, lessee, or sublessee is immaterial, (exception for (1)(c) and (1)(f) above). In no event is the destination test satisfied with respect to property which is subject to any use (other than a resale or sublease), manufacture, assembly, or other processing (other than packaging) by any persons between the time of the sale or lease by such seller or lessor and the delivery, or ultimate delivery outside the U.S. If property is located outside the U.S. at the time it is purchased by a person or leased by a person as lessee, such property may be export property in the hands of such purchaser or lessee only if it is imported into the U.S. prior to its further sale or lease (including a sublease) outside the U.S. See below for discussion of property manufactured in U.S. and subject to further manufacture. Selected Cases and Rulings re the destination test. Since the FSC rules are similar to the DISC rules in this regard, many decisions reached for FSCs may also apply to DISCs. Further manufacturing in the U.S prior to export. General Electric Co. v. Commissioner, T.C. Memo. 1995-306, rev’d in part, vacated in part, and remanded, 245 F.3d 149 (2d Cir. 2001). [37] General Electric (?GE?) manufactured aircraft engines and thrust reversers in the U.S. and sold them through its commission DISC to foreign airline companies as well as to U.S. manufacturers. Prior to being exported, these products were installed on the airplane sold by U.S. airframe manufacturers to foreign airlines. The installation process was performed in the U.S. This process involved 110 to 160 hours of constructing a build-up consisting of over 2,000 parts from more than 40 different vendors and then using four bolts to attach the engine to the plane. Finally, an additional 60 to 65 hours were required to attach the reversers to the airplane. The Tax Court held the U.S. airframe manufacturers? activities to constitute further manufacturing, assembling, or other processing under Treas. Reg. ? 1.993-3(d)(2)(iii) disqualifying the aircraft engines and reversers from being export property under Treas. Reg. ? 1.993-3. However, on appeal, the Second Circuit reversed the decision of the Tax Court on the engines issue and vacated the Tax Court’s judgment on the thrust reversers issue. Specifically, the Second Circuit held that the attachment of engines to an airframe does not constitute assembly or other processing under Treas. Reg. ? 1.993-3(d)(2)(iii). The Second Circuit reasoned that the airframes and engines were distinct from each other physically (for example, routine removal and replacement); legally (for example, under FAA regulations and Government determinations); and commercially (for example, separate marketing and negotiations between the component-maker and the end user of the final product). The Second Circuit described the activities as follows: ?when [the airframe manufacturers] installed the engines on the airframes, [they] were not moving the engines along toward completion, or substantially changing them?. Rather, [the airframe manufacturers] were simply affixing a completed export product (an engine that was itself already in the form in which it was to be delivered) to another product (an airframe).? In addition, the Second Circuit observed that engines and thrust reversers may differ materially. Because the Tax Court’s analysis did not differentiate between the engines and the thrust reversers, the Second Circuit sent the issue back to the Tax Court for further consideration in light of its opinion. • kipling Sure lawyers will try to play games with the definition and people will cheat on their taxes. Such is life. I hardly blame Santorum for it. I would like a flat-tax as well but we are not there yet. My point is that to waste most of the day trying to define something that was already defined is not the best use of our resources or time. Many of those demanding a definition were simply showing their backsides to the public. • JSobieski key difference between conservatism and statism. How many pages of regulatory guidance would the IRS have to put out under Santorum to give some specific guidance as to the issue that could mean the difference between paying millions in taxes …. or paying$0?

Its kind of like saying a bunch of people in a room could set oil prices in a manner that is superior to the free market . . . . if we just get the right people to put the system together.

This is one of the reasons why I oppose the FAIR tax. A large transaction-based tax is far harder to enforce than an income tax given the aggregate nature of income.

• lineholder

I do, however, question whether or not a company that is established with the expectations of 0% tax rates and develops a business plan with this in mind (including establishing retail prices for the products they will be producing) will survive in a free-market context without constant and continual reliance on those tax cuts.

I guess what I’m saying is would we be inadvertently encouraging a dependency on government (although it may not be the type of dependency we generally consider) by approaching it this way?

• jamesm

is not dependency. Manufacturing works. Creating a business friendly environment is the foundation of our economy. Over regulation drives up costs and deficits. Right now this country does not make alot of television, computers and other electronics. It’s not worth it for business to produce these. Lots of machinery is made in differenct countries that should be made here.

The right level of federal taxes is up for debate but to encourage American manufacturing there should be a tax policy that brings back american jobs

• acat

Manufacturing didn’t leave .. it automated!

Quality control was one of the major drivers… robots are a heck of a lot more accurate than people… and with cheaper and cheaper electronics, controlling complex automated processes has also gotten cheaper.

Cutting the tax rate to zero will not bring back the unionized unskilled jobs, because it doesn’t lower the cost enough. Removing Davis-Bacon and increasing the scope of right-to-work would help more than lowering the tax rate because it would lower the hourly cost .. .but the jobs are still just gone.

Mew

• jamesm

Markets are changing. Work is starting to flow back from China to the Silicon Valley. I know. If it increases over the next year this place will be booming. The silicon valley is the leading edge of technology. Wages are very low in china compared to U.S. They can have several people perform the automated work of one machine in the U.S. It is a cost/benefit analysis

• aesthete

There aren’t the type of easy labor/capital tradeoffs available in the tech industry that are easily available to the manufacturing sector — nor are there the onerous regulations or labor contracts that are in place for manufacturing.

BTW, China *never* had any advantage, competitive or absolute, over the US when it comes to software or hardware development.

• http://908StraightSt.wordpress.com/ mbecker908

It depends on the manufacturing. If it’s really high tech, you’re taking some big risks in China and you can expect to have to import all your equipment and your engineers and managers will, for the most part, be expats.

• aesthete

The US and Germany still dominate at most high-tech manufacturing — we just use less people and more capital to do it, which makes sense given both the state of technology, and the state of labor. It’s not cheap to give an American engineer the incentive to live in Shenzhen — and impossible to do so in the large numbers that would be required to give China absolute advantage in that field. Boeing and other airplane manufacturers have been burned by Chinese manufacturing; so much so, that even with the Chinese government’s promise of huge subsidies and basically no lawsuits against them (rightful or otherwise), Boeing and co still see it as far more profitable to operate elsewhere.

People are up in arms about China making Hasbro toys and electronic parts — low-end consumer goods and some consumer automobile parts, basically. I wish everyone would read T Sowell and Bhagwati for clarity on this subject.

• demsaresatanic

back jobs from China is to cheapen the dollar via trillion dollar deficit spending. Food and gas prices are only the beginning of the inflation.

• jamesm

Sooner we get rid of Obama the country will boom

• http://www.nighttwister.com NightTwister

And we’re expanding. Hey, if they really want to make it so my company doesn’t pay taxes, why should I argue? More money for bonuses, higher stock value….maybe this isn’t such a bad thing after all!

• lineholder

I don’t disagree with what you’ve stated about reducing regulatory measures. I don’t disagree with a reasonable tax rate that would encourage American manufacturing and let us be competitive globally either.

But I do think “reasonable” is the operative word.

• aesthete

Now look where we are…

Bad economics are bad economics, no matter the scale.

• jamesm

ball of air?
no point, no correllation. A dog is not a cat. Housing is not Manufacturing.

air ball

• lineholder

There is the possibility that a 0% tax rate could establish an artificially-supported price base within the market, same as it did within the housing market.

• garfieldjl

I think this is my first post in this particular topic.

I agree with you that the 0% tax thing is a bad idea because it creates an artificial bubble.

• lineholder

I posted your name incorrectly. I meant jamesm.

• garfieldjl

Fact is this is one of my issues with Santorum and why I refuse to get on the Santorum bandwagon.

• jamesm

versus our competitors in other countres. There is no artificial support because the manufactures will not start business here. You won’t get any wages to tax, corporate taxes, property taxes, etc etc

• aesthete

Do all other sectors besides manufacturing have it easy?

Why should manufacturing be singled out for a tax cut?

• aesthete

they have enough similar features in the relevant areas to compare at a fundamental level:

They are both sectors that produce private goods, without significant quantifiable positive or negative externalities relative to their economic output. The policies in question are designed to concentrate investment in one sector at the expense of the rest — to create a “bubble”, if you will.

There’s plenty of basic economic analysis when it comes to government intervention in markets that have a stable equilibrium, to make reasonable inferences about basic causal relationships.

• jamesm

Manufacturers create products, including roof tiles, appliances, etc

The person that earns money from manufacturing may then be able to by a house. Reducing prices to match competitors is usually a good idea, Reducing taxes to match competitor countries is a good idea to develop and keep american jobs.

• http://908StraightSt.wordpress.com/ mbecker908

.

• aesthete
• jamesm

nt

• http://908StraightSt.wordpress.com/ mbecker908

you are completely ignorant on the subject.

• jamesm

Your article was a complete biased hit piece. I am sure you do not understand manufacturing

• acat

Cheshire grin

• aesthete

The “industry” happens when you get people to pool their labor and resources to profit from building and selling houses — just as in the manufacturing sector. Everything that you said about the multiplier effect vis a vis marginal impacts on employment applies to workers in the housing industry, as well. Reducing taxes is a good idea in general, but not when they are specific reductions that do not apply to other industries. Such taxes both encourage over-investment in specific sectors of the economy at the expense of the rest (an effect which contributes to and sometimes causes recessions, such as this one), and is based on the un-conservative premise of achieving a specific makeup for the economy using top-down means, rather than letting the economy grow and adapt organically from the bottom-up.

My fingers are getting quite irritated at having to type variations of the above for the benefit of the willingly ignorant.

• jamesm

is different from the real estate industry which in turn is different from manufacturing. Each has different regulations and taxes. Throwing “Housing Industry” does not help in the discussion. You might as well have said Healthcare.

• aesthete

“The housing boom” (in the *housing industry*) refers to the expansion of housing units all across various cities in the US. Even if you exclude construction from this definition (and there’s no reason you should in explaining the housing bubble), there are actual *workers* in the housing industry, for whom all of the multiplier stuff above applies.

I’m out — it is a complete waste of time to debate with someone who doesn’t understand the basics of this comparison.

That’s EXACTLY why no sector should receive preferential treatment.

\hat’s why Santorum’s 0% manufacturing idea is complete crap, along with Cain’s “opportunity zones” – which in that case would have simply resulted in an exodus of the poor from those areas into slums as affluent workers moved in along with their businesses and drove up all prices.

• http://908StraightSt.wordpress.com/ mbecker908

and imports it and then assembles it in the US a “manufacturer”? How about a pharm company that imports meds and puts them in bottles for shipment to wholesalers?

• aesthete

Most people would consider them part of the manufacturing industry and certainly part of the auto industry — and it would be very difficult politically to exclude them from a pro-manufacturing agreement or policy. Once you let them in, pretty much anything goes.

It’s just a whole ball of unworkable nonsense, really.

• jamesm

can be an auto parts store. They are not making anything

• aesthete

I think that’s what my point above was, and auto parts sellers’ probable inclusion in this scheme (for political reasons; see every bailout and just about every industrial policy attempt since WWII) would make a legal definition of manufacturing all sorts of nonsense.

• jamesm

Parts are manufactured in a certain location, Parts may be assemble in different location.

• http://908StraightSt.wordpress.com/ mbecker908

some are made in Mexico, parts are assembled in the US. Who is the manufacturer? And if one company owns all three plants, how much of their profit is subject to no tax?

And what about a company that sells and services a product that they manufacture? Are the profits from their service business subject to zero tax? Because if they’re not, I guarantee you the bean counters will make sure that the service business loses money and all profit accrues to the “manufacturing” arm.

• jamesm

If a part is manufactured in Mexico than it is manufactured in Mexico! Why is this so difficult?

• http://908StraightSt.wordpress.com/ mbecker908

just like every other tax policy.

• http://908StraightSt.wordpress.com/ mbecker908

1. I cited a survey of California business who were moving out of state. I also noted in the article that state taxes have substantially more impact on things like business relocation than do federal taxes. In addition, I noted that we are long overdue for a complete rewrite of the tax code.

2. In reviewing the list of reasons businesses moved, nine of ten were directly related to regulations and the state business climate. One was taxes and it was number nine.

3. You cite Texas. In comparison to California, they are regulation free, at least at the state level, and the state government in Texas – thank you Rick Perry – has worked very, very hard to attract business and to be attractive to business.

4. The California tax code is the least of the reasons businesses move.

5. I am the last person at Redstate who you can accuse of being opposed to reducing taxes. Personally I would like a flat tax where EVERYONE pays, with zero deductions, zero exemptions and zero rebates and business taxes across the board should be zero. Compliance cost goes to basically zero and every citizen has skin in the game for government spending.

6. The point of the article is that Santorum’s policy suggestion is absolutely wrong headed and will not be the driver that reinvigorates manufacturing in the US.

• jamesm

the article that you may disagree with Santorum without a clear personal bias that shows thru every sentence. I have dealt with State of California for many years. I have owned two manufacturing businesses in California. Many of my businesses owner friends over the years have relocated. Nevada has no state income tax. Texas does not have a state income tax. Manufacturing moves where there is no tax.

• http://908StraightSt.wordpress.com/ mbecker908

You’re a complete idiot. And, you have zero reading comprehension.

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

T

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

do give me pause given the results, combined with other examples in history on trade…more later

• http://908StraightSt.wordpress.com/ mbecker908

Period. He does not have a conservative record while he was in office.

Cutting taxes across the board, simplifying the tax code and cutting spending is conservative. Cutting taxes on one undefined segment of the tax code and tinkering with the rest of it is NOT conservative. And Santorum has no record of EVER opposing spending or regulation while he was an elected official.

Take it up with Erick Erickson, here and here.

• http://908StraightSt.wordpress.com/ mbecker908

Posted today

In 2006, there were 50 Republican senators. (Jumping Jim Jeffords switched parties somewhere in that time frame; I counted him as a Democrat. The ladies from Maine, of course, counted as Republicans.) Santorum?s lifetime ACU rating as of 2006 was 88.1. That is a pretty good rating, but Santorum was not one of the most conservative senators. On the contrary: while 20 Republicans had voting records that the ACU rated as more liberal than Santorum?s, 26 had voting records that were more conservative. Four Republican senators had ratings with one percent of Santorum?s, which I regarded as equivalent.

Thus, by this measure, Santorum was actually in the more moderate half of Republican senators during his years in that body. Bob Dole had a more conservative lifetime voting record; so did Trent Lott, John Sununu, Mitch McConnell, Lindsay Graham, and Orrin Hatch, who is now facing a Tea Party challenge in Utah. Bill Frist, not generally known as a fire-eater, had a record almost exactly as conservative as Santorum?s, at 87.8.

The explanation for these numbers is evident: while Santorum was a reliably conservative senator on social issues, he was not very conservative, for a Republican, on economic and fiscal issues.

• aesthete

dating back to the early ’00s, small businesses state — quite overwhelmingly — that the biggest impediment to their hiring additional workers or expanding in other ways is over-regulation. Even now, this is the case: surveys show it beating out a weak economy and political uncertainty (the other two big factors ATM) by > 5% margins.

Granted, most small businesses are not manufacturers — but there is not much to indicate that a selective tax cut would help enormously, at least compared to good appointments at the DoL (or outright dismantling of the department), a good AG and NRLB appointees, lowering of regulations (specifically state-level ones), and right-to-work laws. This manufacturing “plan” is just as idealistic and foolish as Newt’s $2.50 gas guarantee. In Newt’s defense, his energy policy is, while wildly optimistic, based on conservative principles and on net a reduction of government involvement in the energy field. The same can’t be said of Santorum’s plan, which while not a dealbreaker from a conservative point of view, does deviate from the conservative view, which should avoid using the tax code as a way to punish or reward industry. • streetwise for they never have had to make a living at it. Now manufacturing does increase a nation’s wealth. But you have to be really good at it (like Germany’s phenomenal export economy). America can be very good, but as becker notes, the regulatory environment here is awful, as are state taxes. • lineholder By law, a minimum of 25% of their economy has to be derived from products manufactured within the boundaries of Germany. • Risky Such a law would be completely illegal under EU law as broadly you can’t put up barriers to trade within the EU. They could have a law possibly requiring 25% to be pruducts from the EU, but I suspect we will find they don’t. We don’t in the UK and if they did there it would be a political issue here. • Ned Reck We ain’t never lost no love over each other… but that’s beside the point. I have always respected ya greatly. (Not sure, likewise, but I don’t care.) But be careful, my good friend… “Santorum is trying to sell the idea that he?s some sort of ?conservative? and lots of fools are buying it.” The Good Book says that your soul is endangered… from callin’ folks “fools”. Just an FYI for ya, Pard… Now on voting for Romney because he is some kinda “small-government” conservative… I am not buying that, even more so… either. Good grief. hehehe I hear ya… you think that Romney has the best “Buckley-chance” of winning. Maybe. Cross that bridge… when he wins the nom. One thing is for sure in my mind… I believe any of the candidates can beat that skinny snake-oil saleman. Take care, my learned friend… Ned • http://908StraightSt.wordpress.com/ mbecker908 there’s a biblical definition of a “fool” and a secular definition. We both know that. Pick another term if you wish, the point is people are grasping at any straw to avoid having to vote for Romney (who I don’t support) and will believe anything. Santorum, on his “conservatism” is a snake oil salesman. All talk. Zero record. • jakeofalltrades • Ann2012 http://www.thepoliticalguide.com/Profiles/Senate/Pennsylvania/Rick_Santorum/Views/Taxes/ 2012 Tax Plan – The Santorum Solution ? Cut and simplify personal income taxes by cutting the number of tax rates to just two – 10% and 28% and return to Reagan era pro-growth tax rate; ? Simplify the tax code and reduce middle income taxes by eliminating the Alternative Minimum Tax (AMT); ? Simplify the tax code, encourage savings and investment, and reduces taxes by eliminating the Death Tax; ? Lower the Capital Gains and Dividend tax rates to 12% to spur economic growth and investment; ? Reduce taxes for families by tripling the personal deduction for each child; ? Reduce and simplify taxes for families by eliminating marriage tax penalties throughout the federal tax code; ? Retain deductions for charitable giving, home mortgage interest, healthcare, retirement savings, and children; ? Eliminate the cap on deductions for losses incurred in the sale of a principal residence; ? Cut the corporate income tax rate in half to make our businesses competitive around the world, from 35% to 17.5%; ? Eliminate the corporate income tax for manufacturers to spur middle income job creation in the United States and benefit from the job multiplier effect in manufacturing; ? Increase the Research & Development Tax Credit from 14% to 20% and make it permanent to spur on innovation in America; ? Eliminate the tax on repatriated taxable corporate income invested for manufacturers equipment investment, 5.25% corporate tax rate on other repatriated income invested in the USA, and 100% expensing for new business equipment; • http://908StraightSt.wordpress.com/ mbecker908 It’s a standard Washington, Big Government, tinker-with-the-tax-code plan. There is nothing revolutionary about this list, it’s just more of the same crap politicians have been doing for fifty plus years, it will add another 3000 pages to the tax code and make lawyers richer. It’s a big government scam. • aesthete that his first four bullet points (which aren’t bad) are contradicted by what follows. I mean, hey, if you’re going to have deductions for every activity and industry under the sun, two, five, or one hundred different tax brackets don’t really matter too much, since these brackets clearly aren’t determining the % of income someone will be paying to the government. This is just another way that Santorum wants us all to fit into the government’s little boxes — he may want to use an IRS form instead of a welfare form, but the end result is no different — especially since what he proposes doesn’t seem to specifically do away with any of the harmful aspects of the current system, but rather, is grafted onto the current system. (Also, why “brackets”? Sliding scale makes much more sense from the standpoint of reducing perverse incentives associated with brackets.) • Ann2012 You?re going to be so upset aren?t you when Rick Santorum wins the nomination. You?ll be typing 24/7. : ) • aesthete I haven’t seen any pictures of Newt, Santorum, or Romney on this thread yet. • WillWong Not sure we should pile it on with remarks like this! Our guys get too much crap from the MSM and the liberals already don’t you think? • acat but then, I think politicians should be more like a slave class than a ruling class. Call me quirky. Mew • WillWong From the liberal media than the average politicians! • acat The fourth estate need a lesson on why they shouldn’t play favorites. The NYT balance sheet is an early indicator that the lesson is on its’ way… Mew • WillWong to bail you out. Case in point….Solyndra. • acat getting passed in the current environment. Maybe in 2004, but not anymore. Mew • aesthete to what they force me and you to sacrifice for their government boondoggles any day of the week. Newt and Santorum have made themselves multimillionaires mostly due to their longevity in public office (which is not a sacrifice) and by helping their clients to game the system while they were lobbyists. Enlisting in the Marines and getting deployed to Iraq and Afghanistan half a dozen times is a sacrifice. What politicians do? Not so much, though I appreciate that you’re a very respectful and civil guy all the same. • WillWong How can one psych one up to campaign and vote for them? How else to explain that more than 50% of Evangelicals are not even registered to vote? • acat Nothing further. • JSobieski People would be well served to look at politicians through a lens of cold rationality. • http://908StraightSt.wordpress.com/ mbecker908 I’ll vote for him. I’ll also watch Obama win a second term by a landslide and have a Democratic Senate and House to make sure his agenda gets passed. • Ann2012 . • http://908StraightSt.wordpress.com/ mbecker908 total ignorance of tax, economics and policy generally. • Ann2012 Invectives are your M.O., you can?t help yourself I guess. • http://908StraightSt.wordpress.com/ mbecker908 But I do happen to know what I know and I know how to spot ignorance when I see it. You’re ignorant. That, with some effort can be fixed, but you’d have to have the desire to do it and I certainly haven’t seen that. You can’t talk about the substance of the argument, all you can do is quote somebody equally as ignorant (Santorum) with no rationale for the argument. Go take your hurt feelings someplace else, you’re wasting bandwidth. • Ann2012 You use inventive and insults like a child to try and win an argument. That?s nothing to be proud of. You can?t hold a candle to any of the candidates on any level but you have a clear over-inflated opinion of yourself so you?re not able to see that. • jamesm Quill just wrote a diary that is really good on this subject. • http://908StraightSt.wordpress.com/ mbecker908 indefensible positions recommends a diary written by a guy who can’t figure out which way is up. Priceless. Just priceless. • jamesm you absolutely do not understand manufacturing. My buddies are laughing at your incomplete understanding. You should get an apprenticeship and work your way up. • Ann2012 Can you say, benzodiazepines? Give em a try, they might help calm you down. • Ann2012 Yes I?ll visit that topic, but before I do I?m forced to correct a spelling error from above, (inventive = invective) just so things make sense for future readers. • http://908StraightSt.wordpress.com/ mbecker908 The first rule of taxation should be that there is one, and only one, purpose for taxes: to raise enough money to fund the basic constitutional functions of the government. Second rule, everybody pays taxes and the tax code is simple, as in less than 10 pages of twelve point type. Now then, as to Santorum’s list: In the first three points he seems to want to cut taxes “for the middle class”. He never addresses the fact that 47% of Americans do not pay tax. As a matter of fact, that 47%, as a group, not only don’t pay tax, they end up with a net rebate from the system. The next two are simply tinkering with the existing code. The next two are tinkering with the tax code to engineer social policy. The next four are more tinkering with existing tax policy. Most of which has been addressed and thoroughly debunked here. The only thing this absolutely pathetic list demonstrates is that a Santorum administration would simply be more business as usual in DC. And that would NOT be a positive thing. • http://908StraightSt.wordpress.com/ mbecker908 A flat personal income tax with three tiers: Tier 1: 8% on the first$50K of income. No exemptions, no deductions, no rebates.

Tier 2: 15% on the next $75K, again no exemptions, deductions or rebates. Tier 3: 22% on everything over$125K with no exemptions, deductions or rebates.

Businesses: ALL business, zero tax. Dividends and capital gains are treated as ordinary personal income.

You file on a post card. Everybody has skin in the game and a reason to stop the growth of government. By eliminating business income tax you eliminate the “easy target” where the vast unwashed think that business taxes don’t get passed on to consumers. Tax compliance cost? Zero. (Santorum’s little bullets will raise compliance cost not lower them) And, business will begin to actually make investments on the basis of how those investments will impact the business instead of for short term tax advantage.

Combine THAT with real regulatory reform – see the Tea Party Senators budget plan for a great start – and you’ll see a 3% unemployment rate with a growing workforce participation rate.

• JSobieski

nt

• aesthete

‘Becker’s post above is more substance than I’ve heard from any of the major Republican candidates throughout the whole campaign cycle on those issues.

• Melody Warbington (rwm52)

I’m committed to his dead white cat under certain circumstances.

MBecker For Prez and his Dead White Cat For VP 2012

The Becker/Obama debate (after one I don’t think Obama would agree to another) would be legendary. I can hear it now. Obama, you’re a well documented idiot who has ignorant and totally indefensible positions, which of course is 100% true. Even better than Newt/Obama.

The cat could beat Biden in a debate without saying a word. Just throw out a topic and let Biden ramble.

• Melody Warbington (rwm52)

I sleep better knowing you and others like you have our backs.

• lineholder

Ah, if wishes were horses, pigs could fly, and politicians had common sense, eh?

• acat

#void

• ZootSuit

Although we mostly agree but even when we didn’t I have always respected your arguments, intellect and integrity. (Even on that now defunct discussion board where we yelled “horse manure” or whatnot at each other ). Excellent diary.

You and a few others, such as aesthete, EPU, acat (and Thomas Crown, if only because he seems to be one of the very, very few who actually seems to know what the Laffer Curve is) and unfortunately very few makes me think that conservatism may survive its current takeover by mindless Neanderthals who seem to think that Mitt Romney, Rick Santorum, and/or Newt Gingrich are conservatives.

No acat, I’m not coming back; at least not on a regular basis. The ignorance and imbecility even here on RedState is just too much. Where is the William F. Buckley, Jr. of today to drive the modern-day Birchers out of the conservative movement?

• acat

likely hasn’t gotten angry enough yet. (last month I would have said “is named Breitbart”…)

Mew

• Jack_Savage

It is the measurement of the protrusion of my stomach when I howl at Obama’s latest pile of crap statement.

If you want to stay scarce during the primary, I don’t blame you. I really haven’t taken sides, even though I wrote a short diary endorsing Gingrich after being overcome with love after he ate John King’s kidney (or was it liver?) with some fava beans and a nice Chianti.

Just don’t stay scarce forever. We need us all.

• Ann2012

Yes, I prefer a national sale tax / fair tax but for those who are working to implement a 0% manufacturer tax, I think those working on the Santorum tax plan will design a workable definition.

http://en.wikipedia.org/wiki/Manufacturing

Manufacturing is a process which involves tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be used for manufacturing other, more complex products, such as aircraft, household appliances or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users ? the “consumers”.

Manufacturing takes turns under all types of economic systems. In a free market economy, manufacturing is usually directed toward the mass production of products for sale to consumers at a profit. In a collectivist economy, manufacturing is more frequently directed by the state to supply a centrally planned economy. In mixed market economies, manufacturing occurs under some degree of government regulation.

Modern manufacturing includes all intermediate processes required for the production and integration of a product’s components. Some industries, such as semiconductor and steel manufacturers use the term fabrication instead.

The manufacturing sector is closely connected with engineering and industrial design. Examples of major manufacturers in North America include General Motors Corporation, General Electric, and Pfizer.

————————————————————————-

And here is some information about the problems with our manufacturing sector:

http://www.americanmanufacturing.org/publications/manufacturing-a-better-future

About 40,000 U.S. manufacturing plants closed between 2001 and 2008, resulting in the loss of millions of good-paying jobs. From 2001 to 2007, 2.3 million jobs were lost just from the U.S.?s huge trade deficit with China.

?The mindset among America?s economic elite?that the country does not need an industrial base?has put the country and the world economy in a ditch,? writes McCormack, who is also the editor and publisher of Manufacturing & Technology News. ?Only with a revitalized manufacturing base can America assure itself a prosperous and hopeful future.? The book, he said, ?can help set the foundation for a new economic era based on the necessity of creating millions of good-paying jobs.?

The book refutes some widely promoted myths, including that the U.S. economy can thrive with just service industries as good-paying jobs are replaced by other sectors. It also debunks the notion that lost manufacturing plants will not mean lost research and development. It details the unfair trading practices China employs, and explains the social costs of the decline in manufacturing. And it outlines recent trends, not only about trade policies and practices, but also the exporting of innovation, the shift away from job training and the threat to national security.

International trade has had a major impact on the ?hollowing out? of American manufacturing resulting in the loss of millions of jobs and depressed wages. ?China stands head and shoulders above all other trading partners as a source of America?s chronic trade deficits,? writes one of the book?s co-authors, Peter Navarro of the University of California, Irvine. In 2008, the U.S.-China trade gap was \$266 billion, more than one-third of the entire U.S. trade deficit.

A key chapter on the history of U.S. trade policy shows how a shift in post-World War II policies contributed to the decline in manufacturing. ?For the past 60 years, the needs and interests of American manufacturers have taken a back seat to the country?s geopolitical interests and the interests of the U.S. financial sector,? write Clyde Prestowitz and Kate Heidinger of the Economic Strategy Institute.

One of the biggest myths promoted by those favoring status-quo globalization is that losing manufacturing isn?t harmful (and maybe even good) because the United States can specialize in technology and innovation. Low-skill jobs would be replaced by high-skilled, well-paid jobs. In fact, writes Ron Hira of the Rochester Institute of Technology, ?some high-tech jobs and sectors have already moved to low-cost countries like India and China, and there is even more evidence that this migration will increase.?

• http://908StraightSt.wordpress.com/ mbecker908

Good lord.

You and jamesm get the award for rank stupidity today. Write an exemption for “manufacturing” into the tax code – or anything else for that matter – and it will be define by lawyers and judges. That is the way the system works.

• aesthete

“The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale.”

Either of those sentences encompasses a whole lot of activity.

• http://908StraightSt.wordpress.com/ mbecker908

primarily by lawyers.

• acat

and turn them into…

Mew

• JSobieski

Any theoretical physicist worth his or her salt will confirm the physicality of information. I definitely produce work product at part of my job.

If I use an injection molding device to print out words on a plastic tablet, I will be a manufacturer.

We are on the cusp of big revolution in “printing” technology anyway. This will just speed things up.

• JSobieski

Print a bunch of papers, and put it into a book.

Put words on a plaque.

Engrave words in wood or plastic.

Sell hardware (floppy discs, CDs. DVDs. etc. with Microsoft Word and PDF files on them).

Record audio and sell the hardware/memory component on which it is stored.

Anyway, I think the truly creative will think up even better ideas.

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

I actually think the definition is the lesser of the substantive aspects that should be determinative

• JSobieski

Its the implementation (or impossibility of implementation) that makes the difference. IHow many Harvard law professors acknowledge that if prices could just be set in a fair way, socialism could work?

If we had a society of angels we wouldn’t need laws in the first place.

A lot of people think socialism works if we just get the right people involved.

There is no perfect system, and people will fight about what “income” is. But the folly of carving out “manufacturing” for a special tax rate is a substantial folly.

• http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

start all over on the tax code, but who knows, maybe that goal is more of a folly. Experience requires that we re-consider at least selective use of tariffs given the successful eras they coincided with and the current US circumstance…more later

• JSobieski

They have no natural resources, but became an extremely strong economy.

I think Hong Kong is the example to follow.

Tariffs just get government in the further habit of “tuning” the economy.

• http://908StraightSt.wordpress.com/ mbecker908

in Hong Kong, they also have precious little in the way of regulation.

• kipling

The level of pollution there is amazing.

The U.S. has went overboard on regulation but no regulation is not the answer.

• JSobieski

Precisely what regulatory reforms will Santorum enact by the way?

• aesthete

esp along the harbor. Most of the air pollution comes from Shenzhen, though: a Chinese industrial city.

Come to think of it, problems with water pollution might have to do with the lack of clearly-defined property rights in the South China Sea.

• kipling

Hong Kong comprises not just the island but the surrounding provinces on the mainland. Or at least it used to under the British. The Chinese may have redistricted.

As to your other question, why don’t you go look it up. I think Santorum might have a website or something.

• JSobieski

why not do something more than say “look it up”

I have a great plan . . “just look it up on my website” LOL

• kipling

I am not a Rick Santorum supporter.

You asked the question and I told you where to go to find your answer. Good job. Have a cookie.

I was simply responding to the comments about regulation and Hong Kong. You assumed the rest.

• JSobieski

http://www.ricksantorum.com/obama-regs-versus-freedom

I’m sure Rick has a plan somewhere for dealing with this stuff.

• garfieldjl

Maybe all the way back in the very first Republican debate.

One of his examples was Dodd/Frank.

• aesthete

in all of the major metropoles in the Far East, especially air pollution. From what I’ve been able to observe (or hear from others), Hong Kong is better when it comes to pollution than any of the other cities on the Chinese or Korean mainland, about on par with Japan’s largest cities, and worse than Singapore (which I’ve heard is unusually good when it comes to pollution).

• kipling

I found Hong Kong to be worse than Japan but otherwise I would agree. The U.S. is by far cleaner than most of the rest of the world.

• aesthete

Same with the Netherlands, Denmark, and (from what I’ve heard) the rest of Scandinavia. Easily much better than the rest of Europe, and comparable to the US if you don’t mind occasionally inhaling cigarette smoke.

Which part of Japan did you go to? Pollution varies in Japan, but Tokyo was not great when I was there — I actually preferred Hong Kong. (I’ve heard that Nagasaki and Hiroshima are immaculate, for the obvious reasons, and I’m guessing that Kyoto is pretty good as well.)

• kipling

Hiroshima was immaculate but also kind of sterile. I did not make it to Nagasaki. Interior Tokyo was fine but the shipping harbors were pretty bad.

I loved interior Hong Kong. We went up to Victoria Peak (is that the correct name) and to some of the smaller islands for hiking. We crossed the ferry from mainland China to Hong Kong. I joked with my wife that we might see a dead body. On the return trip, the police were pulling a body out of the muck.

I have been to Germany but not into the Netherlands.

The most pristine place was New Zealand. It is well worth a visit.

• aesthete

in a time when overseas goods were already very expensive due to the costs of overseas transit, and when none of the neighboring countries were industrialized. Given the many other factors that can be proven to have contributed to US growth in a causal way, the many ways in which free trade can be proven to benefit us, and the lack of a mechanism by which a causal relationship between the US’ growth and tariffs can be established, I think we are bound by all that we currently know to favor the path which has evidence on its side, and which least hinders the freedom of commerce of American citizens.

Didn’t Andrew Jackson knock tariffs down a peg or two, in his day?

• civil truth

.

• Ann2012

…then use machinery to extract juice from them and import Styrofoam cups and pour the liquid into them, then set up a stand outside my house and sell it to passersby, then I?ll be a manufacture. And not pay taxes!

I can?t believe you?re putting me in a position to defend the IRS and the tax code, I hate the tax code. But as much as I hate them I do think that Congress is capable of defining a category that would prevent this ridiculous conversation from playing itself out.

• http://908StraightSt.wordpress.com/ mbecker908

Sigh.

• JSobieski

So applicants instead describe their inventions as computers (hardware) that does certain things.

Patent approved.

The Europeans actually put a lot more effort into preparing statutory language than our Congress does, and they routinely fail at that stuff too.

Tax lawyers have made a lifetime of income in the US by knowing how to characterize an activity as a tax-favored activity.

GE pays NO taxes. Enough said.

• http://908StraightSt.wordpress.com/ mbecker908

It’s also their most subsidized I think.

• lineholder

First, you have to also make sure that you will have the appropriate protective covering that meets the FDA requirements to prevent contamination of your lemonade.

Then you have to provide evidence that the environment in which the lemonade is produced will be free on contaminants.

Also you have to consider how waste products will be disposed of and whether there are any FDA regulatory measures you might be violating if you dump those lemon rinds into your disposal.

Food production of any type gets put through a major screening process these days. They even regulatory measures now requiring farmers to record batch numbers of fertilizers and seeds!

• Ann2012

So I?m off to look for an overseas location for my operation.

• lineholder

They have so many regulations they have to meet, and it drives up the costs of goods to the point where they can’t be competitive in the market.

And I didn’t even get into the regulatory measures pertaining to employment or insurance costs.

• Ann2012

I was going to write:

On second thought as someone who has had food poisoning, maybe I shouldn?t be so flippant about regulations trying to prevent food contamination.

• Ann2012

I meant “me to it”

• aesthete

I would think.

• Ann2012

This week’s Food Safety Infosheet from the International Food Safety Network focuses on a norovirus outbreak traced to a lemonade stand run by cheerleaders at a community festival.

• ffc99

but did you see this bit about Rick’s exploits down in Puerto Rico? Acat linked to it this morning and I thought of you when I saw it.

http://ace.mu.nu/archives/327513.php

• aesthete

I saw it a couple of days ago, and was not at all surprised to hear another stupid, counterproductive and arrogant idea needlessly expressed in a way that will lose votes.

Here’s the deal: the language of commerce and everyday communication in Puerto Rico is Spanish. English is taught in high schools, and most Puerto Ricans can get by with what they learn in high school (and it’s reinforced by the tourism there). English and Spanish are official languages, and Spanish predominates: this makes perfect sense, considering that the government (both federal and state) pumps out lots of documents that have complex legal language, and that need to be read and complied with by businesses and individuals whose primary language is Spanish. If you think that you could read and comply with complex regulations written in another language, you’re in a very small minority: it’s quite obvious that having English as the “default” language of government would do nothing but increase costs to the Puerto Rican and federal governments, and be a cost to businesses in many respects.

Santorum is dead wrong that a state’s official language must be English, btw: most states don’t have an official language, and many already print out materials in two languages (NM comes to mind). Legally, the SC ruled that a foreign language speaker tried in the courts must have a court interpreter as part of his due process rights. Santorum made an idiot of himself on an issue that he probably hasn’t thought about for much longer than the time it took for him to blurt it out, and in the process insulted a demographic for no good reason, as well as our collective intelligences. Classic Santorum, in other words.

• ffc99

Thankfully it isn’t going to happen, but can you imagine what it would be like if he was the R nominee? Day after day we’d be subjected to this kind of nonsense from him.

• lineholder

they go overboard with this stuff.

On one hand, they see it as a means of generating revenues.

Then there are the people who support state managed capitalism, they see regulatory measures as “driving the economy” with all the things that businesses have to buy in order to meet regulatory standards.

And then there’s always the people who will be employed to enforce the regulatory measures, and the buildings that have to be built for regulatory offices, and testing equipment auditors and inspectors have to buy to make sure regulatory measures are enforced, and office personnel, down to the janitor and the lawn crew….

The more they can regulate, the happier they are.

They’ll go off the deep end with O-care sooner or later. They’ll use it as a “hub” for more regulatory measures than we could even begin to imagine.

• aesthete

Sorry about that: I totally agree with everything you’ve just said. There’s no reason for lemonade stands to be regulated.

• lineholder

You know how the government works. I should have considered that a bit of snark might exist but didn’t.

• http://908StraightSt.wordpress.com/ mbecker908

Take it up with John Stossel.

Bottom line, he saw an article about some kids who got bound up in red tape because of a lemonade stand so he decided to open one. Read the article and you’ll see that you and jamesm, etal live in an alternate universe from the real world where business is actually done.

Here’s what’s required for a lemonade stand in New York City. And it’s not just idle talk, the police actually stopped some ten year old kids because they hadn’t met the regulatory requirements.

– Register as sole proprietor with the County Clerk’s Office (must be done in person)

– Apply to the IRS for an Employer Identification Number.

– Complete 15-hr Food Protection Course!

– After the course, register for an exam that takes 1 hour. You must score 70 percent to pass. (Sample question: “What toxins are associated with the puffer fish?”) If you pass, allow three to five weeks for delivery of Food Protection Certificate.

– Register for sales tax Certificate of Authority

– Apply for a Temporary Food Service Establishment Permit. Must bring copies of the previous documents and completed forms to the Consumer Affairs Licensing Center.

Then, at least 21 days before opening your establishment, you must

arrange for an inspection with the Health Department’s Bureau of Food Safety and Community Sanitation. It takes about three weeks to get your appointment. If you pass, you can set up a business once you:

– Buy a portable fire extinguisher from a company certified by the New York Fire Department and set up a contract for waste disposal.

– We couldn’t finish the process. Had we been able to schedule our health inspection and open my stand legally, it would have taken us 65 days.

Now try and imagine adding a “manufacturing” process into the mix and involving the EPA and the FDA for just two.

• JSobieski

Clearly we need SOME rules regarding the running of a lemonade stand. Otherwise, there would be anarchy and society would be dominated by anarcho-capitalists.

• lastgopinillinois

is because of this ridiculous policy. Dont we already have enough govt picking-winners-and-losers.
As a conservative, I would rather see our elected officials calling for policies that will REDUCE govt role in the private sector.
Thats my simple two-cents.

• mm2327

Mbecker908 isn’t a conservative, he or she isn’t even very bright. He or she is either profiting from outsourcing, and is too greedy to figure out what happens when a sovereign nation is deprived of it’s economic independence. I’ve seen types like Mbecker908, who demand cheap foreign labor be imported, legal and illegal, and that the taxpayers be forced to subsidize that foreign labor, so he or she could pay cheap wages.. that’s corporate welfare, it’s what Obama’s up to, it’s what’s destroyed the US economy.

Santorum’s plan is to cut the manufacturing tax, in lieu of tariffs, to take on China’s currency manipulation, as a means of attracting US companies to return manufacturing jobs to the US or to incentivize new or expansion of manufacturing in the US, to return profits earned overseas. Santorum’s Made in America Plan, cuts the corporate tax in half, cuts personal income tax rates, cuts regulation and goes after all the failed and lousy policies and regulations that have hindered the US economy.

• JSobieski

I have never heard him articulate anything specific. What I hear is the regulatory equivalent of “waste, fraud, and abuse.”

Even Reagan couldn’t cut regulations, and he was a pretty articulate spokesman who could explain precisely how they hurt the economy.

• http://908StraightSt.wordpress.com/ mbecker908

Just wow. Ignorance has a new face.

• jamesm

.

• izoneguy

You can plan properly if you KNOW what the tax rates are and WHAT they are going to be. You can never plan if you DON’T KNOW what new regulation will come along to wipe out what ever profit you may have made.

Fair taxes and less – FAR LESS regulation is needed.

Regulation fears are almost the NUMBER ONE REASON why a
business person will hold back on expansion and hiring.

• davenj1

that definitely reducing regulatory burden should be first and foremost because it is “cheaper” all the way around. Business benefits from the savings and the government can be shrunk, thus saving money, through scaling back or elimination of federal regulatory agencies.

Once that is achieved, then look to the tax code and enact true reforms that would make American manufactured products more competitive on the global market and encourage foreign manufacturing investment in this country. That can be achieved through reduction in the CBT across the board (not just manufacturing, although they benefit), or conversion to a “tax” envisioned under Paul Ryan’s plan.

• http://teapartisan.wordpress.com Loren Heal

You who recommended this should get some perspective.

For Santorum to recommend a 0% tax on manufacturing, and only lower than current rates for other businesses, has two problems: 1) it’s impure from a free market perspective and 2) it’s problematic to enforce, as you have to have some regulations about what is manufacturing and what isn’t.

But it’s not a government takeover of healthcare. It’s not cap and trade. It’s not turning the military into a social engineering lab.

And it’s not a 59-point plan.

• aesthete

and is being extolled by conservatives as a “conservative” plan simply because it features a tax cut.

I think it’s worth revisiting the principles of taxation from a conservative point of view to remind folk of what conservative principle on these issues looks like.

• Flagstaff

And it’s right. And it illuminates Santorum’s skewed idea of conservatism.

But I think your complaint fits just as well in the other one, too.

• http://impudent.edublogs.org/ kyle8

It is not a good idea, and will certainly have unforeseen effects. But worse of all it proves that Mr. Santorum is not very knowledgeable about economics and has an aversion to the action of free markets.

• http://teapartisan.wordpress.com Loren Heal

I’d prefer the theoretical purity of having the same tax rate for every business — or 9%, even — but not sticking to purity doesn’t mean you don’t understand the free market or economics generally.

There’s an awful lot of hyperventilating going on over this, and it seems like it’s just a safe way to attack Santorum.

Have you read Mitt Romney’s 59-point plan, with its progressive income tax and the rest?

Other countries have been eating our lunch and taking our milk money by doing this. It’s time we fought back.

• Risky

Why would you want to be the country where they make iThings rather than the country where they design them? Americas is not going to make itself richer with minium wage jobs bolting stuff together.

Oh and this tax plan isn’t just a income support scheme for layers, I’d reckon some lobbyists would be rubbing their hand at the fees for inserting special clauses into any such bill degignating this and that as manufacturing.

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