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Taxation for Economic Survival

The Business Transfer Tax

The severity of the ongoing decline of U.S. manufacturing has placed our prosperity and national security in jeopardy.  A principal cause of this crisis is the federal tax code, which currently imposes multiple layers of progressive taxation on U.S. goods.  The result, as many economists acknowledge, is crippling: a double taxation of savings for investment and excessive marginal rates.  But there is an even greater disadvantage to U.S. manufacturing: a one-sided application of free-trade policies.  The object of the various free-trade agreements crafted by our government was supposedly the mutual elimination of tariffs.  Tariffs were, in fact, eliminated, but all of America’s trading partners replaced them with comparably high border-adjusted value-added taxes (VAT), which give selective advantage to their industries.  The result is crippling: a double taxation of savings for investment and excessive marginal rates, redoubled by the additional burden of foreign value-added taxes.

America is virtually alone in the developed world in not providing the advantage of such border-adjusted taxation to her manufacturers.  At an average level of 17.7 percent for member countries of the Organisation for Economic Co-operation and Development (OECD), these taxes are not only levied on goods imported from the United States but abated on goods exported to the United States, constructing barriers to U.S....

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