Manufacturing Income Tax

Chinese manufacturing workers, at Foxconn (the largest Chinese electronics manufacture) make approximately $350.00 per month, which is $17.00 a day for a 12-hour day, which is slightly less than $1.50 per hour . This is double the average hourly Chinese factory wage of 75¢ per hour .

We don’t have uninhibited access to the wage data in China and, thus, different sources report different hourly Chinese wages, but one thing is clear: The playing field is not level and in such an environment it is nearly impossible for the American worker and the American manufacturing company to compete. The results of this unfair playing field are as one would expect: “Since 2001, the United States has lost 2.8 million manufacturing jobs to China.” . 

One thing that would help us compete is to reduce taxes for all products manufactured in America. Currently the marginal corporate income tax rate is 35% and the average tax rate paid by most C Corporations is 24%. If all federal income taxes were eliminated for products manufactured in America, it would significantly improve the competitive position of most products made in America. In fact, on average, companies in America that were profitable would be able to keep and reinvest 24% more of that profit; while some companies would be able to keep 35% more, and just as important, other companies, who otherwise were going to have to close their doors, would now be marginally profitable, able to stay open, and able to provide their employees and not the Chinese worker, with a job. It seems to me that China is playing to win, and it is about time we do too. The above situation would not eliminate the disadvantages imposed on American workers and American companies by globalization, but it would certainly help, and it would create jobs, and it should be done immediately.

• Prev
• Next