Quote:
Originally Posted by red-beard
Seriously, it is not about the consumers. It is about taxation. Manufacturing first moved from the high tax, high wage states, to non-union, low tax states. Now they can't escape the taxes, they move overseas.
If we eliminate all federal taxes and institute a federal sales tax instead, corporations will flock back to the USA.
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I understand and largely agree with this concept, but if any gov't were to actually put that in place, it would be political suicide. They would NEVER get re-elected, because corporations don't vote, people do, and you'd be moving the tax burden completely onto their shoulders. Even if you could clearly demonstrate how it would be short term pain for long term gain, the vast majority of voters can't see past then end of their next paycheque - there's no way they would buy it and allow it to happen.
The city of Toronto is a good example. Many years ago they increased commercial property taxes significantly, while reducing residential property taxes drastically. We live about 40 miles out of Toronto, in a fairly normally-priced city, real-estate-wise. Our house, worth probably around $300K here would be worth well over $1 million in Toronto, however our property taxes would no be much higher than what we pay here. A $300K residence in Toronto would pay drastically less property tax than we do.
As a result of this taxation setup, many of the large corporate headquarters moved out of downtown Toronto and into the surrounding suburbs, where they found the taxation system to be much more affordable. Toronto then found they weren't bringing in enough "revenue" (I hate when they call tax "revenue") from property taxes and are now trying to lure business back into the core. There are several other reasons why they're in a cash crunch, but this is a big part of it.