Trade Imbalance? Look in the Mirror

Thursday, December 01, 2005
I always get a kick when politicians rant about the trade deficit. It's one of those easy political topics that everyone can agree with and the only enemy are those bastard Asians and their cheap products.

I have an idea for America. Why don't you quit blaming other countries low wage workers and look squarely at yourself. There is little doubt that there are some disadvantages that the United States faces when it competes with cheap foreign labor but that is hardly the whole story.

The United States discourages savings. It discourages companies from doing business here and provides foreign competition a tax break. It puts American companies at tremendous disadvantages in the global market. How? By having an absolutely horrendous tax structure.

Want to save money? Good. We will tax you on anything you earn from saving your money.

Want to do business here? Good, we will put a tax on your corporate profits.

A foreign company doing business here? Guess what, you don't have to deal with taxes because the US only taxes corporate and income taxes and you are responsible for neither here.

Are you a U.S. company and want to business abroad? Guess what, you owe the US taxes even if that good was never made or sold here.

All this does is make foreign goods cheaper here and U.S. goods more expensive abroad. You add to the fact that all U.S. goods have income taxes built into them, and you can see why they are more expensive abroad.

America has some of the brightest, hardest-working people around. We have the advantage of higher-education, more capital, and the experience to use all of them. Let's quit whining about how unfair it all is and deal with the reality of the situation. Globalization is here and it isn't going away.