Wednesday, September 22, 2021
HomePatriot DispatchesSantorum is wrong on his "zero manufacturing tax"

Santorum is wrong on his “zero manufacturing 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 Social Conservatives, but at his career as an elected official – not simply the bottle of snake oil he’s peddling today, he’s anything but conservative. His record is very well documented and you can check the details here, here and most recently here.

With respect to Santorum’s zero tax for manufacturing as a way to revitalize the nations employment base, he’s simply wrong and, he’s showing his “big-government” magic underwear with this proposal.

On his website he’s got his “tax plan” posted, and it’s nothing more than the standard efforts at tinkering with the tax code and some social engineering. As far as the specifics of the “zero tax” plan, 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
  2. More adversarial toward business
  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.

Michael Becker
Michael Becker is a long time activist and a businessman. He's been involved in the pro-life movement since 1976 and has been counseling addicts and ministering to prison inmates since 1980. Becker is a Curmudgeon. He has decades of experience as an operations executive in turnaround situations and in mortgage banking. He blogs regularly at The Right Curmudgeon, The Minority Report, Wizbang, Unified Patriots and Joe for America. He lives in Phoenix and is almost always armed.

7 COMMENTS

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7 COMMENTS

  1. I’m curious, Becker. You obviously have someone else in mind, or, are you suggesting we all sit out 2012 as we did 2006 and 2008, casting a silent vote for the Dems yet one more time.

    Most of us here have preferences among these last three standing, but most of us also have already lost our personal choices 1 and 2. So any of these are compromise candidates to us.

    Still,we’ve all agreed any of them is a far cry better than the alternative.

    Do you agree?

    • My first choice is long gone. My concern right now is that Santorum is selling snake oil that some voters seem to be buying. He will get absolutely destroyed in the general and the massacre will most certainly extend down-ballot. He is a right side copy of Obama in terms of his experience – or lack thereof – and will make 1964 look like a win.

      This tax policy is just a snapshot of Santorum’s ignorance of how the market really works.

      If he’s nominated, I’ll vote for him, but I’ll go to bed early.

      • I don’t see any justification for the blanket conclusion that Santorum would obviously lose, much less get destroyed, in the general. If that were true, then it would mean that the electorate is so far gone that any attempt to trick them into voting for our GOP lowest common denominator is probably not worth it.

        • Amen, GC. My tomcat, Melvin could beat Obama, and he hasn’t begun to formulate an economic policy. We all only get one vote, and rather than anyone but Mitt, or anyone bu Rick, or anyone by Newt (Glenn Beck’s mantra) we should only be saying anyone but OB-Won.

  2. Imagine every American made product is suddenly 10% to 35% cheaper. It would revitalize US manufacturing.

    I agree that for most small businesses and startups the regulatory environment is probably intimidating and for larger enterprises it is a constant threat and cost. I have even said it is more important than taxes overall.

    But Santorum has a point that goes far beyond which state a business locates in. A zero tax on manufacturing would mean every product made in the US becomes more competitive with foreign products. It means our exports are cheaper and imports would have to compete with cheaper American products in our internal markets.

    The best part of a zero tax would be our new competitive advantage would not be the result of higher tarriffs. It would be hard for other countries to justify retaliatory measures. Except of course cutting their own tax rates which is also a plus.

    I have my own reservations about Santorum and they are in part his big government background, but at this time every candidate has a big government background and Santorum is the only guy left who can make a credible case for having any core principles.

  1. I’m curious, Becker. You obviously have someone else in mind, or, are you suggesting we all sit out 2012 as we did 2006 and 2008, casting a silent vote for the Dems yet one more time.

    Most of us here have preferences among these last three standing, but most of us also have already lost our personal choices 1 and 2. So any of these are compromise candidates to us.

    Still,we’ve all agreed any of them is a far cry better than the alternative.

    Do you agree?

    • My first choice is long gone. My concern right now is that Santorum is selling snake oil that some voters seem to be buying. He will get absolutely destroyed in the general and the massacre will most certainly extend down-ballot. He is a right side copy of Obama in terms of his experience – or lack thereof – and will make 1964 look like a win.

      This tax policy is just a snapshot of Santorum’s ignorance of how the market really works.

      If he’s nominated, I’ll vote for him, but I’ll go to bed early.

      • I don’t see any justification for the blanket conclusion that Santorum would obviously lose, much less get destroyed, in the general. If that were true, then it would mean that the electorate is so far gone that any attempt to trick them into voting for our GOP lowest common denominator is probably not worth it.

        • Amen, GC. My tomcat, Melvin could beat Obama, and he hasn’t begun to formulate an economic policy. We all only get one vote, and rather than anyone but Mitt, or anyone bu Rick, or anyone by Newt (Glenn Beck’s mantra) we should only be saying anyone but OB-Won.

  2. Imagine every American made product is suddenly 10% to 35% cheaper. It would revitalize US manufacturing.

    I agree that for most small businesses and startups the regulatory environment is probably intimidating and for larger enterprises it is a constant threat and cost. I have even said it is more important than taxes overall.

    But Santorum has a point that goes far beyond which state a business locates in. A zero tax on manufacturing would mean every product made in the US becomes more competitive with foreign products. It means our exports are cheaper and imports would have to compete with cheaper American products in our internal markets.

    The best part of a zero tax would be our new competitive advantage would not be the result of higher tarriffs. It would be hard for other countries to justify retaliatory measures. Except of course cutting their own tax rates which is also a plus.

    I have my own reservations about Santorum and they are in part his big government background, but at this time every candidate has a big government background and Santorum is the only guy left who can make a credible case for having any core principles.

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