OPINION: A way to solve our loss of manufacturing

I am not the first to suggest this idea, or one similar to it. It involves a totally new tax system that would bring back many of the manufacturing jobs that have been lost to low income nations. This plan would cause imports to pay exactly the same taxes as domestic products.

If you want to buy a new tool for your kitchen, say a baker’s rack. Someone will dig the iron ore out of the ground and load it on the dump trucks. That person is paid a salary. Payroll deductions takes a chunk of his pay. The truck driver’s salary is also taxed, as are the workers at the refinery, the steel mill, the factory that converts the metal into the baker’s rack, then the warehouse workers and drivers who deliver it to the store, and the sales staff that sell you the rack. By the time the raw ore is converted to a useful device and delivered to your home, payroll taxes have contributed a major part to its cost.

A baker’s rack made in China only pays the last stages of these taxes. That allows the stores to sell the imported product for a small fraction of what a domestic product would cost.

Now if we were to eliminate all payroll taxes, and apply a consumption tax on all merchandise to be collected at the wholesale level, then all products, imports and domestic, would pay the same taxes. The cost of domestic goods would drop dramatically making it much more economical to buy goods made in the USA other than the imports.

This would be a very fair tax. People who spend the most money would pay most of the taxes. Those who seek out and buy all the latest useless gadgets will be taxed accordingly. Those who save for the future would pay no taxes until they actually spend the money.

Now combine this idea with a great reduction in the size and cost of government made possible by the boom in returning manufacturing jobs and the impact on our economy would be considerable. If we reduce the government to the level prescribed by the Constitution, thus eliminating about 80 percent of federal spending, then the tax rate would drop dramatically. That would be another boost to our economy. Everybody would be able to afford all the things they desire.

Just imagine, all those empty factories that dot our industrial areas would be operating at full capacity. Millions of unemployed and under employed people would have good, well paying jobs. Even the millions of former government workers would find plenty of work to do.

And, of course, we the people would be able to ignore April 15. With no income taxes, the need to file tax returns would be eliminated. We could live our lives without fear of the IRS. Life would be good.

Frank Gillispie is founder of The Madison County Journal. His e-mail address is frankgillispie671@msn.com. His website can be accessed at http://frankgillispie.tripod.com/