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Shooting Ourselves in the Foot |
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Written by Leo Linbeck
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Friday, 14 April 2006 |
Tax Incentives for Purchase of European Exports
Is it the American appetite for all things foreign, from oil to cars to clothing, that pushed the trade deficit to yet another record in 2005? Or is it our broken income tax system?
The U.S. Department of Commerce reported last month that the overall trade gap climbed to an all-time high of $725.8 billion last year, up 17.5 percent from 2004, marking the fourth straight record. Analysts predict that the 2006 trade gap will be even worse. The year's $201.6 billion deficit with China, the largest ever recorded with a single country, brought demands for a crackdown on what the U.S. sees as unfair trade practices. This occurs at a time when Europeans are viciously attacking the U.S. for not phasing out fast enough the puny export incentive provided in the form of the Foreign Sales Corporation (one of the many small loopholes in the tax code).
It's time Congress knew what FairTax supporters know: The real culprit is our income tax system. It penalizes American manufacturers and workers in order to provide what is, in effect, a tax incentive for foreign goods. The U.S. allows foreign-produced goods to enter our market fully tax free, yet we fully tax American-made goods. Foreign producing nations rebate the tax they impose upon export, but the U.S. does not. And when Americans seek to export, the foreign nations with whom we trade have no problem reimposing border taxes at an average rate of 18 cents per dollar. In other words, we tax our own goods and don't tax theirs. No wonder we have a trade deficit. Americans don't have too high an appetite for foreign goods. We have an appetite for less expensive goods.
Next time you hear a member of Congress talk about manufacturing losses or the trade deficit, raise this point. The FairTax puts foreign and American-made goods on an equal footing. (Source: Dan Mastromarco, the Argus Group)
As you fill out your tax returns this week and next, take a moment to e-mail your friends the link to FairTax.org: (http://www.fairtax.org/) and let them know why you support the FairTax!
And please take a moment to read the Special Alert below!
Help us help you bring jobs back to America.
Join us today by sharing the news about the FairTax and the freedom we offer from a tyrannical tax system with your associates, co-workers, friends, and family at http://www.fairtaxvolunteer.org/tell_a_friend/index.html.
Thank you for all that you do!
Leo Linbeck
Chairman/CEO
Americans For Fair Taxation |
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Last Updated ( Friday, 14 April 2006 )
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