Chairman’s Report - March 27, 2020

• According to the National Association of Manufacturers there were 12,750,000 Americans who were employed by manufacturers.  (What year was this?)
• In 2017, they earned an average of $84,832 a year, this includes pay and benefits
• The average worker earned $66,847, $17,985 less (again, need to know when in order for the comparison to 2017 to make sense)
• U.S. workers are the most productive in the world, thanks in large part to the increasing use of computers and robotics
• The demand for manufactured goods is expected to triple to $30 trillion by 2025 (in the U.S. or world-wide?) and much of this demand will be for more sophisticated goods which the U.S. could manufacture

• A factory manufacturing durable goods and employs 1,000 people and a retail shopping mall employing 1,000 people both shut down
• The 1,000 direct jobs lost are the same amount
  • However, the employment multipliers show what are the actual effects
  • The # of indirect jobs lost for each manufacturing job (jobs supported by the manufacturer) total 744 and the indirect jobs lost for each retail mall job lost are 122
  • This means closing the factory cost the economy not 1,000 jobs but 7,441 jobs
• The converse is true.  When you add 1,000 jobs in a plant manufacturing durable goods this will create an additional 7,441 jobs

🇺🇸  How To Increase U.S. Manufacturing Jobs 🇺🇸

The easy answer is you increase manufacturing jobs by increasing the demand for U.S. manufactured goods.  Since there are few countries in the world whose workers are even close to being as productive as U.S. workers, the U.S. has the ability to manufacture sophisticated goods which few other countries can match.

Why then don’t we see more of these higher paying manufacturing jobs in the United States?  When the number of American manufacturing jobs doesn’t increase in spite of all of the advantages in the U.S., the obvious reason is something is preventing it.

People look around the world and see many European countries who could possibly compete with the U.S., and they point out:

• Regulations in these countries are even worse than in the U.S.
• Their work force isn’t as productive
• Cost of raw materials is often higher
• These countries have higher income and payroll tax rates than the U.S.

A number of factors are slowing the increase of U.S. manufacturing jobs.

However, the largest factor holding down the more rapid creation of U.S. jobs is our corrupt and unworkable income-payroll tax system.

We are the only country in the world who don't reduce the price of our exported goods and services by between 15% - 23%.  How do our competitors accomplish this?

Their tax systems return to the exporter all of the value added-consumption taxes paid from the beginning of the creation of the product until their final product is ready to be exported.  While the prices of U.S. goods produced for export still contain the embedded costs of the income-payroll tax system.

To start with, this gives foreign produced products a 15% to 23% price advantage in the world market.  Then, when those exported products reach our shores, they are not taxed by our income-payroll tax system.

There isn’t a thing wrong or illogical about a consumer looking at 2 apparently identical products, one an import priced 20% less than the U.S. manufactured product, and selecting the lower priced item.

To make matters worse, when a U.S. manufacturer produces a product for export, the U.S. exporter doesn’t get back the embedded costs created by the destructive  income-payroll tax system.  Those costs have to be included in the price.  To make matters even worse, when a U.S. produced product arrives in another country, that country adds its 15% to 23% value added-consumption tax making the U.S. product that much more expensive.

• I am sure Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws

• After they assure you their boss is not in favor of anyone breaking the law, ask if they are aware of the Cebula study showing $9 trillion of evaded income-payroll taxes over the next 10 years

• Since most will say they don’t believe their boss has seen the study, drop off a copy, email a copy or click Read Evasion Study Summary and copy/paste the link into an email

• Say you are going to call back in a week and ask what the Representative or Senator is going to do to stop this evasion

• In a week, call back and ask specifically what the Representative or Senator is going to do to enforce the law

• They probably will say their boss believes simplifying the income tax will handle the problem

• Explain, when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax.  So, it’s unlikely they are going to pay 30-40% when they were paying 0% because they have already decided it’s okay to cheat

• Say, the only way to reduce evasion is to increase by tens or hundreds of thousands the number of comprehensive IRS audits done each year

• Point out Evaders do not self-identify by putting an “E” on their income tax return

• 80% of the people likely to be audited are trying to comply, but they will be forced to endure these IRS audits as well

• Ask if the Member is in favor of this?

• If they say no, then ask again how the Member proposes to stop people breaking the income tax laws

• Then explain the way to handle evasion without unleashing the IRS audits is The FAIRtax

• If you meet with your Representative or attend a town hall and ask these questions, you will be even more effective