Lower Taxes to Bring Back Manufacturing?
So, I heard the other day on Macbreak Weekly that if an $229 iPod was built in the USA, it would end up selling retail for something like $287. The research info came from Harvard Business Review.
I found this pretty amazing. I always assumed, with labor costs, that it would be $1,000′s of dollars to sell an iPod Touch built in the USA. Apparently, the cost of shipping from China is comparable to labor costs for products built in the USA.
Anyway, this reminded me of something similar I had heard years ago at an LED company I worked for at the time. The sales person was explaining to a customer that it was cheaper to build in the USA because you don’t have to worry about shipping costs from Asia.
So, since there is very little difference in cost, one has to wonder why Apple is building products abroad? Maybe it’s because they want to sell the iPod Touch at the cheapest price possible. That makes sense, from a numbers point of view.
One thing that was brought up by Andy Ihnatko was that corporations like Apple have tons of cash overseas, and they are avoiding America’s high corporate tax rate.
So, this made me think: if we the people lowered the corporate tax rate, would this bring back manufacturing?
Now, before you freak out and say, “Vahl! How can we give evil corporations a tax break! They don’t deserve it!” Ask yourself this: would you rather big companies like GE and Google pay 0 taxes by keeping their money overseas, or would it be better if we lowered corporate tax rates and got these companies to pay some taxes?
The answer is obvious, to me anyway. It’s just a thought, and a potential side benefit is that manufacturing would return to the US, and slave labor would be reduced around the world. Just sayin’.
