Since 1776, thousands of Americans have died in wars to keep us free. However, they did not die to make us free in order to impoverish “America the Beautiful" with lavish consumption of foreign products. Instead, this occurred because of the way our federal taxation system penalizes American producers and rewards imports.
The 'global economy' is an economic war for markets (money), and our so-called allies are in that war. They have a value added tax system (VAT), which subsidizes their exports of goods. We rely on an outdated income tax system that makes our exports more expensive when they arrive at their destination because they are subjected to that country’s VAT. Major foreign competitors without a VAT on their exports sell their products at a 8% to 22% lower price in the U.S. market because we do not impose a VAT on imports. (The percentage varies widely among countries worldwide.) Low-cost labor in other countries is another factor that disadvantages U.S. producers in competition with imports into the U.S.
Our trade imbalance is of our own making largely because of our country’s system of taxation. Since the mid 1970’s, the onslaught of imports accounts for the loss of good paying manu-facturing jobs and the decrease of our middle class, as a percentage of national family income.
More and more, America is becoming a two-class society, upper and lower, with dangerous consequences. An end to the trade deficit in goods will be difficult to achieve. The causes are not complex, but dominant interests benefit from our present income tax system. The typical American is indifferent or ignorant about the trade deficit. However, to save our country, we must stop the trade deficit and begin a surplus.
"A society does not change in sudden jumps. Rather, it moves in multiple small steps along a broad front. Most of these steps are parallel if not quite simultaneous; some advance farther than others, and some even move in an opposite direction. The movement rather resembles that of an amoeba, with one part of the body extending itself outward, then another, even while the main body stays back, until enough of the mass has shifted to move the entire body.” Rising Tide, John M. Barry, Simon & Schuster, 1997 pp. 421-422.
The Decline of the American Economy
The amoeba is a metaphor for the American economy’s continuing deterioration resulting from the trade deficit year after year. Imperceptibly but continuously our economy weakens. The trade deficit transfers the wealth of Americans to foreigners. They use that money to buy our federal debt, our companies or their product lines, and our real estate. (For 2017 the United States had a trade surplus in services. With that surplus, our overall trade deficit was lowered from $2.2 billion a day in goods only to $1.5 billion a day in total. Does a transfer of only $1.5 billion a day to foreigners then make the deficit acceptable?) As with a person, household, company--any economic entity, such as the United States, continuous deficits will inevitably cause a financial collapse in one form or another.
How to Stop Selling Out America
1. Abolish the income tax (a tax on production, savings and work), and replace it with a national retail sales tax (a tax on consumption). Imports will be taxed and exports exempted from taxes. Ask your U.S. Representative (locate at www.house.gov) to support HR 25 and your Senator (locate at www.senate.gov) to support S 18.
2. Buy products Made in the USA.
3. Do not impose tariffs. They lead to retaliation by other countries against our exports.
Ben Mathes has worked in international trade for 52 years, first as an international trade specialist for the U.S. Department of Commerce in Washington, D.C., Dallas and Houston. Then, he has held executive positions with companies that exported and competed in foreign markets. He has traveled to twenty-eight countries on business. Mr. Mathes earned his Bachelor of Arts, Political Science, from the University of Maryland and his Master of Arts from the School of International Service, The American University, Washington, D.C.
He is a U.S. Army veteran and resides in Houston, Texas.
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