Today we begin building our “People’s Platform” starting with our number 1 priority…restoring U.S. manufacturing to its once dominant position in the world.
President Roosevelt converted a powerful U.S. manufacturing behemoth into what he called he called “The Engine of Democracy” and used this to out-produce Japan and defeat them in WWII. Reagan used this force to win the cold war by out-producing the Soviet Union in an arms race.
Our platform starts with restoring the engine of democracy to international respectability.
The People’s Platform:
Restore U.S. Manufacturing with balanced trade
- Confront China on trade relations
- Implement the Michael Graetz tax reform plan
In the 1990’s, the Clinton administration opened up trade with China. China was granted Most Favored Nation status with respect to trade with the U.S. and was allowed to join the World Trade Organization. The Chinese government immediately showed their mercantilist tendencies by devaluing their currency by 40% and pegging it to the dollar. That peg remains in effect today giving Chinese manufacturers a huge advantage over U.S. products.
Our tax code has always been a mess. It has evolved into its current form primarily due to political considerations to hide the true cost of government from the voters. Rather than tax consumers (voters) directly, we tax producers which buries a portion of the cost of government in our products. When America was the primary producer and consumer of U.S. products this wasn’t a problem. Now that we have promoted globalism and free trade, this is a huge problem since U.S. made products are inflated by hidden taxes.
With a simple policy change and smart tax reform, we could start a manufacturing renaissance in America that would grow the economy well past the 4-6% growth rate that is normal for the end of a recession. This will create millions of good paying domestic jobs.
- The first change is to confront Chinese protectionism by imposing a Counter Veiling Duty commensurate with the amount of Chinese cheating. This could be accomplished as Reagan did….with an executive order. It could also be done by addressing Chinese cheating legislatively.
- The second change will require work by Congress to reform our tax code to more modern methods such as a Value Added Tax (VAT) or national sales tax so that the U.S. tax burden is shared equally between exports and imports. Several plans have been developed to do this. Our platform calls for implementing the tax reform plan developed by Professor Michael Graetz.
Professor Graetz’s plan is as follows:
- Add a 12.3% VAT
- Exempt first $100,000 joint filer income from personal income tax ($50,000 single filer income) – Result: 100 million people exempted from income tax
- Personal income tax rates at 16% or 25% for incomes over $100,000
- Reduce corporate income tax from 35% to 15%
- Rebates to very low income filers through earned income tax credit or debit card refunds
Source: Graetz, “100 Million Unnecessary Returns” (2008)
- Neutralize foreign VAT advantage
- Revenue neutral as compared to current system
- Progressivity neutral as compared to current system
- Incentivize domestic savings, investment and supply chains
- Reduce aggregate domestic tax burden by adding imports to the tax base
There is some consensus forming among American voters for both of these policy changes. We need to insist that Congress build on the beginnings of common ground or expect to be replaced with other who will.
Frank Shannon served in the U.S. Army, was an engineering/operations manager for AT&T for 27 years, was the owner of a small manufacturing business for 23 years, served as Colorado Chair of the Coalition for a Prosperous America and moved to Mesquite in 2013.