Why are jobs moving from the US overseas. Because our corporate tax structure says they should. Once again government is the problem not the solution.
The best and purest “example” of pro-growth tax-RATE reductions can be seen in the “Steiger Amendment” that actually got passed in the latter years of the Carter Administration. Bill Steiger was one of the great proponents of supply-side economics before Reagan came along and took up the cause. From a blog on the Steiger Amendment:
“Steiger’s belief that Republicans had a special obligation to ordinary Americans was the basis for the Congressional tax revolt he led against President Jimmy Carter. By the late ‘70s, the prosperity of the broad middle class was eroded by inflation, unemployment, rising Social Security payroll taxes and property taxes, tax bracket creep, and a stagnant stock market. Democratic tax relief programs had tended to benefit the very poor or special groups (such as the elderly), while only the rich could take advantage of tax loopholes. The Steiger Amendment of 1978 proposed to cut the capital gains tax in half, thereby encouraging widespread stock ownership, unfreezing capital for investment, and facilitating the growth of new companies and the jobs they would produce. (Steiger had been shocked when one California entrepreneur testified that he could find venture capital only in Japan.) Tax reform was an idea that appealed to millions of Americans who sensed that something was amiss with the nation’s economic and tax policies. Somewhat to Steiger’s surprise, he managed to gain enough Democratic support for his proposal that Carter was forced to sign off on a reduction of the capital gains tax rate from 49 to 28 percent.
The passage of the Steiger Amendment, according to former Wall Street Journal editor Robert Bartley, marked the moment when “a decade of envy came to its close, and the search for a growth formula started in earnest.” Supply-side economists credited the amendment with launching a venture capital boom that launched companies like Apple, Sun Microsystems, and FedEx. Steiger died before he could see his bill enacted and its results come to fruition. His last writings and interviews suggested that he would have attempted to account for how much of the increase in business startups could be attributed to the tax cut and how much to other factors, and would have tried to ensure that as much of the benefits as possible accrued to the middle class, particularly to minority-owned businesses.”
It took a few years for this to kick in and working in combination with Reagan’s tax cuts, we finally exited the malaise of the Carter years (August 1982 was the big turning point): the stock market took off; the economy took off; investment took off; 18 million jobs would be created in the 1980’s (around 25 million when you include the 1990’s which benefited from all of this growth and investment). It was the greatest period of economic growth since the 1920s... In large measure because of tax-RATE cuts.
And, incidentally, the CUT in the capital gains rate caused a huge increase in capital gains tax REVENUES to the government in the 1980s and when Clinton did it (pressed by the GOP congress) in the late 1990s. When you hear Clintonoids talk about how Clinton balanced the budget, be sure to remind them that it was capital gains tax revenues spurred by those RATE CUTS, that provided the most juice to closing the deficit at the end of the 1990s.