Professor Elam

Prof Tom sowelltakes a look at the taxing plans of Barack.  As he says this has been tried in many countries, it never works. England was just about reduced to Belgium before Lady  Thatcher took over. France and Germany are legends in their own minds, certainly not in their economic importance as unemployment in both soars past 10%.

While politicians say they will penalize companies that send jobs offshore, the reason companies do that is self interest. When the overall tax burden, including payroll taxes, becomes too high, companies stop buying employees. This is clear in the trend of outsourcing the local payroll to Addeco or Kelly Services in manufacturing firms in Austin. The next logical step is to eliminate the local workforce altogether and take your chance on the dicey legal environments of India, China, or now Viet Nam or Bangladesh. Companies conclude that most anything is better than enduring endless scrutiny and fines and taxes on everything they do, and that includes hiring employees. FICA tax on a $0 K employee is about $7500, and for what?  That buys one participation in Social Security, a scheme no state insurance commissioner would endorse.

One need look no further than Michigan to see where endless 'benefits from employers' gets the workers, the employers simply leave the state and move to Mississippi and Alabama. Michigan by the way has the worst economy in the nation, tied with Ohio, both have a net outflow of residents.  Yet Michigan and Pennsylvania and Ohio, all failed economies, may well decide this election.