Tuesday, December 1, 2009

Making the case for a National Industrial Sector Tax Policy Vision:

I have had occasion to take the train from Bridgeport to Baltimore for business trips and as I pass the backend of the cities and buildings along the route it is apparent that our industrial sector played a huge historical role in the growth of urban communities and our economy at large. As the train would click clack its way along the rail I would peer out the window and visualize what used to be vibrant industrial cities. Still visible are the painted billboards on the side of the brick walls of these aging industrial structures. Looking closer I can trace rusting dormant track extending past the loading docks that a century ago moved value added products, the outcome of applying human labor, to destinations throughout our country.

In our current reality, once productive industrial businesses are for the most part long gone and left in their place is an economic void. Around these pockets of despair and hopelessness are people searching for any means and opportunity to provide for their families. Lacking a secure job families break down from the financial pressure. Many end up in the prison system, undereducated and with little hope to ever live the American dream. This is an extreme waste of human capital. Maintaining a prison system is very expensive and the productive society ends up footing the bill with higher taxes. This is an example of unproductive tax policy. But it doesn’t end there. To fund the schools and services in our stressed out cities government imposes forever escalating taxes on home owners and surviving businesses, dampening investment and fueling a vicious economic downward spiral.
How do we reverse this trend?

In my view we must start with the notion that although taxes are required for the collective well being of society, some taxes are better than others. A smart tax policy is a wealth multiplier. A bad tax smothers the means of production. We need Smarter Tax Policy for the Industrial Sector.

Not everyone is qualified to run a Hedge Fund or be an Investment Banker. Most of us just need a good steady secure job in a factory.