Yes, you read that right. Why is America bad for business? The fact is, America is bad for business. Not only is America bad for business, but also a small handful of states are also contributing to that label. Now that you have cursed and condemned this blog for making such an un-American and broadly inaccurate statement, let’s walk through a few thoughts about why this may be true and see if you agree.
Thoughts About Why
We have heard all about ‘Making America Great Again’ since the election and we have heard how our President-Elect will address the issues he believes will change things for business investment in America. The President-Elect has went so far as to intervene with Carrier to keep jobs in America. However, Ford has signaled that it will continue to move some production out of the country. Other businesses have also signaled they will also continue to move their production, without regard to the position on the President-Elect. Whether you agree with this intervention or analysis, here are some facts that do attribute directly to why business investment is moving:
Corporate Tax Rate – America has the dubious honor of having one the highest corporate tax rates in the world. The current rate is 35%.
Labor Cost – The cost of labor equals the cost of production and equals the final cost consumers pay. Whether you like it or not! When a country has lower labor costs, the savings can be passed on to consumers and make a company competitive.
Corporate Regulation – America has another dubious distinction of having regulation from local, state and federal governments that significantly restricts and inhibits business investment and operation. That is disturbing on many levels, especially since we are a republic that touts freedom for its citizens and respectively, their businesses.
Change the Tide of Business Investment
Whether you agree with our current political environment, these three issues are significantly affecting business investment in America. As long as we continue towards heavier regulation, higher taxes and increased labor costs, America will continue to lose business investment to countries that are focused on attracting and keeping business.
The post Business Investment: Why Is America Bad For Business? appeared first on shmula.