Outsourcing and
the Trade Deficit
If you give incentives to companies that produce in the US, and take away the incentives from US companies that
produce products elsewhere for consumption in the US, the US producing companies will be able to lower prices, while the
others will either have to raise prices or keep them as they are.
The people of the US will pay more for US made merchandise
if given a choice. One reason people buy imports is because there are no US made product to compete with
them on the store's shelves. Don't sell the American public short on this
one. By the way, I DO shop labels, when I can.
What If
There are plenty of items made both abroad and in the USA. Let's take a look at one item in particular:
A heavy-weight denim work shirt made in the USA costs the consumer $24.95. A similar shirt made overseas costs the consumer
$19.95. If given the choice, a consumer might buy the USA made shirt and pay the extra $5.00. If there were incentives given
to the company that manufactures the shirt made in the USA, it might be possible to for that company to pass the savings onto
the customer. That shirt might now be sold for $22.50 instead of $24.95. As an additional incentive to the consumer, a
reduction in the sales tax might be given on the item made in the USA; or a 2% to 3% tax might be added to the import item. This could be used as part of the incentive
given to the company that manufactures in the USA.
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