Rather, I think you should be worried about your standard of living, the prices you pay for goods and services, the availability of products you depend on, and your ability and your family members' ability to get a good job. Our company stands as an example of the carnage to come. We are but a convenient example. I just happen to know a whole lot about this particular example, which makes it easier for me to explain it to you with insight and accuracy.
In fact, the number of companies affected by this proposed law is practically uncountable, at least by me. The industries likely affected goes far beyond the obvious examples that may pop immediately into your head. Sure, toys and apparel, those are obvious examples. Retailers, too (and they are hardly in the strongest financial condition these days). But other industries will be affected. Automobiles have a lot of foreign content, both parts sourced from outside the U.S. as well as inputs in components sourced from domestic as well as foreign suppliers. Consider this list of top ten U.S. imports:
- Electronic equipment: US$332.9 billion (14.4% of total US imports)
- Machines, engines, pumps: $329.3 billion (14.3%)
- Vehicles: $283.8 billion (12.3%)
- Oil: $201.2 billion (8.7%)
- Pharmaceuticals: $86.1 billion (3.7%)
- Medical, technical equipment: $78.3 billion (3.4%)
- Furniture, lighting, signs: $61.2 billion (2.6%)
- Gems, precious metals: $60.2 billion (2.6%)
- Organic chemicals: $52.1 billion (2.3%)
- Plastics: $50.2 billion (2.2%)
Ummm, can you see this affecting you now? Electronic equipment (TVs, stereos, phones), machines (the equipment used in U.S. factories), cars (forget that cheap Prius), oil (speaks for itself), furniture (no more bargains at the local furniture store), gems (weddings just got more expensive - there are no American diamond mines), plastics (do you ever use anything made out of plastic?).
There are no banana plantations in the U.S. Bordeaux wine, Corona beer and Scotch whiskey aren't made here. A lot of hardwood comes from Canada. We import fruit and nuts by the boatload. Marble comes from overseas. Footwear is from China (Nike makes a huge percentage of its products overseas). Medical technology equipment and lab supply equipment comes from Germany, Japan and many other Western countries. Metals, including aluminum, plus rare metals and key elements needed in high tech manufacturing come from elsewhere. Get it yet? The United States is part of an integrated, global supply chain.
In fact, global supply chains are not only part of our daily lives, but they are also a deterrent to war. You have to think twice about bombing your good supplier. Mutual dependence on international trade makes it very costly to unsheathe your sword. In other words, we enhance our national security by trading with many partners and by helping them build wealth and create jobs. Nothing and nobody exists in a vacuum.
And do you think Learning Resources is the only U.S. small business?? According to U.S. Census data, there are 5.73 million employer firms in the United States, but only 99.7% are considered "small businesses" under Federal standards. If you take into account the 23 million non employer businesses in the U.S., 97.9% of all businesses employ less than 20 employees.
I think it is critical to evaluate the Border Adjustment Tax in light of facts, not supposition or surmise. Our company, Learning Resources, is not a rounding error. The self-justifying economic theory undergirding the BAT will be cold comfort if any of our employees lose their jobs to fund excessive Federal taxes. Their mortgages will go unpaid, their pension plans will go unfunded, their college savings will dry up and blow away. This matters a great deal to them, to their families and TO ME. Smug macro theories hardly make these effects meaningless, and my opposition is certainly not about my personal well-being.
We are in this together. This is our home and our Federal tax system is a critical means of funding the benefits we enjoy in this society. Let's not minimize or marginalize these issues. If we gloss over these problems, somebody will pay the price. I know I will among them. And I feel confident you will join me.
Let's not go down that path.
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