We’re Fools For Being Number One

Just in time for April Fools, on April 1, the United States became the country with the highest corporate tax rate in the world. This was triggered by Japan reducing their rate. As cited by The Daily Caller, “Our top corporate tax rate has hovered at 35 percent for years. Meanwhile, other countries have gotten the message that lowering corporate taxes encourages growth. Canada has engaged in a series of cuts, ultimately reducing its corporate rate to 15 percent. Great Britain recently announced it will drop its corporate tax to 24 percent next month and then 22 percent by 2014.”

I know some of you are going to say, well what about all those big companies that pay no taxes? Well you are right. The effective tax rate for the large companies drops us to about sixth highest in the world, according to some economic pundits. The problem is that most companies are not operating like those big guys and it is the small and medium size businesses that are really the economic engine of our country. When you figure that most small business are filing as S corps, then I have heard that the effective tax rate could be as high as 50 percent.

In my state it is even worse since California is broke. There is no plan in sight to create any sort of economic development. Instead we pass the most stringent environmental laws IN THE WORLD that cost billions to California based businesses. Now we have two proposals to increase income taxes, once again, a direct hit to all those small businesses that file as S corps.

For those of you who complain about U.S. jobs moving off-shore, this tax burden is a huge part of that equation, along with the fact that US companies carry about a 20 percent regulatory cost burden above any other country in the world.

Personally, I would love to see the tax loop holes closed up and a movement toward a flatter tax rate. There is definitely a problem when I am in a meeting to discuss tax issues for small business and the two IRS representatives can’t even agree on what the tax law is or how it should be applied.

I know this is a hot topic right now, so share your creative ideas on how you would solve our country’s tax code problems and once again make us competitive with the rest of the world.

Someone help! Is there a machinist in the house?

I fly often, and often enough, that I have actually been on several flights where the call for a medical expert had been requested. The good news has always been that the call was answered in each of these instances.

As many of you know I get pretty passionate about the state of manufacturing in the United States, sided with a deep care for STEM education opportunities we are providing for our kids. The fact that as a nation we tend to no longer value skilled labor is a crime. It has severely affected our ability to remain the largest manufacturing economy in the world, but more disturbing, is that we have limited the opportunities for our children to exploit their talents and entrepreneurial spirit.

I was recently listening to some talking heads on television that said manufacturing was dead because we are now about the use of technology. What an ignorant statement! But unfortunately that is the belief still held by too many Americans. They still think of manufacturing like it existed in the days of Henry Ford — dirty, low wages, oppressive environments, relying on massive amounts of unskilled labor. We have come so far from that!

Almost every machine on my production and machining floor is run by a computer. Guess what, computers don't program themselves. Someone has to write the program that can create the final part needed, and if that’s for a multi spindle or axis machine, that starts to get fairly complicated.

Making chips fly and producing something out of raw materials is an art form as well as a technical skill and we are losing both at an alarming rate in this country.

The impact of this really hit home during my last quarterly sales meeting with my regional sales managers. As each one reported on their top priorities, they talked about the key issues with each customer and what was needed for the project to go to production. Over and over I heard them report that customers can't find the skilled labor they require to make their product. Granted, this is more than just machinists; their request for help includes needed support from mechanical engineers, CAD specialists, technical sales people, protection workers, programmers etc.

How sad that with the rate of unemployment we have in this country, we still don't have the skill sets we need to capitalize on the manufacturing opportunities we have available. How scary it is that when we call out for skilled and technical employees, the response is mostly silence.

Shame on us.