Ursinus Students Tackle Campaign Promises, Taxes and Jobs

Ursinus Students Tackle Campaign Promises, Taxes and Jobs

In an election year, a person can expect to hear a lot of outlandish promises made by the candidates. It’s a bipartisan tradition, to be sure. Maybe my favorite was Governor Rick Perry’s statement that, as president, he would make sure that Congress was in session only half as long as they are now, in any given year. Of course, he neglected to consider that our Constitution establishes Congress is a co-equal branch of government, and will meet as often or as seldom as it wishes, with no interference from any president.

 

In the International Business class that I teach at Ursinus College, we have taken a particular interest in the various proposals dealing with the U.S. corporate income tax structure, and how it may or may not affect job creation here in America. Perhaps the most aggressive proposal comes from Rick Santorum, who advocates a 0% tax on manufacturing companies. He predicts that this will bring back those manufacturing jobs that have been lost to China and other countries during the process of globalization.

 

My students are taking a keen interest in understanding how job creation might be affected by tax policy. Anybody who read the 2-part article on iPhone manufacturing in China, which ran in the New York Times last week, will understand that job migration is the result of many complex economic and policy factors. The students are appreciating that international business executives operate in a complex world, and need to carefully consider economic and policy matters as they try to maximize their profitability and reach their strategic goals.  Although certain tax policies may be directionally helpful, it is far from clear that tax policy alone is enough to effect permanent change.

 

My students are working to understand the most popular tax proposals being made in the campaign, and to analyze the arguments being advanced in support and opposed to each. I will report their findings on a future blog, and invite you to share in their thinking. The students in my class are an extremely bright and capable group, and through this blog I hope to be able to extend their thinking and observations beyond the classroom.