Would it be beneficial for the U.S. to give tax incentives to businesses like Walmart to have some of their...

Question

larger manufacturing facilities locate to Mexico instead of China?

I think you've all, so far, missed the boat as well as the point of the question.

Answer 1

Make no mistake about it, the executive management of any corporation has one job and one job only: to increase the value of the owners' equity. So, it is up to society to choose how and where we assign value. As a society, we have placed value on accumulation of monetary wealth, therefore the executive management of a company will have incentive to increase the monetary worth of the company. This is done by maximizing assets and minimizing liabilities.

Labor expenses are variable costs that reduce assets. As my former CIO used to say, "Variable costs wear shoes." So, as long as corporations can reduce costs by farming out their work to places where it costs less to get the same work done, they'd be nuts not to do it.

Once the salaries for folks in Mexico and China catch up to U.S. salaries, then the incentive won't be there anymore. Also, with the cost of energy driving shipping costs up through the roof, it is conceivable that it could soon become cheaper to do the manufacturing closer to the markets. Mexico might become cheaper by the fact that goods manufactured there can be shipped by rail instead of by container ships and then rail. Of course, it may become cheaper to manufacture right in the U.S.

By and large, governments should stay out of free market economies. Market economies eventually self-regulate by their very nature, and governments seem to mess up everything they touch. Even their little social engineering projects end in dependency and disaster.

Answer 2

It would be more beneficial to get rid of all bogus taxes on business since they merely collect money from consumers and pass it along to the government. You would end up with more manufacturing facilities in the US than you could shake a stick at.

Answer 3

Big Wal-Mart is a sore subject everywhere lately.What makes sense and what Wally World will do is usually two different things. Beneficial to the USA how? Do you know a politician that wants to turn loose any tax money for any reason unless someone is twisting their arms?
After seeing how Wal-Mart treats their employees(my son) I swore off Wal-Mart shopping and tell everyone else to try to do the same.
...jj

Answer 4

Why not Ohio or North Carolina instead of Mexico?

Answer 5

Possibly, though I'd prefer the manfacturing centers located in the U.S.