Open Letter to Rep. Dave Camp

by Don Boudreaux on March 12, 2012

in Business as usual, Seen and Unseen, Subsidies, Taxes, Trade

Rep. Dave Camp (R-MI)
Cannon House Office Building
Washington, DC

Dear Mr. Camp:

Trumpeting your bill to slap extra taxes on American consumers who buy subsidized Chinese goods, you assert that “Our companies and workers should not be expected to compete against the deep pockets of the Chinese government.”*  Myriad flaws infect your assertion, not the least of which is hypocrisy: Uncle Sam itself is a world-class subsidizer that routinely shovels untold billions – through the Ex-Im Bank and other corporate-welfare boondoggles that you proudly support – into the coffers of countless American corporations.

Another flaw is your economics.  The “deep pockets of the Chinese government” that so agitate you are not filled with money dropping like manna from heaven.  They are filled with taxes imposed on Chinese citizens.  So to artificially lower with subsidies the operating costs of some Chinese producers Beijing must artificially raise with taxes the operating costs of other Chinese producers.

Your bill, therefore, is too timid.  To fully compensate for the effects in America of Beijing’s economic meddling, Uncle Sam must slap extra taxes also on those American firms and workers who are artificially rendered – not by their own merit, but by the “tax” part of Beijing’s tax-and-subsidize policies – better able to compete against those Chinese producers whose costs are artificially raised by Beijing’s economic intrusions.

Will you propose such a tax?

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA  22030

* As quoted in “Congress Clears China Import Legislation,” Congressional Quarterly, 9 March 2012.

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