Parting Shots: Candidates must embrace solutions or step aside

Mar 31, 2012 | 07:00 PM | Tom Graham

Tags  Parting Shots, 2012 Republican primary, Thomas Graham

The Republican presidential candidates are being forced by Rick Santorum to discuss techniques to help manufacturing. There is a growing concern that our economy is becoming so dominated by health care and other service industries that our ability to produce something is diminishing, to our long-term disadvantage. Santorum’s suggestion is a preferential 15-percent corporate income tax on manufacturing companies. He has detected an important problem, but has proposed the wrong solution.

Using the tax code to help—or hurt—specific sectors of the economy is the politician’s classic remedy for all problems. It has resulted in a 15,000-page tax code that requires a large Internal Revenue Service to enforce it and has created, on the other side, a large counter-industry of lawyers and accountants to represent the taxpayer. As is now obvious to everyone, manufacturing has withered in recent years—but so has commercial construction, home building, retail banking, air travel, etc. Instead of picking favored sectors to help (wind and solar energy) and other sectors to punish (oil drilling, private equity....