Treasury Secretary Paulson has called for it, Chairman of the Ways and Means Committee Charles Rangel has proposed it, Bulgaria has already done it. Now we can add more voices to the growing chorus. Yesterday Minority Deputy Whip Eric Cantor introduced the Middle Class Jobs Protection Act (news release here) . Notably, the bill will slash the corporate rate from 35 percent to 25 percent.

Sound familiar? We thought so, too. It’s in fact exactly what the NAM has proposed in our Tax White Paper – A 21st Century Tax Policy to Promote Job Creation and Economic Growth.

In addition to a corporate rate cut, Cantor’s bill (H.R. 4995) also provides for 50 percent bonus depreciation for 2008 and 2009, brings back the five-year carry back period for net operating losses, expands section 179 expensing for purchases up to $1 million, and increases the carry back period for business tax credits from one year to three.

They call it middle class jobs protection – we call it pro-growth and pro-manufacturing.

Dorothy Coleman is vice president of tax and domestic economic policy at the National Association of Manufacturers.

When you’re talking stimulus, it’s clear that economic growth and tax increases don’t mix. We’re happy that House budgeteer and member of the Ways and Means Committee Paul Ryan (R-WI) echoes our concern:

House Budget ranking member Paul Ryan, R-Wis., said the most important immediate step would be to block any potential Democratic plans for tax or spending increases. “Most important of all for the markets and economic growth is tax certainty and good fiscal policy. My concern is that Democrats are banking on enormous tax increases,” Ryan said. “I think the first order of business for good economic growth is ‘Do no harm.’”

From Congress Daily (subscription).

Dorothy Coleman is vice president of tax and domestic economic policy at the National Association of Manufacturers.

Today’s New York Times has a story on President Bush’s economic assessment in Chicago. In recent days, the President has suggested that a stimulus package might be needed to counteract disconcerting economic indicators. Some Democrats also are talking stimulus. According to the Times, Speaker Pelosi has met with advisors to develop her own stimulus plan before the State of the Union at the end of this month. If policymakers are looking at stimulating the economy, we have a few suggestions:

1.) First, let’s start with what we know works: Reinstate a retroactive and strengthened, multi-year extension of the R&D Tax Credit. Despite bipartisan support for this proven incentive, Congress last year failed to pass legislation to extend the tax credit before it expired December 31st. This is a jobs issue — more than 75 percent of the the credit dollars are used for salaries of employees engaged in R&D. If Congress and the President are serious about keeping unemployment numbers low, then they’ll immediately reinstate and strengthen this pro-growth credit.

2.) Get serious about lowering the corporate tax rate. Paulson’s recommended it, Rangel’s in favor of it, and countries around the world are doing it. (Tax Foundation backgrounder.) Major U.S. trading partners, including Germany, France and Spain all recently have cut theirs and the United States is on its way to having the highest corporate tax rate in the OECD. If you want to grow business in the United States — and attract new investment — cutting the corporate rate is a great start. (Tax )

3.) Permanently repeal the death tax. The estate tax rate is phased down again in 2009, it’s repealed in 2010 and then the rate goes back up to 55 percent in 2011. Can you say planning nightmare? Our small- and medium-sized manufacturers report paying an average $90,000 a year in planning costs alone for this tax. Permanently repealing the tax will provide certainty and free up a lot of cash for expanding businesses and growing jobs.

And, one more note to policymakers: A stimulus is not a stimulus if it includes tax increases. In the last session of Congress, legislators proposed a number of ill-advised, anti-growth tax increases that would cost manufacturers billions of dollars and make it even more difficult for them to weather economic storms.

Dorothy Coleman is vice president of tax and domestic economic policy at the National Association of Manufacturers.

[A dispatch from over the weekend.]

The ACTPN delegation headed toward what, in 2003, was a virtually unknown island of 3,5000 residents in the East China Sea. Today this island is the home of the Yangshan deepwater port, the third largest port in the world. The Chinese took just four years to construct a massive port off the mainland and develop a 30.5 km (19 miles) bridge and connecting the two. (Here’s a photo of the bridge.)

To provide perspective on Yangshan’s size, let’s look at its progress: In 2003 it was a small island of 3,500 residents. The population was relocated and in their place is a port that will move 7.5 million containers (TCUs) this year.

The volume dwarfs America’s largest port, the Port of Long Beach, which moves 1.5 million TCUs/year and illustrates how China’s preparation for moving goods as global trade expands. Yet they’re only just beginning: By 2020, when its fourth and final phase is complete, Yangshan will move 15 million TCU/year, making it the world’s largest port. Where will America’s infrastructure be in 13 years?

More photos: 1. A view of the port. 2. Ship loading.

Read today’s International Herald Tribune (IHT) article [New York Times story here] about the stunning debut of PetroChina on the Shanghai Exchange and it’s a certainty that China’s largest producer of oil and gas just took over Exxon as the world’s largest company by market capitalization.

But not so fast, says Andrew Batson in today’s Wall Street Journal [subscription story here]. A veteran journalist who has lived in China for 10 years and understands the country’s complexities as well as any journalist, Batson (who joined Gov Engler and the ACTPN delegation for breakfast on Tuesday in Beijing) points out:

The soaring valuations put on PetroChina and other Chinese-listed companies seem to say more about the problems and idiosyncrasies of China’s market than the performance of the companies themselves.

In fact, it is very difficult to determine the real value of Chinese government-controlled companies like PetroChina.

[These companies have] complicated corporate structures that keep most of their shares locked up in government hands, with the few that are publicly traded spread across different markets. The scarcity can drive up prices. And the problem is compounded by China’s capital controls, which can cause domestic prices to differ greatly from those on other markets.

Batson points out that only 2.2 percent of PetroChina’s shares were made available during yesterday’s IPO. Those shares nearly tripled in price, from 16.70 yuan to 43.96 yuan, or about US$5.90 each,

If you’re into fuzzy math, like the IHT and apply that price to all of PetroChina’s shares, the company would have a market capitalization of around $1.08 trillion, twice that of Exxon. But Batson (and the Journal) live in the real world, where we calculate the figures we have, not those PetroChina wants!

About 86 percent of PetroChina’s shares are held by its state-owned parent and don’t trade on any exchange, and it is hard to know what price they would fetch if all of them were actually to come to market…

Another way of valuing the company would be to apply prices only to what investors can actually buy and sell — the so-called free float. The total value of PetroChina’s publicly traded shares is about $72.5 billion. That’s still large, but nowhere close to Exxon Mobil.

Thank you for the clarification Mr. Batson, and reminding us the world’s largest company still hails from the good ol’ U.S.A.

[More from J.P. Fielder, senior communications director, from NAM President John Engler's trade mission to Japan and China. In China, Engler is heading a delegation that represents the President's Advisory Committee for Trade Policy and Negotiations, or ACTPN.]

Two very interesting points from the ACTPN delegation’s meeting with James Fallows, senior editor for The Atlantic Monthly and arguably the most knowledgeable journalist about the interrelation of U.S. and Chinese manufacturing. (His July cover story was, “China Makes, the World Takes.”)

First, Japan still dwarfs China in overall GDP and that we cannot lose focus on this important ally and manufacturing partner. This is something we discovered last week as the Japanese, from business leaders to government officials, were highly appreciative of Gov. Engler’s visit.

Second, protecting intellectual property should be a priority for U.S. policy toward China, and there’s plenty of work to be done. As a casual observer, I was struck by the prevalance of counterfeit products in China. Sure, everyone expects the swarms of vendors selling knock-off Rolexes, Coach purses and “Beijing 08″ knit hats, but I became painfully aware of the issue while driving to the Great Wall during our one day of touring, on Sunday.

As we passed a roadside construction site, Al Bernard, an ACTPN delegate and senior vice president of Manitowoc, manufacturer of heavy cranes, pointed to one of the backhoes working at the site. “That’s a counterfeit backhoe,” he suddenly said. “WHAT!? How can you tell?” I asked. This side of counterfeiting is very new to me, as I thought it was an industry making cheap junk (think T-shirts, purses and poorly constructed watches) in a garage. Wrong! This is about real American products being ripped off and built in foreign factories. In this case, it was a Caterpillar backhoe, not exactly something you slap together in the back garage but something that requires a legitimate assembly line and manufacutring facility.

Caterpillar is a strong all-American company based in Peoria, Illinois. Chinese free-riding on the ingenuity of hard-working Americans, not to mention the millions in R&D, is just not right. The rampant counterfeiting needs to be addressed by the Chinese government and with consultation from the international community, if necessary.

[Editor's Note: NAM President John Engler is on a two-week trade and business mission to Japan and China, working with U.S. manufacturers and trade officials. We plan regular reports from abroad. In this entry, communications director J.P. Fielder gives us the lay of the land.]

To increase industrial cooperation between the U.S. and our major trading partners in Asia, NAM President John Engler launches two weeks of high-level meetings in Japan and China today.

This evening we landed in Tokyo for a whirlwind tour of the world’s second largest manufacturing nation. Why Japan when everyone is talking about the growth and importance of China and India? Well, Japan remains the world’s second largest economy, still nearly twice the size of China and a major trading partner to the U.S.

On Wednesday we will crisscross Tokyo, beginning with Gov. Engler’s appearance on CNBC’s Squawk Box Asia, followed by meetings with Sony’s President and CEO Dr. Ryoji Chubachi, Honda Chairman Aoki, executives from Nippon Keidanren (the NAM’s equivalent in Japan) and CISTEC, the Center for Infirmation on Security on Trade Controls. All of this before 5 p.m., when we’ll board a train to Nagoya in preparation for Thursday’s meeting with Toyota Chairman Cho (Toyota, based in the aptly named Toyota City, is just outside Nagoya).

Several substantive issues Gov. Engler is looking to discuss throughout the day:

Other points of interest we’ll keep you updated on after day one in Asia:

The Science of Success: How Market-Based Management Built the World’s Largest Private Company
by Charles G. Koch
CEO, Koch Industries, Inc.

Koch Industries has grown 2,200 fold over the past 40 years and is the world’s largest privately held firm. The NAM-member company produces some of the world’s most recognizable products, including STAINMASTER carpet, Dixie cups and Quilted Northern tissues, among its many product lines. Those distinctions alone would earn Charles G. Koch’s book, The Science of Success, a prominent spot on the recommended reading list for executives.

But what makes The Science of Success so compelling is that Koch introduces the reader to a remarkable business philosophy, Market-Based Management ®, or MBM, that engages Koch employees in “a passionate pursuit of innovation toward an unknown future of ever-greater value generation.”

MBM, as a business philosophy, embraces those timeless principles that allow a free-market society to achieve prosperity and societal progress, and applies them within the context of an organization and its mission. Though Koch focuses on how MBM has been applied within his company, he is quick to point out that it is equally applicable at institutions ranging from non-profit organizations to government agencies.

By relentlessly applying MBM, Koch Industries avoids the natural tendency toward complacency that can accompany financial success. “MBM teaches that we must continually drive constructive change in every aspect of our company or we will fail. As a result, we continually pursue innovations and opportunities through internal and external development and acquisition.”

This book is not a self-congratulatory memoir. The author candidly describes instances in which the company did not apply MBM effectively. He lists not only the firm’s major business groups, but also the many businesses Koch has exited because it found higher-valued alternatives for its resources, be they raw materials, corporate assets or human talent.

While MBM is a weighty topic, the The Science of Success reads quickly and easily, with great insight for the reader. We recommend the book highly.

Bill Lockyer, the super-litigious, super-political attorney general of California — who has declared war against manufacturers and CO2 — has earned the San Diego Union-Tribune’s endorsement for state treasurer. A begrudging endorsement, to say the least:

The Democratic candidate for treasurer, Bill Lockyer, has displayed a vicious partisan streak in his eight years as attorney general, using his powers to sandbag initiatives he doesn’t like and to file frivolous lawsuits solely to score political points with unions and environmentalists. In his previous job, as Senate president, he was the epitome of the pay-to-play Sacramento culture, famously blocking a law meant to keep criminals out of California casinos and card clubs after taking hundreds of thousands of dollars in donations from the gambling industry.

Incredibly enough, we have no choice but to endorse him. His Republican opponent, Board of Equalization member Claude Parrish, is simultaneously flippant, uninformed and unfocused. Lockyer may be the devil, but he’s a smart devil. Were Lockyer treasurer, it is incomprehensible that Californians might someday wake up to learn that the state had lost billions of dollars because he made complex financial decisions without due diligence. That is not the case with Parrish.

We set out to give Lockyer the most grudging election endorsement in the history of the printed word. We hope we have achieved our goal.

Indeed! (Hat tip Taranto.)

South Dakota manufacturers held a news conference in Sioux Falls yesterday to argue against passage of Amendment E, the initiated constitutional amendment to hold judges and other elected officials personally accountable for decisions they make as part of their official duties. NAM Board Member Jay Bender took the lead:

Manufacturing officials from around the state spoke up Monday about their fears that Amendment E would stunt economic growth and hinder community involvement.

“The proposed Amendment E is a job killer for South Dakota,” Jay Bender, president of Falcon Plastics of Brookings, said during a press conference Monday in Sioux Falls.

“It has a potential to create judicial chaos for businesses nationwide. Since judges will know they can be sued for dismissing frivolous lawsuits, they will be reluctant to do so.”

Amendment E, also known as the Judicial Accountability Initiative Law, would create a special grand jury to review complaints against those with judicial immunity, which would include members of juries, school boards, city councils and other boards.

Several manufacturing companies operating in the state, including 3M Company, Raven Industries, Tyson Foods and Showplace Wood Products, will partner for an advertising campaign that will oppose the proposed amendment.

KELO story here. Also big news Monday:

South Dakota U.S. Sens. Tim Johnson and John Thune, along with U.S. Rep. Stephanie Herseth, Republican congressional candidate Bruce Whalen, Gov. Mike Rounds and Democratic gubernatorial candidate Jack Billion announced Monday their opposition to the amendment.

NAM webpage with facts about the ill-considered, ill-tempered amendment is here.