Two items, one linked to but now sufficiently highlighted yesterday, the Detroit Free Press editorial, “Hey, America: Detroit’s automakers are asking for a loan“:

Can we get something straight between Detroit and the rest of America?

What the auto industry is seeking in Washington is a loan, L-O-A-N, as in something you borrow and then pay back — with interest.

This is not a gift, a grant or a handout. It’s a loan, the kind of thing financial institutions used to do before they all had to scurry to Washington for their own bailouts, which have been far bigger and subjected to considerably less scrutiny than this loan that the auto industry desperately needs to keep operating — and keep millions of people employed.

And an interesting suggestion from Hugh Hewitt, law professor, radio host, Republican, blogger, “Should the GOP Bargain On The Bailout?”

If the GOP’s leadership in the Senate calculates that it must go along with the bailout of the Big Three because of the overall weakness in the economy, I hope they at least bargain for some concession such as a giant tax restructuring for Michigan and Ohio, a demonstration project on the economic effects of tax reform.  If the UAW and industry supporters are going to succeed in opening a fiscal lifeline to Detroit, couldn’t the GOP at least demand that all of Michigan and Ohio provide a demonstration of what a lower corporate tax rate can mean for an economy.  Call them Irish Zones, after the tax policy of the Republic of Ireland, and declare that companies headquartered in Michigan or Ohio will pay 12.5% corporate tax, as all corporations do in Ireland.

Related story: The New York Times runs a post-mortem on the Saturn experiment at GM.

Down here in the Tidewater area of Virginia for the Thanksgiving weekend, happened to catch the Neal Boortz radio program. Boortz, of Atlanta, is a libertarian known for his advocacy of the flat tax.

Boortz’s guest host today is Herman Cain, who warrants attention for his highly successful manufacturing career at Pillsbury and later his running of Godfather’s Pizza.

Cain’s topic for the day: The death tax! He’s informing his audience, repeatedly, in passionate terms, that the estate tax drops to 0 percent in 2010 and then returns to its earlier 55 percent rate in 2011.

From 0 to 55 percent: Not to be macabre or anything, but that’s certainly a motivation to get your dying over before January 1, 2011.

Cain provided testimony to the Senate Finance Committee in 2007 on the death tax, relating the story of his father’s climb through hard work to prosperity:

By the time of my mother’s death in 2005, my father’s assets had grown modestly leaving his family with a death tax liability of $1.3 million. My father would have been proud to have known that his hard earnings had been well-managed and used to propel his family to ever greater heights. Somehow, I do not think he would be nearly as pleased to learn that nearly half of it never made it into the hands of his grandchildren.

Yet my father is only one example of thousands. Most Americans who have earned over a million dollars in their life time have done it through hard work and rigorous discipline. It is easy for members of congress to talk about wealth disparity and to gloat about their grand schemes to ensure “fairness.” It is another matter when they confront the individuals whose “wealth disparity” they are actually seizing. Somehow, I get the impression that my father’s story – and the thousands like it – does not fit their expected redistributionist model.

Although the death tax’s fundamental unfairness and its effect discouraging investment are major issues for many small-business owners, including hundreds of smaller manufacturers who belong to the NAM, the issue never really made a mark in the 2008 presidential campaigns.

But unless Congress acts soon to change the law, the death tax could be a defining issue in the 2010 congressional elections. As it should be.

So, yes, surprised that Cain was talking about the issue, but gratified, too. In a time of economic difficulty, there’s a looming increase in an important tax rate, the death tax — from 0 to 55 percent. It SHOULD be talked about.

A worthy point of discussion, good starting point, let’s talk…

From Bloomberg, “Rangel Plans Push to Cut Top Corporate Tax Rate to 28 Percent“:

Nov. 15 (Bloomberg) — New York Representative Charles Rangel said he’s revising his tax overhaul proposal to reduce U.S. corporate tax rates to 28 percent, down from the current rate of 35 percent.

Rangel, in an interview with Bloomberg Television’s “Money and Politics,” said he’s changing the “mother of all tax reform” he unveiled in September 2007 to accommodate President- elect Barack Obama’s agenda. That earlier plan would have set the corporate tax rate at 30.5 percent. Rangel is the chairman of the House Ways and Means Committee, which oversees tax policy.

The U.S. corporate tax rate, second highest among developed countries, remains a major competitive disadvantage for manufacturers operating in the United States, as documented in the new “cost study” released on Thursday.

(Hat tip: Glenn Reynolds, Instapundit.)

Since below there’s a lengthy post surveying the debate over financial rescues and the auto industry, it’s probably worth noting again NAM statements on the issue.

NAM President John Engler on November 7 issued a statement, “NAM President stresses importance of stable auto industry in economic recovery”

The NAM’s Engler also touched on the auto industry and financing at a conference sponsored Monday by the New America Foundation. His remarks are here.

The AP covered the news conference this morning at the NAM on the new cost study, and the story gets right to the point. From “Global gap on costs narrows for US manufacturers“:

WASHINGTON (AP) — Costs that hamper the competitiveness of U.S. manufacturers have fallen in recent years compared with those of foreign producers, but high corporate taxes and other expenses still put domestic products at a distinct disadvantage in global markets, an industry group said Thursday.

The National Association of Manufacturers reported that structural costs, which include expenses such as health care, taxes and expenditures on environmental issues, have fallen since 2003 relative to the United States’ nine largest trading partners.

U.S. manufacturers now face a 17.6 percent disadvantage because of the structural costs, down from 22.4 percent in 2003, and 31.7 percent in 2006, according to the study comparing the U.S. with Canada, Japan, Germany, Korea and the United Kingdom.

NAM news release on the study is available here.

And the full 2008 cost study, “The Tide Is Turning: An Update on Structural Cost Pressures Facing U.S. Manufacturers,” is available at: www.nam.org/coststudy.

UPDATE Reuters, “High US corporate tax hurting manufacturer competiveness.”

NAM President and CEO John Engler spoke Monday at a conference sponsored by the New America Foundation, “Roads to Recovery,” organized in anticipation of next week’s stimulating, lameduck session of Congress.

The text of NAM President Engler’s remarks as delivered (lightly edited) is available here. He addresses the current state of the manufacturing economy, the value of a stimulus package, aid to domestic automakers, and the critical importance of infrastructure to U.S. competitiveness.

The Foundation has posted a report on the conference, including audio of the day’s speakers, here.

Michael Lind, a Foundation fellow who oversees its American Infrastructure Initiative, with an emphasis on infrastructure financing, will be a guest this week on the NAM’s radio program, “America’s Business with Mike Hambrick.”

A news conference coming up later this morning at NAM-HQ with the release of the third “cost study” — an occasional report on the competitive disadvantages imposed by bad policies here in the United States.

Marketplace Morning, the radio program, previewed the report this a.m., “Gap narrows for manufacturing costs“

Scott Jagow: It still costs more to make things in the U.S. than overseas. But a study out today says the gap is narrowing. Marketplace’s Jeff Tyler has more.

Jeff Tyler: The National Association of Manufacturers studied the cost of doing business in the U.S. compared to nine other countries. It shows that the U.S. manufacturing sector has kept a lid on employee benefits and health care costs more successfully than foreign competitors.

Emily DeRocco is president of The Manufacturing Institute, one of the reports sponsors. She says other costs continue to put U.S. manufacturers at a disadvantage.

Emily DeRocco: We are paying the second-highest corporate tax rate in the world.

That would be about 39 percent.

DeRocco: This corporate tax rate drives U.S. costs up, and limits our ability to be competitive with our products across the global marketplace.

DeRocco says the corporate tax rate in U.K. is 30 percent. And in China, it’s 25 percent.

I’m Jeff Tyler for Marketplace.

The 2006 report found that the “structural costs” — energy costs, pollution abatement regs, benefits, tort costs and corporate taxes — imposed a 31.7 percent disadvantage compared to our nine major trading partners/competitors. The latest report has the differential at 17.6 percent.

Here’s a point: There are a million different studies that come out in Washington, some credible, some not so. The fact that the numbers don’t tell a complete story of gloom and doom, that there’s some good with the bad, should tell the reader that this report is well-founded, objective report.

But at least we can afford a soda in Maine.

Two ballot measures the business community was paying attention to.

MAINE….

Voters have approved a repeal of the recently passed beer, wine and soda taxes, according to preliminary results.

The Bangor Daily News is reporting that 64 percent of voters have approved the repeal, while 36 percent voted to uphold the tax.

“We said back in April that if Maine people had a chance to have a voice on these taxes they would reject them,” said Newell Augur, chairman of the group Fed Up with Taxes which backed the people’s veto. “It appears as though Maine people rejected these taxes by a 2 to 1 margin. It’s a testament that families and businesses are making difficult choices every day. They hope and expect that their government will be doing the same.”

CALIFORNIA…

The Tax Foundation and CompeteUSA have announced the winners of their video competition designed to inform people about the high U.S. business tax rate and how those taxes harm our competitiveness, wages, and living standards. And the winner is Andrew Patterson of Edmond, Oklahoma:

In “Tax Attack,” Patterson highlights that businesses make everyday decisions based on corporate tax systems and that our high business taxes are making American corporations look internationally for their offices, banking, labor and operations. Patterson, who lives in Edmond, Oklahoma, is a business owner himself, providing film and postproduction services to companies including retailers, business firms, nonprofit organizations and natural gas companies. 

Congrats! A timely competition, indeed.

(Hat tip: John J. Miller)

From WSJ’s Real Time Economics blog, “Don’t Expect Too Many Jobs From Tax Proposals,” an informative piece by Martin Vaughn on the campaigns’ tax positions:

[Business] groups and some economists say the most important change that could promote job creation is a permanent tax rate cut.

“Overall, you need a tax code that encourages investment by U.S. companies, and that’s going to lead to job creation,” said Dorothy Coleman, vice president for tax policy at the National Association of Manufacturers.

Some recent academic studies indicate that the burden of high taxes falls at least as heavily on workers as it does on shareholders.

“It’s increasingly apparent that the benefit of a lower corporate tax rate is higher wages for workers,” said AEI’s Brill.

McCain wants to cut the corporate tax rate to 25% from its current level of 35%. This tax cut may be partially offset with revenue raisers such as withdrawing benefits from the oil and gas industry, but it would not be fully offset, Holtz-Eakin said.

Obama would also consider lowering the corporate tax rate, if it could be paid for by closing existing loopholes. That revenue-neutral corporate tax reform model is unpopular with business groups and is consistent with a recent plan put forward by House Ways and Means Chairman Charles Rangel (D., N.Y.).

Speaking of AEI, the Washington Post today publishes an op-ed by Brill and his AEI colleagues, “The Real Problem with Obama’s Tax Plan.”

If rewards for America’s entrepreneurs and firms are reduced through higher marginal tax rates, their incentives to earn, invest and create jobs will be diminished. Americans will have less incentive to save, and firms will have less incentive to pay dividends. Tax avoidance will become more profitable. A smaller capital stock will mean a less productive economy and lower wages for middle-class and other workers. These disincentive effects also mean that the revenue gain is likely to be smaller than Obama envisions.