Imagine Legislation That
Improves the Balance of Trade
 

NESARA will immediately reduce approximately one sixth of the on-book national debt and will immediately reduce some private debt as well, although how much is unknown. This sudden influx of cash and newly available credit from private debt reduction will provide a tremendous increase in disposable income and undoubtedly will create competition among manufacturers and retailers for that disposable income.

NESARA eliminates the corporate income tax which will lower domestic production costs. American manufacturers will be able to reduce prices, thus making American products more competitive, both domestically and abroad. Furthermore, eliminating the hidden, embedded costs of the income tax will have a compounding effect because those costs are no longer passed down the line from manufacturer to manufacturer to wholesaler to retailer to consumer. Some estimates by experts state that the hidden, embedded costs of income taxes raise prices by about 30%.

NESARA replaces the income tax with a national sales and use tax, and that sales tax will affect both American exports and foreign imports. However, removing the hidden, embedded effects of income taxes, improves the American economic system’s efficiency. A mere 2.5% increase in the efficiency of the American economic system will create a minimum offsetting 2.5% price advantage in American exports. Like the compounding effect of the hidden, embedded costs of income taxes, the improved efficiency will compound itself throughout the system. This improved efficiency will mean lower prices for domestic production. Because imports will be subject to the same new sales tax as domestic products and domestic production costs are lower, domestic products become more competitive against foreign products. That is good for the consumer, and good for American competition against foreign products.

Exports will not be subject to the new sales tax because those sales take place outside the country. Because efficiency is improved in domestic production, reducing the price of exports should increase volume. How much is uncertain as there are too many variables, but an increased volume of export sales brings more profits home.

Manufacturers who previously moved businesses out of the country because of oppressive income tax laws probably will consider returning those businesses home, moves which will create new jobs. Although taxable retail products, both foreign and domestic, will be subject to price increases due to the new sales tax, foreign products will become proportionately more expensive because of improved domestic production efficiency, thus making American products more attractive to consumers.

More information about, and a copy of the bill, are located on this web site.