Hollings, (fmr.) Sen. Fritz, “Turned Off,” HuffingtonPost.com, 05/13/10

“President Obama has no experience in trade and takes the advice of Larry Summers, Tim Geithner, and the financial crowd. Summers and the financial crowd feel that as long as Corporate America’s profits keep flowing from China with the Wall Street market up, the U. S. has a strong economy. All needs to be done is to stimulate the financial community and consumption for the economy to recover. With imports soaring, we’re stimulating the production of China, not the United States. The Obama administration refuses to enforce our trade laws to protect the economy and change our tax laws to promote exports.
Corporate America, producing in China, has a 17% VAT rebated at export and pays no tax on its imports to the U. S.; whereby Corporate America, producing in the United States, pays on an average of 27% corporate tax plus a 17% VAT when its export reaches Hong Kong, for a total of 44%. This 44% is a substantial incentive for Corporate America to off-shore its production to China. Eliminating the corporate tax and replacing it with a 2% VAT would not only remove this incentive, but promote exports and raise more revenues. This should be done now.”