Bringing manufacturing back to the US alone isn't enough. You talk about encouraging innovation, but in order to get those innovations, you have to actually have a country that is excelling in STEM programs, which we most assuredly are not. STEM is pretty much where the future is whether or not we like it - other countries have already figured that out, which is why at the rate we're going, America is going to sputter and fail miserably in terms of competitiveness on that level. Bringing factory jobs back alone isn't enough - we can't even compete with China in terms of wages and cost of production because American workers are more expensive. What we're making in that factory counts, too - are we making some other country's new iPhone or are we making our own country's next greatest thing?
So building a tax system that encourages the return to the US won't work? I mean some of the reasons that business flees overseas is its' cheaper. Take away the tax burden and offer a reason to build in the US and you'll find that worker cost might not be as big an element. Depending on the industry involved there are a variety of practices that can counter the higher worker cost.
Tight delivery radius, stringent quality assurance control standards and automation all help.
It's not a cure all to all forms of industry returning to the US, granted, but it shows that we can ENCOURAGE business to return rather than reward them for outsourcing.
Of course all those expensive lobbyists, and massive tax divisions would be unneeded.
Instead of rewarding companies like GE to downsize in the US and outsource their funds to overseas tax havens, wouldn't it be better to encourage them to bring the money back to the US and invest in the country again? We can get corporate taxes paid instead of slithering away, we have a methodology of encouraging corporate activities.
It doesn't have to be manufacturing, but other outsourced jobs could be cost effective if there is a tax reform put forth.
We need to look into methods of encouraging business. Sitting around with a 35% corporate tax rate that is a joke to the multinationals because they hide their money overseas and have incentives to move overseas. It would do us all much better good to find reasons to reform the tax code than to let the current practice of hiding the cash in overseas banks.
It doesnt' have to be as blatant as some of the payback issues that are done overseas but we need to find ways to encourage development over here. Reforming the Tax code and eliminating some of the loopholes that encourage this behavior.