@catchamber When I set prices I set them where I need them to be in order to meet my needs. If I need to clear inventory quickly, then the price goes below the market rate by a significant amount. If I just want to make a consistent profit than the price is below the market rate by the bare minimum necessary to make the sale.
(There is a problem in this country, and in many others, with people who have no expertise in a complex matter offering their opinion as if it is fact. This is especially noticeable in economics where many young people are certain they have the solution to the worlds economic problems despite the fact they can't even solve their own problems which are typically much smaller and simpler than the issues that plague the global economy. If someone goes fifty thousand dollars into debt for a graduates degree in dance therapy then their opinion on a household budget should be taken with several grains of salt, to say nothing of trillion dollar economies. I am not immune either; there are limits to my expertise so I don't want my statement here to be taken as a prescription to solve all national ills, just an observation of a principle.)
With the above in mind I would suggest that our government should do the same as I do. Choose the markets in which we wish to be competitive. Observe our competitors and set the tax rate for that market at a level which incentivizes corporations in said markets to move here. When we want to make a rapid change, for whatever reason, tax at a rate well below our competitors for that industry.
A few notes:
1. The current strategy seems to be "Compete in all markets all the time." In my experience this isn't possible.
2. Additionally we seem to be attempting to compete in all markets all the time with the exact same incentives for each market regardless of the individual particularities of that market. Of course the problem is that any attempt to individualize incentives for various markets will open the door to pork, graft and a multitude of special interest lobbying. Ultimately I feel we are too factionalized and too corrupt to pursue an optimal strategy here.
3. Taxes are not the only incentives. It isn't always necessary to tax at a lower rate than a competitor because we have other incentives to offer. Conversely merely lowering taxes will not always be sufficient because other nations may have incentives we do not. Many third world nations are attractive not because of their tax rate but because of their limited regulation, limited liability, lower costs and vastly lower wages. As such we should remember that we have a stick as well as a carrot.
