I find the comparison between those that off-shored manufacturing from the US and those that leave their home countries to avoid taxes awfully compelling.

Actually, it’s not the motivations behind their actions I find so interesting; it’s the contradictory responses of government & politicians toward both tactics that I find ironic.

Now, I know that unpredictable behavior by governments & politicians aren’t news. But what I’m seeing, I believe, speaks volumes about control, intentions, and who was responsible for moving our production & innovation bases to low cost countries in the first place.

In case you’re unaware, 2012 saw some dramatic increases in citizens expatriating from their home countries to those with lower personal tax rates. For example, this past Spring facebook co-founder Eduardo Saverin renounced his US citizenship & moved to Singapore. At the time, two US senators accused him – quite vocally – of dodging taxes on profits made from the facebook IPO.

As 2012 progressed, the number of Americans renouncing their citizenship has exploded over previous years according to various sources.

But rest easy, fellow patriots. Our government and representatives are on it. As a matter of fact, they’re on it like Alex Karras on a buffet at Ponderosa.

In economics, the Laffer curve is a representation of the relationship between possible rates of taxation and the resulting levels of government revenue. It illustrates the concept of taxable income elasticity—i.e., taxable income will change in response to changes in the rate of taxation.

In economics, the Laffer curve is a representation of the relationship between possible rates of taxation and the resulting levels of government revenue.

Several proposed and enacted pieces of legislation are creating a perfect storm to put a stop to this understandable diabolical manifestation of the Laffer Curve.

And recently, the tax exodus debate has reemerged in California.

So, the fiscal peril of losing the wealthy to expatriation over tax rates is important? I get that. But where was at least the same level of response when these same politicians in Commerce & State, representatives in associations ‘representing US manufacturers,’ and our elected officials all greased the skids for manufacturing to be shipped offshore? Why didn’t they play the tape all the way through to the end, and see our tax roles reduced? Or our innovation engine decimated? Or the downstream impact on the overall economy? Where was the outrage? Where was action to prevent the pall mall off-shoring of whole industries & our middle class, at any level or immediacy approaching those we’re seeing now to prevent tax dodging?

I’ll tell you why we didn’t see it – it’s because ‘we’ saw the opportunity to build new markets and middle classes on a global level at the expense of our own. If the argument to protect our economy is good for one threat now, why wasn’t it appropriate for off-shoring in the first place? The answer is simple – because ‘we’ wanted it to happen.

What we’re losing to expatriation to dodge taxes is a drop in the bucket compared to what we’ve lost due to the expatriation of our manufacturing base. To see such contradictory responses to similar threats is perplexing, and it should have us all asking tough questions. It’s like letting a guy break into our house with a bazooka & letting him get away with it, then killing another that breaks in with a crowbar.

I’ve been told directly that it’s water under bridge, that leveling blame is a fool’s errand. That it doesn’t enable the reshoring trend to develop as quickly as it should. But to those I say it’s critical to understand history in order to manage our present and future.

I’ve also been told that this sounds a lot like a conspiracy theory. To them, I say that anyone who doesn’t believe in conspiracy theories has never read a history book.

Sure, it’s ironic that we’ve not seen consistency among these two matters. But it’s also pathetic. And it should insult your intelligence whenever someone suggests that the off-shoring of our manufacturing base was due ‘solely’ to markets or the invisible hand.