— MarrinerKeynes: Great question. I’m not surprised, I asked Charles Schumer, Senator from NY, about it once and he didn’t know either. See everyone loves Reagan, but it was Reagan who killed manufacturing in this country, by passing the Foreign Tax Credit. Basically what it says is that companies do not have to pay taxes in the US (or receive a credit as it were) on revenues earned overseas (or outside the US). So what US companies did was create shell companies overseas and perform all their manufacturing there, where the labor costs and labor rules are significantly cheaper. Also, companies are not required overseas to pay for healthcare. So these companies manufacturing goods in China, India etc, and the SELL the goods at a steep mark-up to their US Subsidiary. This way the majority of the income would be derived from foreign sources minimizing revenues and taxes here in the US. The only issue is the revenues cannot be re-patriated to the US unless they are willing to pay the 35% tax rate. However, about every 10 years Congress grants a Tax Holiday, one is being discussed now, which will allow them to re-patriate the revenues at a tax rate of about 5%. As long as the US allows companies credit for revenues earned overseas we will never get manufacturing back in the US. Should this credit be eliminated, the incentives to manufacture overseas decrease and the margins do not become significant enough to keep manufacturing their and manufacturing will return to the US.  Hope this answers your question.

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