3. Oneida Ltd For years, Revere shipped copper coils about 20 miles to another manufacturing company named Oneida Ltd. Oneida cut and formed the copper Then plated silver on the form to produce...

4. …a silver bowl designed by Paul Revere

5. Thats as American as apple pie? Right?

6. WRONG… …ON TWO COUNTS!

7. The Paul Revere silver bowl Now made in China Today, Oneida buys the silver bowl, silver flatware and other products from China How can China produce that silver bowl over there and ship it over here and compete?

8. The American Apple Pie America now imports apples from China So you really cant say …as American as apple pie… How can apples from over there be refrigerated, shipped and still compete with apples grown just down the road?

9. Its the cheap labor, right?

10. WRONG First, lets first look at the benefits of producing that silver bowl in China vs. USA …as China manipulates its currency…

11. The Paul Revere Silver Bowl Assume production cost of 100 if made in China @ manipulated exchange rate of 7 to $1, the production cost in China is $14.28 @ free market exchange rate of 4 to $1, the production cost in China would be $25.00

12. Chinas currency was undervalued by an estimated 40% back in July 2005

13. Exchange rate valuation Based on the differences of trade balances and international economic growth, that 40% should have grown about 5% points more a year since July 2005

14. Recent Press Release: China has adjusted its currency by 15% since July 2005

15. BUT… Chinas exchange rate for its yuan should have been appreciating by 5% points more each year since July 05 or 12.5% So the adjustment by the government of China of 15% really nets to only 2.5% Yuan still overvalued about 40%

16. Currency manipulation works the same way for apples grown in China…

17. In other words, the government of China manipulates its currency to subsidize the cost of manufacturing and farming in China

18. Its not only currency Tax structure Health care Environmental Stewardship Government loans not repaid Piracy of intellectual property/ reverse engineering Other Subsidies

19. Currency manipulation on top of these subsidies can reduce costs as much as 80% when producing in China This happens without even considering the cost of labor

20. Thats how China competes…

21. … AND THAT S AS CHINESE AS APPLE PIE !

22. But it is more than China… The USA has a trade deficit with virtually every other major trading nation in virtually every class of goods… Because the USA became the worst place outside of the Middle East or Africa to locate a factory or a farm…

23. What made the USA the worst place to locate a factory or a farm? The USA is the only nation that has a tax system biased against domestic jobs The USA is the only nation that has a health system biased against domestic jobs

24. Wait A Minute!!! I just saw a report that the USA just leapfrogged to become the third cheapest country in which to do business due to the plunging dollar Mexico and Canada cheaper China excluded from survey

25. Do we want a weak dollar or a strong dollar? We want a naturally strong dollar - Trade balance is good - Makes imports cheaper - Foreign travel is less expensive - Sign of a strong economy

26. Artificially Strong Dollar Something is fundamentally out of balance Internal problems with competitiveness of USA production of goods & services External problems with manipulated currencies in Asia and other protectionist practices by foreign nations

27. So we can change what is fundamentally wrong or we can just let our economy and our currency and our future deteriorate

28. USA tax system is a tax on domestic jobs All income, payroll, savings, property, investment & inheritance taxes are taxes on jobs The products produced must carry these costs Unless, of course, the products are produced in another country As a result, production of farm, manufactured and service goods are moving to countries that support domestic jobs with taxes for jobs

29. Furthermore How can a US producer compete if it must carry the burden of the health care costs of its workers and its foreign competitor does not?

30. Reveres fabricating costs In 2007, about 10% of Reveres fabricating costs were for the health care of its people and their families If you buy a product made from Revere copper or brass, you are paying for the health care costs of our people If you are buying a foreign product, you are not paying for any US producers health care

31. What about Reveres exports? Of course, the cost includes the health care costs of Revere people The foreign countrys border adjustable tax imposed on Reveres exports helps pay for the national health care cost of that nation So, in order to compete, Revere people have to cover their own health care cost and those of the foreign workers they compete against!!! Thats just as true for farm products whether you are considering taxes or health care…

32. What makes a tax system biased for jobs? In order to answer this question, it is necessary to understand Border Adjustable Taxes All major foreign countries have them The USA does not

33. Border Adjusted Taxes Value Added Tax (VAT) is most common World average is 18% World Trade Organization (WTO) compliant Rate & application depends on country (making some compliant & some not so…)

34. Lets say a good produced in the USA costs $10 to produce and ship to a foreign border Then lets assume it costs another $10 to get to a consumer

35. Assume $10 to produce in the USA and ship to a foreign border Then another $10 to get to a consumer COUNTRY VAT RATE FRANCE @19.6% CHINA @17% VAT APPLIED @ BORDER 0$1.70 VAT APPLIED @ CONSUMER $1.96$1.70 TOTAL VAT CHARGED$1.96$3.40

36. A Fair Question Is the VAT Tax of China really a National Sales Tax?

37. Border Adjusted Taxes VAT (Value Added Tax) - also rebated for exports - usually does not tax full value ($10) - VAT wars

38. Border Adjusted Taxes VAT (Value Added Tax) - rebated for exports - usually does not tax full value ($10) - VAT wars National Sales Tax - not applied to exports - applies to full value of imports ($20) - WTO compliant and simple

39. Impact of a National Sales Tax on the supply chain for a US consumer A National Sales Tax will place a tax burden on the entire supply chain That means all foreign made components or products will be fully taxed Just as if they would be if produced in the USA Foreign made treated the same as US made

40. Border Adjusted Taxes VAT (Value Added Tax) - rebated for exports - usually does not tax full value ($10) - VAT wars National Sales Tax - not applied to exports - applies to full value of imports ($20) - WTO compliant & simple - regressive Fair Tax - a National Sales tax that replaces all Federal Taxes - not regressive (its fair)

41. Make it not regressive Prebate National Health Care - offsets regressive nature of sales tax - lifts burden off US production costs

42. So how do we compete? Need to offset currency manipulation Need a border adjustable tax Need a national health care system BUT REMEMBER, THIS IS A COMPETITION!!!

43. Look at Best Practices Nations need to behave like corporations and sports teams that continually look at the best practices of whomever they are competing against plus add a new wrinkle... (like a Fair Tax)

44. So we need to determine the best practices for our products to compete in a global environment…

45. Zero tolerance of currency manipulation Elimination of all taxes on jobs - income taxes (corporate & private) - payroll taxes - taxes on investment and savings Fair consumption tax (w/health care) Best Practices

46. Objection from Farmer Brown I dont like a sales tax that adds to the price that people have to pay for my goods! Farmer Brown, do you like a system that taxes your goods but not imported goods? No! Well, Farmer Brown, that is what you have now!!!

47. Taxes, Taxes, Taxes Tax his land, Tax his bed, Tax the table At which he's fed. Tax his tractor, Tax his mule, Teach him taxes Are the rule.

48. Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirt, Tax his work, Tax his dirt.

49. Tax his tobacco, Tax his drink, Tax him if he Tries to think. Tax his cigars, Tax his beers, If he cries, then Tax his tears.

50. Tax his car, Tax his gas, Find other ways To tax his ass Tax all he has Then let him know That you won't be done Till he has no dough.

51. When he screams and hollers, Then tax him some more, Tax him till He's good and sore. Then tax his coffin, Tax his grave, Tax the sod in Which he's laid.

52. Put these words upon his tomb, "Taxes drove me to my doom..." When he's gone, Do not relax, Its time to apply The inheritance tax.

53. Accounts Receivable Tax Building Permit Tax CDL license Tax Cigarette Tax Corporate Income Tax Dog License Tax Federal Income Tax Federal Unemployment Tax (FUTA) Fishing License Tax Food License Tax, Fuel permit tax

54. Gasoline Tax Hospital Assistance Tax Hunting License Tax Inheritance Tax Interest expense Inventory tax IRS Interest + Penalties(tax on top of tax) Liquor Tax Luxury Taxes Marriage License Tax Medicare Tax Property Tax

55. Real Estate Tax Service charge taxes Social Security Tax Road usage taxes Sales Tax Recreational Vehicle Tax School Tax State Income Tax State Unemployment Tax (SUTA) Telephone federal excise tax

56. Telephone federal universal service fee tax Telephone federal/state/local surcharge taxes Telephone minimum usage surcharge tax Telephone recurring/non-recurring charges tax Telephone state and local tax Telephone usage charge tax Utility Taxes Vehicle License Registration Tax Vehicle Sales Tax Watercraft registration Tax Well Permit Tax Workers Compensation Tax

57. This list does not include corporate taxes such as taxes on Income Payroll Health care or health care costs which act like a tax on producing goods and services in the USA

58. Virtually all taxes are a burden on domestic jobs in Agriculture, Manufacturing and Service industries

59. Only one is a tax on goods that are imported

60. That is the State Sales Tax which treats goods produced in foreign countries the same as goods produced in the USA

61. That means a sales tax is a tax for (domestic) jobs

62. So if we want to keep jobs here we must replace all Federal & many other State Taxes with a Fair Tax which will tax imports the same as goods produced in the USA

63. A Fair Tax for Fair Trade

64. Visit: Fairtax.org Research papers - impact on manufacturing & agriculture - fairness - numerous other questions

65. Best Practices Zero tolerance of currency manipulation Elimination of all taxes on jobs - income taxes (corporate & private) - all payroll taxes - all taxes on investment and savings Fair consumption tax (prebate) National health care plan financed by fair tax Rules (enforced) based trading

66. Worst Practices for Global Warming The world is working to make carbon emission worse The Kyoto Treaty and Regional/National Greenhouse Gas Initiatives exclude China They drive manufacturing to countries that have lower environmental standards Causing carbon emissions to increase

70. Chinas Pollution Flow Almost 25% of the particulate matter that falls on California originates from China and Southeast Asia.

71. Policy making The international trade & tax policies of the USA are destroying the best jobs in the USA The correct policies are not protectionist but balanced and recognize the degree to which trade is managed by every country in the world but the USA National & international environmental policy making is contributing to global warming due to its biased impact on international trade and the relocation of production capacity

72. We need to Change This will require an alliance of farm, factory, service and national security representatives

73. WWW.PROSPEROUSAMERICA.ORG

74. Wake up, America! Visit: reverecopper.com and learn more

75. Please carry the message… Thank You.