I also worry about how you will define manufacturing. If "assembling raw materials into finished goods, involving substantial processing and/or transformation of the components" is manufacturing, then every McDonald's franchise in the country is a manufacturer.
Why worry? Make the definition as broad as possible. After all, corporations don't pay taxes, they collect taxes. Everything is ultimately passed on to consumers. If McDonald's didn't pay corporate taxes, my Big Mac would be cheaper; in essence my taxes would be lower.
How is government picking winners and losers among different sectors of the economy, like you propose to do with tax policy for manufacturers, different from Obama picking winners and losers in the auto industry, or picking renewable energy as a sector in the economy that needs special government treatment?
I look at it this way. Manufacturers face an incredible number of obstacles to set up in the US (EPA and OSHA come to mind). The service industry faces nowhere near as much scrutiny. For a manufacturer it's often more cost effective to design and warehouse in the US and manufacture overseas. That's the equation that I think Santorum is trying to affect. I think saying, "we'll help you if you choose to build something (anything)" is far different than "build a Chevy Volt."
Re: Unleashing American Innovation and Ingenuity through Energy and Manufacturing
John Murdoch:
I also worry about how you will define manufacturing. If "assembling raw materials into finished goods, involving substantial processing and/or transformation of the components" is manufacturing, then every McDonald's franchise in the country is a manufacturer.
Why worry? Make the definition as broad as possible. After all, corporations don't pay taxes, they collect taxes. Everything is ultimately passed on to consumers. If McDonald's didn't pay corporate taxes, my Big Mac would be cheaper; in essence my taxes would be lower.