The No Tax Breaks for Outsourcing Act
The tax code has for years encouraged companies to move money and jobs overseas—and the Republican tax law that passed last Congress has made the problem even worse. Many of the companies that are among the biggest beneficiaries of the Republican tax bill, such as AT&T, GE and Wells Fargo, have already been closing American call centers and aggressively offshoring U.S. jobs. After shipping jobs overseas, these companies have been gifted billions of dollars in new tax breaks while being encouraged to offshore even more American jobs in the future.
The No Tax Breaks for Outsourcing Act (S. 780/H.R. 1711) would stop rewarding companies that ship jobs overseas and reverse the offshoring incentives embedded in the tax law. Our tax code should help working families, ensure that the super-wealthy and multinational corporations pay their fair share, and encourage the creation of good jobs here in the United States. The No Tax Breaks for Outsourcing Act would go a long way to accomplishing that goal and would reverse one of the worst effects of the Republican tax law.
- The Republican tax law creates massive new tax breaks for sending jobs overseas by allowing companies to deduct half of their overseas income from their tax bill.
- This means that while the tax rate for profits from American work is 21%, the tax rate for profits from outsourced work will be half that - only 10.5%.
- The new tax law also provides companies a bigger tax break for investing in growth outside of the U.S.:
- The tax law creates additional deductions that companies can take for their overseas profits, meaning that companies can get a bigger deduction for opening more facilities like call centers and factories or for investing in more equipment in their overseas operations.
The No Tax Breaks for Outsourcing Act would:
- Eliminate the tax incentive to move manufacturing and call centers overseas by ensuring that companies would not be able to slash their tax bills by moving those jobs out of the country.
- Enact a series of other changes that would block corporate efforts to dodge taxes, such as shifting funds to tax havens.