America


US companies that have outsourced jobs overseas could bring them back

by Ray Clancy on July 21, 2014

More jobs could be available for expats in the United States if a Senate bill that would provide tax incentives for businesses to bring offshore jobs back to the country is approved.

It could help bring 3,000 jobs back to New York alone, according to Senator Charles Schumer, who explained that since 2008 some 22 companies in central New York sent 1,609 jobs overseas because of tax.

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The potential changes are part of the Bring Jobs Home Act

The bill would end tax deductions for companies that move jobs overseas and provide a 20% tax credit for those companies that bring jobs back to the United States.

‘Currently, our tax policy makes it easier to ship jobs overseas than bring jobs back to the United States. We should be doing everything in our power to encourage job growth at home and discourage companies from shipping good paying jobs abroad,’ Schumer said.

‘Unfortunately, our current tax code includes incentives that make outsourcing a much more attractive option for companies than it should be,’ he added.

The tax changes are included in the Bring Jobs Home Act, a bill written by Senator John Walsh and co-sponsored by Schumer. The Senate is due to vote on the legislation this week. However, a similar bill failed to pass in a previous Congress vote.

The legislation would allow companies to deduct a 20% tax credit against their corporate income tax for costs associated with moving to the United States a production line, trade or business located overseas.

Only those companies that increase their full time US employment from the prior year would be eligible for the tax credit. At the same time, the Senate bill would eliminate the tax deduction companies take for business expenses associated with outsourcing.

Senator Debbie Stabenow first introduced this bill in 2012 and this time she is hopeful it will win strong bipartisan support. ‘We have a tax code that basically allows a company to write off all their costs related to packing up and moving overseas, which means the workers are paying the costs, the community is paying for the move,’ she explained.

Currently, the cost of moving personnel or operations is considered a business expense that qualifies for a tax deduction, but the bill will end that practice if it becomes law.

‘Truly, when you think about it, other counties look at us and they wonder what we are doing. And if you have a company closing up and you have workers having to retrain people that are going to take their jobs, which happens too frequently, and on top of that they have to pay for the move because of the tax code? That’s really outrageous,’ added Stabenow.

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