Some Democrats have called for large punishments on companies that choose to outsource jobs.
The Senate Minority Leader Chuck Schumer of New York stated their plan to crackdown on outsourcing last Wednesday with other lawmakers including Sen. Debbie Stabenow of Michigan and Se. Joe Donnelly of Indiana.
The program that the three are proposing would establish an American Jobs Security Council, which would effectively review purchases of American companies from foreign corporations to ensure the effect on the American economy would not be too harsh.
Schumer stated that “Simply put, this council has the power to slam the door shut on foreign companies who want to buy up American businesses and harm out workers.”
Documents on the new plan were quoted stating “This plan would level the playing field for American workers by ensuring our workers aren’t competing in a race to the bottom on wages and labor protections.”
The proposal by the Dems’ states that they may penalize businesses for moving jobs or corporate headquarters outside of the US by having them pay a corporate tax rate of 35% on profits they have overseas prior to relocating. In the current stipulations, the business would be able to defer paying those taxes until the money is brought back to the country.
In other terms, the companies would be rewarded with a tax credit of up to 20% for the costs of moving their business and jobs back into the country from foreign nations. This may help to stimulate the desire to open new locations and headquarters back in the U.S.
The document also stated that “U.S. companies need incentives to in-source production that has already been lost and be forced to pay and exit tax when outsourcing.”
Another part of the plan states that their should be a public “shame list” for companies that regularly choose to move jobs and business out of the country in addition to a requirement that would make outsourcing 10% more expensive. This is in the hopes that costs would then be similar between outsourcing and in-sourcing.