Remember when Donald Trump promised to keep companies from shipping American jobs overseas? That promise may need to be re-visited, as the Republican tax law encourages companies to avoid American taxes and export American jobs.
The Trump-Republican Tax Law: More Incentives to Outsource Jobs. The tax-cut plan effectively halves corporations’ tax rate on offshore profits. It also essentially eliminates their taxes on profits, new factories, and equipment overseas, thus encouraging them to invest in jobs outside the U.S.
How to Keep American Jobs in America. Two Democratic legislators—U.S. Rep. Lloyd Doggett of Texas and Sen. Sheldon Whitehouse of Rhode Island—have introduced the “No Tax Breaks for Outsourcing Act” to counter what Trump and the Republicans have done. This bill will save American jobs by:
- Getting rid of the two different tax rates—21 percent rate on domestic profits and 10.5 percent on offshore profits—which encourage companies to move plants and jobs overseas, and instead setting the same rates for both.
- Repealing the 10% tax exemption on profits earned from offshore investments.
- Cracking down on corporation “inversions,” where companies move their headquarters to lower-tax countries to avoid paying taxes at U.S. rates.
Why Tax Fairness Matters. With these commonsense principles, American workers, small businesses, and patriotic corporations will be able to compete with U.S.-based multinationals on a more even playing field.