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Thread: Credits for Outsourcing Jobs

  1. #1
    Senior Member Gerry Clinchy's Avatar
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    Default Credits for Outsourcing Jobs

    WASHINGTON, D.C. – The Senate has rejected further consideration of a bill Democrats say would have eliminated existing tax breaks for employers who ship their jobs overseas. While Republicans sought to squash it as political theater, Democrats admit quarreling over the “Bring Jobs Home Act” was openly influenced by the 2012 presidential campaign.

    “It’s fairly easy to see why Republicans are blocking our bill to stop outsourcing,” Senate Majority Leader Harry Reid, D-Nev., said at a press conference before the vote. “They’re obviously defending their presidential nominee, who of course made a fortune by shipping jobs overseas.”

    Reid was referring to Mitt Romney’s past involvement with Bain Capital, the private investment firm Democrats say bought companies, laid off many of their American workers, and outsourced their jobs. Democrats have made Romney’s history with Bain a central talking point on the trail.

    Senator Richard Durbin, D-Ill., followed Reid, saying that today’s vote was about turning the Republican position on outsourcing into “a matter of record.”

    “So the dance ends, the music ends and the votes are counted,” he said. “And we can find out whether or not the Republican senators support the Bain Capital investment strategy of exporting jobs overseas.”
    Get more pure politics at ABC News.com/Politics and a lighter take on the news at OTUSNews.com

    Under existing law, employers may take tax deductions for the costs associated with moving jobs out of the country. The proposed legislation would have eliminated that, and used the resulting new revenue to fund a 20 percent tax credit for the costs companies run up “insourcing” labor back into the U.S.
    The bill failed by a 56-42. A count of 60 was required to end discussion and move to a final vote.

    To further push the issue, Democrats held a conference call with employees from Sensata Technologies, an electronics hardware manufacturer that plans to close its Freeport, Ill., plant at the end of the year and move those operations to China. Democrats say 150 people will be laid off in the process. Sensata, formerly known as the Sensors and Controls division of Texas Instruments, was spun off to Bain in 2006 for a reported $3 billion.

    The call was held after the vote.

    “There is no reason in the world this would not have passed except for so many of the Republican senators have other interests,” said Tom Gaulrupp, a 33-year veteran of the company.
    Gaulrupp says there was never a year the company did not draw a profit. Another employee, Lin Feller, was more frank:

    “They do not care about us. The average guy on the street, they just do not care about us.”
    On the House floor this morning the ranking Republican member of the Senate finance committee called the bill “a joke,” suggesting President Obama’s campaign staff were its true authors.

    “It’s devoid of serious content because it is of political rather than economic priorities,” Orrin Hatch, R-Utah, said.

    Speaking on the House floor, Hatch said it was “misleading” for Democrats to say there is a tax break for outsourcing. Holding up a large book, Hatch said the Democrats were trying to invent controversy.
    “I’ll keep this book of tax codes at my desk here. If someone wants to show me the tax code that allows deductions for shipping jobs overseas. I’d like to see it. But it’s not in here.”

    Congressional analysts at the Joint Committee on Taxation say $14 million could be raised next year from removing outsourcing credits, compared to a cost of $21 million for bringing those jobs back. Hatch points out the relatively low sum has already been passed in Obama campaign ads on the issue.
    Three Republicans voted in favor of the bill: Senators Susan Collins, Olympia Snowe, and Scott Brown.
    This was reported 7/19/12 ... so Obama was right on this one. There is a credit for the costs of moving jobs overseas ... maybe ... Note the blue text.

    However, it's kind of murky that even with 3 Rs voting in favor of removing the credit, the bill could not pass the Senate ... so some Dems voted against it as well. Go figure.
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  2. #2
    Senior Member menmon's Avatar
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    Quote Originally Posted by Gerry Clinchy View Post
    This was reported 7/19/12 ... so Obama was right on this one. There is a credit for the costs of moving jobs overseas ... maybe ... Note the blue text.

    However, it's kind of murky that even with 3 Rs voting in favor of removing the credit, the bill could not pass the Senate ... so some Dems voted against it as well. Go figure.
    There is a tax credit for moving a business down the street. So yes there are tax credits for moving a business overseas. So you change the code to exclude the any moves overseas. Typically the place that is recieving the company gives credits too.

    Point being nothing discouraging it, and in essence we are paying them to move.

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    Senior Member Buzz's Avatar
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    Correct. There is not credit specifically for shipping jobs over seas. However, I have had a hand in moving manufacturing plants to Mexico and China. You CAN write off the expenses incurred in making the move. Ol Mitt really played dumb on that one, he knows of NO credit you can take for moving a company, but I'm positive he knows that you can write off the costs of the move. I would like to look up the vote record on that bill. Remember that to pass ANYTHING in the senate requires 60 votes anymore. Pure BS.

    Shipping jobs overseas is not a Republican or Democrat thing. Both are culpable. I remember sitting in a conference room in Guadalajara watching a hundred or so workers with picks and shovels digging the foundation trenches for the new factory. I asked why they don't get equipment in there to do it and the managers laughed. They said that if you brought equipment you would have a riot on your hands over anger at them taking jobs away. And besides, the labor was cheap. They told me that our politicians are either liars or they are stupid for making the argument that the Mexican people would eventually earn more and become our customers. They believed that the amount of cheap labor in this world is for all intents and purposes infinite and that 3rd world wages will never increase because as soon as they do in one place, they will move manufacturing to another.
    Last edited by Buzz; 10-04-2012 at 03:21 PM.
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  4. #4
    Senior Member Gerry Clinchy's Avatar
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    Obama's Employer Tax Break for Jobs does not require employers to hire U.S. workers

    Submitted by Robert Oak on Fri, 01/29/2010 - 17:22
    u must be smokin' crack. Keep smokin' it, for hallucinating is the only way you'll see labor demand curves slope upward.

    The Obama administration released details on their tax cut for businesses which hire and increase wages.
    Get what is missing? Tying the tax cut to U.S. citizens, LPR. This means there are no restrictions on offshore outsourcing of jobs or displacing more Americans using guest worker Visas, a notorious practice using H-1B, L-1 and H-2B Visas.

    There is no mention of ensuring that employee exists on U.S. soil or is a U.S. citizen, green card holder. There is no mention of stopping the use of the tax cuts when importing more foreign guest workers. Currently we literally have story after story of employers importing even more foreign guest workers with this kind of dire jobs situation. Just the other day a grocery, literally imported foreign guest workers on H-2B Visas for jobs while the town has people going homeless and an official 14% unemployment rate.

    When, when, WHEN will people get economic reality that the United States cannot be the world's job market. No, we really can't and if 1 in 6 Americans cannot get a decent job doesn't tell ya that fact, yo

    So, the Dems are not totally without guilt on the topic of outsourcing.
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    Senior Member Gerry Clinchy's Avatar
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    Found a fact-checker that clarified ... businesses get tax credits for all expenses associated with doing business; moving a business is one of those costs. This is not specific only to moving overseas, nor does it preclude expenses related to moving jobs overseas.

    Thus, Romney was correct ... and the Dem talking point is to make it sound like there is some special incentive there. So, the proposed bill that failed (mentioned earlier) was to remove that loophole. The Joint Committee on Taxation said doing so would create $168,000 in revenue over 10 years. So, whether that loophole is a significant incentive to businesses sending jobs overseas, or not, is debatable. But I would vote for getting rid of the loophole. We'd save a lot more money by not sending $450,000 to Egypt right now (that's a lot more $ over a decade).
    Last edited by Gerry Clinchy; 10-04-2012 at 07:24 PM.
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  6. #6

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    Quote Originally Posted by Buzz View Post
    Correct. There is not credit specifically for shipping jobs over seas. However, I have had a hand in moving manufacturing plants to Mexico and China. You CAN write off the expenses incurred in making the move. Ol Mitt really played dumb on that one, he knows of NO credit you can take for moving a company, but I'm positive he knows that you can write off the costs of the move. I would like to look up the vote record on that bill. Remember that to pass ANYTHING in the senate requires 60 votes anymore. Pure BS.

    Shipping jobs overseas is not a Republican or Democrat thing. Both are culpable. I remember sitting in a conference room in Guadalajara watching a hundred or so workers with picks and shovels digging the foundation trenches for the new factory. I asked why they don't get equipment in there to do it and the managers laughed. They said that if you brought equipment you would have a riot on your hands over anger at them taking jobs away. And besides, the labor was cheap. They told me that our politicians are either liars or they are stupid for making the argument that the Mexican people would eventually earn more and become our customers. They believed that the amount of cheap labor in this world is for all intents and purposes infinite and that 3rd world wages will never increase because as soon as they do in one place, they will move manufacturing to another.
    Distinct difference between tax credit and recognition of expenses
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    Senior Member Buzz's Avatar
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    Quote Originally Posted by Gerry Clinchy View Post
    Found a fact-checker that clarified ... businesses get tax credits for all expenses associated with doing business; moving a business is one of those costs. This is not specific only to moving overseas, nor does it preclude expenses related to moving jobs overseas.

    Thus, Romney was correct ... and the Dem talking point is to make it sound like there is some special incentive there. So, the proposed bill that failed (mentioned earlier) was to remove that loophole. The Joint Committee on Taxation said doing so would create $168,000 in revenue over 10 years. So, whether that loophole is a significant incentive to businesses sending jobs overseas, or not, is debatable. But I would vote for getting rid of the loophole. We'd save a lot more money by not sending $450,000 to Egypt right now (that's a lot more $ over a decade).
    I'm not sure I can believe that number. And don't forget, corporations are sitting on $6 trillion in cash right now, $3 trillion of that is profits being held offshore untaxed.
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  8. #8
    Senior Member Buzz's Avatar
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    Quote Originally Posted by Gerry Clinchy View Post
    Found a fact-checker that clarified ... businesses get tax credits for all expenses associated with doing business; moving a business is one of those costs. This is not specific only to moving overseas, nor does it preclude expenses related to moving jobs overseas.

    Thus, Romney was correct ... and the Dem talking point is to make it sound like there is some special incentive there. So, the proposed bill that failed (mentioned earlier) was to remove that loophole. The Joint Committee on Taxation said doing so would create $168,000 in revenue over 10 years. So, whether that loophole is a significant incentive to businesses sending jobs overseas, or not, is debatable. But I would vote for getting rid of the loophole. We'd save a lot more money by not sending $450,000 to Egypt right now (that's a lot more $ over a decade).
    I'm not sure I can believe that number. And don't forget, corporations are sitting on $6 trillion in cash right now, $3 trillion of that is profits being held offshore untaxed. No, there is no specific break for moving offshore, but we are dumb to have a tax code helps MBA's and accountants justify making the move.


    Quote Originally Posted by Jeff Huntington View Post
    Distinct difference between tax credit and recognition of expenses
    Yes, I was pretty loose with the terminology in my post. Obama and Romney were referring to tax breaks which could encompass write-offs and credits.
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    Quote Originally Posted by Buzz View Post
    Correct. There is not credit specifically for shipping jobs over seas. However, I have had a hand in moving manufacturing plants to Mexico and China. You CAN write off the expenses incurred in making the move. Ol Mitt really played dumb on that one, he knows of NO credit you can take for moving a company, but I'm positive he knows that you can write off the costs of the move. I would like to look up the vote record on that bill. Remember that to pass ANYTHING in the senate requires 60 votes anymore. Pure BS.

    Shipping jobs overseas is not a Republican or Democrat thing. Both are culpable. I remember sitting in a conference room in Guadalajara watching a hundred or so workers with picks and shovels digging the foundation trenches for the new factory. I asked why they don't get equipment in there to do it and the managers laughed. They said that if you brought equipment you would have a riot on your hands over anger at them taking jobs away. And besides, the labor was cheap. They told me that our politicians are either liars or they are stupid for making the argument that the Mexican people would eventually earn more and become our customers. They believed that the amount of cheap labor in this world is for all intents and purposes infinite and that 3rd world wages will never increase because as soon as they do in one place, they will move manufacturing to another.
    Real simple question, needing no graphs, only a personal opinion. So do you believe that those who need jobs and are willing to work at them cheaper, should be excluded from the labor force and allowed to starve? They should be descriminated against because they will work at a cheaper rate than someone else?? Just aking and wonder if I will get a reply.

  10. #10

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    Great so another thing Obama has not fixed in 4 years. If he knows of such things that are so important why doesn't he fix it.Answer, because he is not a fixer.

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