Reed Seeks to Bring Jobs Back to America & Close Outsourcing Loophole
U.S. Senate takes initial step to advance bill to end tax breaks for outsourcing
WASHINGTON, DC – U.S. Senator Jack Reed (D-RI), one of the original cosponsors of the Bring Jobs Home Act (S. 2569), is urging the U.S. Senate to pass this legislation that will close a tax loophole for companies that move jobs overseas and cut taxes for companies that bring jobs back to America from another country. Today, the bill overcame its first procedural hurdle as the Senate voted 93-7 to begin debate.
“Saving taxpayers money and creating jobs here in America should be bipartisan priorities. Most folks agree that paying companies to relocate American jobs overseas makes no sense. Now, the Senate has a chance to close this loophole and open a new chapter of bipartisan, commonsense cooperation,” said Reed. “This kind of straight-forward legislation deserves a swift up or down vote. I hope we can get bipartisan cooperation to improve our economy and give American-based companies and workers a competitive advantage in the global marketplace.”
The Bring Jobs Home Act will close a tax loophole that pays the moving expense of companies which send jobs overseas. Under the current tax code, the cost of moving personnel and components of a company to a new location is defined as a business expense that qualifies for a tax deduction. The Reed-backed bill will keep this deduction in place for companies that bring jobs and business activity back to the United States, but businesses would no longer be able to claim a tax benefit for shipping jobs overseas. The bill also creates a new tax cut to provide an incentive for companies to bring jobs back to America. Specifically, it would allow companies to qualify for a tax credit equal to 20% of the cost associated with bringing jobs back to the United States.
“Instead of giving employers a financial incentive to shift hiring abroad, let’s give them a reason to bring these jobs back home,” said Reed. “We need to bring jobs and production back to the United States and passing this bill would be a smart step in the right direction. It would help support local jobs and make our country a more competitive, attractive place for some of these companies.”
According to U.S. Department of Commerce data, about 2.4 million U.S. manufacturing jobs have been sent overseas by big U.S. companies in the past decade.
In its statement of administration policy, the White House signaled its support for the legislation by noting: “Senate passage of this bill is consistent with the Administration's commitment to support economic growth, job creation, and business investment in the United States, and serves to discourage outsourcing in all sectors of the economy, but particularly in the nation’s manufacturing sector. Following a decade in which the United States lost over five million manufacturing jobs, the Nation has begun to make progress. Since February 2010, the U.S. manufacturing sector has added more than 650,000 new jobs, the fastest pace of manufacturing job growth since the mid-1990s. Instead of rewarding firms for shifting production and jobs overseas, the tax code should strengthen the domestic manufacturing sector, support job growth and innovation, and encourage companies from all sectors of the economy to invest in the United States.”
In 2012, the Bring Jobs Home Act garnered bipartisan support from a majority of Senators, including four Republicans, but was ultimately blocked by a Republican filibuster.
Although the Senate voted to open 30 hours of debate on the bill today, another procedural vote requiring a 60 vote threshold for overcoming a filibuster must take place in order for the Bring Jobs Home Act to get a final up or down vote.