WASHINGTON – Today, Senator Ruben Gallego (D-AZ) announced his support of the No Tax Breaks for Outsourcing Act, legislation to close loopholes that reward corporations for outsourcing jobs and profits. The bill comes as Republicans push to expand these offshoring incentives in their upcoming reconciliation bill.
“Our tax system should support American workers, not encourage investment overseas,” said Senator Gallego. “If we really want to put America first, we need to stop giving corporations a tax break for outsourcing and level the playing field for companies that want to invest here at home.”
Under the 2017 Trump tax law, multinational corporations pay a special tax rate for offshore profits that is half the domestic rate, encouraging companies to invest overseas rather than in the U.S.
Since the law’s passage, studies have found that multinationals have increased their foreign investments while American workers are left behind. The No Tax Breaks for Outsourcing Act would level the playing field for American companies, encourage domestic investment, bring the U.S. into compliance with the global minimum tax agreement, and boost U.S. economic competitiveness.
The bill was introduced by Senator Sheldon Whitehouse (D-RI) and Representative Lloyd Doggett (D-TX).
The No Tax Breaks for Outsourcing Act would:
- Eliminate the offshore tax discount that allows corporations to pay half the U.S. tax rate on profits earned abroad
- Close a loophole that lets corporations avoid taxes on a 10 percent return on tangible investments made overseas, like plants and equipment
- Treat “foreign” corporations worth $50 million or more and managed and controlled within the U.S. as the American entities they in fact are, and subject them to the same tax as other U.S. taxpayers
- Crack down on inversions by tightening the definition of expatriated entity. This provision would discourage corporations from renouncing their U.S. citizenship and merging with smaller foreign firms to dodge American taxes
- Make it harder for multinational corporations to shift their debt onto U.S. subsidiaries to artificially reduce their tax bills
- Eliminate special tax breaks for foreign oil and gas profits