Sen. Charles Schumer of New York has announced a plan that he says could bring many jobs back to the U.S. from overseas. According to the Times Union, Schumer introduced a bill that would end tax breaks for companies that outsource their operations to other countries while supplying credits to those that create jobs in the U.S. instead.
More than 13,000 jobs were moved overseas from New York between 2008 and 2011, Schumer said in an announcement this week. The news source reported that the insurance and publishing industries in New York were hit hardest by the moves.
Tax breaks for outsourcing
Current laws allow U.S. businesses that outsource jobs to claim tax credits for a portion of the expenses involved in moving them, the Evening Tribune reported.
"They actually get a tax break when they move the jobs overseas," Schumer told reporters on a conference call. "We're handing tax dollars back to every company that outsources jobs. If you think about it, those newly unemployed American workers are footing the bill with their tax dollars to move their own jobs overseas. That's disgraceful."
Bringing jobs back
Schumer's plan calls for a modification to this law, allowing only companies that move employees within the U.S. to claim the credit. These organizations would also benefit from a new program offering additional credits. Companies could claim tax deductions worth 20 percent of the expenses of moving operations back to the country, provided that it resulted in a gain in their number of full-time employees in the U.S. Both of these goals depend on the passing of the senator's Bring Home the Jobs Act.
According to Schumer, his bill comes in response to New York companies which have outsourced employees saying that they would bring positions back to the U.S. if such a move were financially feasible. The state has relatively low energy costs and a highly skilled workforce, which makes it attractive to many businesses, especially in heavy manufacturing.
Data from Statistics Brain showed that 36 percent of chief financial officers said that their organizations were shifting jobs overseas, and a total of 2,637,239 positions were moved out of the country in 2013. Manufacturing has been the hardest hit, with more than 50 percent of firms surveyed reporting that they had outsourced employees over the year. Most – 44 percent – said that they did so to lower their operating costs.