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> In an outline of the Outsourcing Prevention Act, Sanders said the law would bar companies that ship jobs overseas from enjoying federal contracts, tax breaks,
by euyyn 10y ago
> In an outline of the Outsourcing Prevention Act, Sanders said the law would bar companies that ship jobs overseas from enjoying federal contracts, tax breaks, grants or loans; require clawbacks of federal perks; levy a tax that “would be equal to the amount of savings achieved by outsourcing jobs or 35 percent of its profits, whichever is higher” and prevent executives of companies that offshore jobs from drawing bonuses, stock options or “golden parachutes.”
Unintended consequences I see:
* Companies rush their plans to move jobs away before this law is passed.
* If it's cheaper to build X in Mexico, and an American company used to build X in the US as part of their product, now instead of moving these jobs to Mexico they might just eliminate these jobs and buy the product from some other company that builds it in Mexico.
- ocdtrekkie 10y agoAt least regarding the first bullet point, I think the law will need to account for companies that have already done so. At least where relevant without seeing ex post facto behavior, maybe with a couple years of grace period. - American companies using overseas manufacturing become ineligible for all of the referred to tax breaks starting the next tax year. - American companies using overseas manufacturing shouldn't get any new or renewed government contracts. If you still manufacture overseas in three years, you're now dropped from the options the federal government will consider. If the long-term effects that will affect existing outsourced manufacturers are heavy enough, companies won't take the risk of moving jobs out now, knowing that the return probably won't be there in the long run.