6 ms·
Ohio senator introduces 25% tax on companies that outsource jobs overseas
- decimalenough 1y ago> any money paid by a U.S. company or taxpayer to a foreign person whose work benefits U.S. consumers. How on earth is this going to defined and enforced? Isn't anything and everything shipped from overseas to the US, physically or electronically, "benefiting US consumers"? Update: Here's the full text of the bill. https://www.taxnotes.com/research/federal/legislative-documents/legislative-text/halting-international-relocation-employment-hire-act-introduced/7szk9 https://www.taxnotes.com/research/federal/legislative-docume... And the definition is: The term 'outsourcing payment' means any premium, fee, royalty, service charge, or other payment made — “(A) in the course of a trade or business, “(B) to a foreign person, and “(C) with respect to labor or services the benefit of which is directed, directly or indirectly, to consumers located in the United States. ... (c) FOREIGN PERSON. — For purposes of this section, the term 'foreign person' means any person who is not a United States person, except that such term shall not include any corporation or partnership which is organized under the laws of a possession of the United States. Note that goods are excluded, which is the only sliver of sanity in this whole thing, although it's also a loophole big enough to drive a truck through: if I get my favorite Indian outsourcing company to build me a Web app and ship it by USB drive, did I just avoid the tax? In any case, enforcement will be by requiring everybody who files tax returns to self-report under threat of perjury: c) REPORTING. — The Secretary of the Treasury, or the Secretary's delegate, may — (1) require United States persons making payments to foreign persons (as defined in section 5000E of the Internal Revenue Code of 1986, as added by subsection (a)) to file a return of tax under section 5000E of such Code or to file an information return concerning such payments, which may include — (A) information on whether such payments are outsourcing payments (as defined in section 5000E of such Code), and (B) such other information concerning such payment as the Secretary may reasonably require to enforce the amendments made by this section, and (2) require the officers of any corporation to certify on such return, under penalty of perjury, the character of such payments.
- tokioyoyo 1y agoHeadline farming. You come up with feel-good proposals to get to the top, so your name would be recognized later on. I might be completely wrong, but it’s technically a strategy that works well.
- dpkirchner 1y agoThey're going for gut reactions by people who are either incapable of or choose not to use second-order thinking. It's all about the gut -- if you look deeper, you're a lousy ivory tower liberal, yadda yadda.
- xnx 1y agoMissed an opportunity by not calling it an "foreign outsourcing tariff".
- csomar 1y agoWhat if I told you, this is already enforced in the form of tax withholding (W8-BEN) but it only affects a few countries that are considered "tax heavens". Enforcement is easy: You enforce at the point of "exit of money". Banks can do this enforcement or at least inform the relevant authorities about certain transactions.
- usrusr 1y agoNo need to enforce, companies will eagerly leave the state just knowing that it could.
- jdblair 1y agoI'm a US citizen living in The Netherlands. Am I a US Person or a Foreign Person?
- general1465 1y agoAccording to IRS you are definitely a US Person
- gmueckl 1y ago
- GiorgioG 1y agoBrilliant
- Sytten 1y agoI don't see how that will do anything: - 25% is not enough to matter if you drop from 130k US engineer to a 40-50k outsourced - International corporation will easily side step that since the US Corp is not paying for salaries to the foreign Corp, just dues to exploit the IP at best So at best this would be hurtful to smaller businesses like the stupid section 174.
- TZubiri 1y agoWe shouldn't refrain from passing a law just because it can be circumvented or because it has partial instead of total desired effect.
- seanmcdirmid 1y agoIt is brazenly unequal. If your company makes things for 5e international markets, and you employ international production staff, you now have to separate things you do for US consumers and things you do for non-US consumers to figure out how much of this tax you should pay, it’s an accounting nightmare, especially if you ship the same product to Us and non-US consumers. More so, your non-US competitors can still ship product to US consumers without being subject to the tax, and other companies might retaliate with a tax on US labor that targets their own market, because why not?
- stonogo 1y agoNo, we should refrain from passing laws that are anticompetitive and unenforceable, like this one is.
- idiotsecant 1y agoThose are exactly the laws we should refrain from passing
- decremental 1y ago[dead]
- downrightmike 1y ago
- ggm 1y agoWhat does the senator think happens to the US dollars sent overseas, to pay these people?
- blitzar 1y ago> What does the senator think There is little evidence to suggest that any senators poses the power of thought.
- lucyjojo 1y agowhat happens to these dollars?
- ggm 1y agoThey circulate in the global economy and since they're denominated in USD at some point the most efficient use is to buy American products with them. What goes around comes around. Plus, the senators consumers got access to cheaper goods and services. Jobs are not the only determinant of benefit to America.
- lucyjojo 1y agoi live in one of those countries. we're not rich, we do not buy many american products. most of the money goes into mortgage, food, school for the kids, and occasional local family trips. that's the bulk of my spending. in my case i have a 6yo android phone, a 6yo benq monitor, a recent (2024) mac mini and some indie steam games. i do not own anything else american. i do pay for youtube premium and a netflix family account and do use amazon to buy non-american products. a small part goes into retirement funds with a smaller part from that going to back to america. the us runs a big trade deficit with my country so that money is not really seeing back the american shores but the part that is definitely does not head to the american people. increasing inequality mechanics imply it's proportionally more and more funneled and concentrated into the elite (stocks&bonds, rent-seeking "post"-capitalism, lobbying, fiscal optimization etc.).
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- seanmcdirmid 1y agoSo this only applies to American companies? So I’d a German company decides to use Indian labor to do something for US consumers, they avoid the tax, but Facebook or Google would pay it. Since these companies also have international markets for their products, how would Apple figure out how much of their iPhone work is for US consumers and how much isn’t?
- alephnerd 1y ago1. I think this is a performance act 2. How would this work for subsidiaries or JVs? For example, when Google opens it's umpteenth office in India, it's part of a separate entity called Google India Pvt Ltd.
- deleted 1y ago[deleted]
- cheema33 1y agoWe have some devs in other countries. We pay them about $80K/yr. We have been trying to hire locally. The positions have been advertised for about 6 months at $140K/yr. We have only had unqualified people apply so far. We then bumped the salary to $160K. Still no go. Again, we get takers, but they can't match the skill level of overseas devs at double the salary. Will we pay the 20% tax/fine? Grudgingly yes. Particularly if this stuff becomes law and local labor force becomes even more expensive than it is now. I can also see people coming up with creative ways to circumvent having to pay the tax. It is possible that some companies will move out entirely or create a legally separate entity offshore that is responsible for all the work that they wish to outsource. The same sort of thing happened with manufacturing jobs. You can wish for those jobs to come back all you want. It is not happening in any significant numbers.
- sumedh 1y agoCan you share the job ad posts here?
- testrun 1y agoHave you tried training devs locally?
- thedevilslawyer 1y agoTraining would perhaps be at 50K/yr USD in current environment, and it would be not too many taking up in US environments. In developing nations you can get equivalent training talent at 10K USD/yr, and equivalent fully-trained at 50-80k USD/yr en-mass. (now potentially 20% higher)
- izacus 1y agoTraining would cost 140k/yr and then the dev would skip to a company that can pay more because they don't invest in training.
- deleted 1y ago[deleted]
- palmfacehn 1y agoMore and more parallels to Peronist econ are emerging in the US. All that is missing is a rationalization of taxes on exports. Both sides of the aisle seem opposed to laissez-faire liberalism.
- binary132 1y agohow on earth could market liberalism be underrepresented in American politics when it is so popular with billionaires?
- palmfacehn 1y agoPerhaps it isn't as popular as some tropes would suggest. Those who would buy influence would prefer state interventions in the market to benefit their interests, rather than an open playing field. The best way to sell those interventions to the public might be appeals towards "fairness" and the aforementioned tropes.
- binary132 1y agoare you saying capitalism doesn’t favor capitalists?
- palmfacehn 1y agoI'm happy to elaborate if you can be more precise with your question.
- binary132 1y agoIt sounded like you were saying regulatory capture is better than an open market for established players, but I’m saying I think when you hold all the cards being allowed to do whatever you want is even better.
- zombot 1y agoThe US have been a banana republic for decades, now they've also got the autocratic felon at the top to match.
- general1465 1y agoCreate company overseas and then it is B2B relationship and not outsourcing.
- somethoughts 1y agoI think there could be a case for a fixed amount of annual tax credit for each US citizen that is employed by a company - since presumably that person is not on the government payroll or on benefits so the US government is saving money. The big plus is business owners love claiming tax credits. You would not really need that much paperwork or auditing as far as I can tell since you have every US employees tax info already versus trying to monitor/regulate "outsourcing".
- JumpCrisscross 1y agoThe bill: https://www.moreno.senate.gov/wp-content/uploads/2025/09/The-HIRE-Act.pdf https://www.moreno.senate.gov/wp-content/uploads/2025/09/The... An "outsourcing payment" is defined as "any premium, fee, royalty, service charge, or other payment made...to a foreign person...to labor or services the benefit of which is directed, directly or indirectly, to consumers located in the United States." That exempts B2B. It doesn't have a border-adjustment charge, so any country tariffed less than 25% can undercut American businesses. And it weirdly doesn't use the words wage, employee or employer, which would mean a lot of consumer purchases would be covered, from airline tickets to Spotify charges.
- jmward01 1y agoThe core questions are: Why does a company want to be a US company and why would companies want to hire US employees? With those two lenses in place does this help? The first one is a clear 'no', this makes companies not want to be US companies. For the second one it does give some reason but as others have pointed out, giving incentives and not penalties is generally a better way to do things since that doesn't remove a company's incentive to be a US company and gives them a reason to want to hire local. Similarly, ensuring the workforce is capable and competitive would be a better response because those give clear 'yes' answers to the two questions. Maybe invest in education instead of driving companies away with penalties? Nah. That's crazy.
- mikemcquaid 1y agoAs a Scottish former founder with a bunch of founder mates outside the US: > Why does a company want to be a US company A big part of this is “they want investment from US VCs which demand it”. Stripe Atlas and co. have made it easier and more popular than ever to have a US entity and e.g. Scottish entity and hire your engineering staff in the latter. Sounds like this may or may not be hit by this tax but it’d still be way cheaper to pay it given how much cheaper devs are over here.
- dyauspitr 1y agoSeems like a good way to get American companies to incorporate in Ireland.
- vinod1073 1y agoThat makes all the companies of that locality uncompetitive. They will move elsewhere to remain competitive.
- orwin 1y agoI'm not a lawyer, but doesn't it applies to services you buy too? Like of, god forbid, a US company pay for SAP, it'll be 25% too? or if you pay for spotify when apple Music exist, it'll be a 25% surcharge? Like a tariff, but on services?
- throwawa14223 1y agoThis is not nearly punitive enough. If this causes companies to leave hit the traitors even harder.
- jaybrendansmith 1y agoRidiculous of its face. I am part of a multi-national organization. We have offices in 92 countries, and business in 118, with R&D in the US and all over the world. Who is outsourcing to whom, exactly? What is outsourcing, really?
- haileyLlyod3 1y ago[dead]