Bill would fulfill Biden pledge to end tax incentives for big multinational corporations to ship jobs overseas
Washington (February 9, 2023) – After three weeks of the Treasury Department undertaking “extraordinary measures” to uphold the full faith and credit of the United States, Senator Markey joined Senator Sheldon Whitehouse (D-R.I.), chair of the Senate Budget Committee, and Congressman Lloyd Doggett (D-TX) in introducing the No Tax Breaks for Outsourcing Act. Were it not for the Trump tax law, the U.S. would not have hit the debt limit so soon. By ending the Trump law’s incentives for jobs and profits overseas, this bill would join the European Union, United Kingdom, and South Korea in moving to implement the Organization for Economic Cooperation and Development (OECD) global minimum tax agreement and stop the race to the bottom on corporate taxation. The bill would level the playing field for American workers and small businesses by making sure multinational corporations pay the same tax rate on profits earned abroad as they do in the United States.
“If Republicans hadn’t passed the Trump tax giveaway to benefit their wealthy campaign donors, we wouldn’t even be hitting the debt ceiling right now,” said Senator Whitehouse, Chairman of the Senate Budget Committee. “We have got to end the deficit-ballooning incentives the former president created for sending American jobs and profits overseas. Working people pay their fair share in taxes – multinational corporations can do the same.”
“By ending Trump-GOP tax breaks, which encourage multinational corporations to both outsource good-paying American jobs and shift profits abroad, we can raise revenue, bring back American jobs, and make tax laws more fair for all,” said Congressman Doggett. “Let’s add more jobs here in America and insist that profits earned from American consumers are taxed in America, not hidden in offshore tax havens. The No Tax Breaks for Outsourcing Act could recover hundreds of billions of dollars in corporate taxes rightly owed on those profits, which could be invested to promote even more economic growth here in the USA. Avoiding a debt limit crisis is not just about spending levels but also about closing the tax loopholes that have contributed so much to our deficits.”
The legislation is cosponsored by Senators Richard Durbin (D-Ill.), Chris Van Hollen (D-Md.), Elizabeth Warren (D-Mass.), Jack Reed (D-R.I.), Martin Heinrich (D-N.M.), Chris Murphy (D-Conn.), Richard Blumenthal (D-Conn.), Tammy Baldwin (D-Wis.), Jeff Merkley (D-Ore.), Bob Casey (D-Pa.), Tammy Duckworth (D-Ill.), Mazie Hirono (D-Hawaii), Cory Booker (D-N.J.), and Brian Schatz (D-Hawaii).
In 2021, Secretary Yellen led 130 countries in a historic agreement to ensure multinational corporations begin to pay a fair share of tax wherever they operate through a Global Minimum Tax. The No Tax Breaks for Outsourcing Act would implement this agreement by requiring American multinationals to pay the same tax rate on profits earned abroad as they do in the United States. It would apply this tax on foreign profits on a country-by-country basis to prevent companies from dodging taxes by setting up webs of subsidiaries in low-tax countries.
Former President Trump and Congressional Republicans promised their new tax bill would boost U.S. hiring without costing taxpayers, but tax experts say otherwise. One prominent study found companies that benefited most from the Republican tax breaks for profits parked offshore invested more overseas following the law’s passage than they did in the United States. Another study estimates closing offshore tax loopholes could save $77 billion in revenue annually.
The No Tax Breaks for Outsourcing Act would repeal offshoring incentives by:
Labor organizations determined to stop the continued exporting of American jobs, which have previously endorsed the bill include American Federation of Government Employees (AFGE); American Federation of Labor & Congress of Industrial Organizations (AFL-CIO); American Federation of State, County and Municipal Employees (AFSCME); American Federation of Teachers; Communication Workers of America (CWA); International Association of Machinists & Aerospace Workers (IAMAW); International Brotherhood of Teamsters; International Federation of Professional and Technical Engineers (IFPTE); International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW); IUE-CWA; National Education Association (NEA); Service Employees International Union (SEIU); United Steelworkers (USW); UNITE HERE; Union Veterans Council, AFL-CIO; Working America, AFL-CIO.
Other organizations that have previously endorsed the bill include AfricaFocus Bulletin; Alliance for Retired Americans; American Family Voices; Americans for Democratic Action (ADA); Americans for Tax Fairness; American Sustainable Business Council; Association of Concerned Africa Scholars – USA; Campaign for America’s Future; Center for International Policy; Center for Popular Democracy; Coalition on Human Needs; Color of Change; Community Change Action; Congregation of Our Lady of Charity of the Good Shepherd, U.S. Provinces; Corporate Accountability Lab; Crude Accountability; DailyKos; Democrats.com; Economic Policy Institute; Fair Share; Faith Action Network; Financial Accountability and Corporate Transparency (FACT) Coalition; Franciscan Action Network; Friends of the Earth U.S.; Fund for Constitutional Government; Global Alliance for Tax Justice ; Global Financial Integrity; Greenpeace US; Grey Nuns of the Sacred Heart; Health Care for America Now; Indivisible; Institute for Policy Studies – Inequality Program; Institute on Taxation and Economic Policy (ITEP); Interfaith Center on Corporate Responsibility (ICCR); International Rights Advocates; Jobs With Justice; Jubilee USA; Liberty Shared; Main Street Alliance; Maryknoll Fathers and Brothers; Missionary Oblates; MomsRising; National Advocacy Center of the Sisters of the Good Shepherd; National Employment Law Project; National Organization for Women; NETWORK Lobby for Catholic Social Justice; Our Maryland; Our Revolution; Oxfam America; Patriotic Millionaires; Peace Education Center; Progressive Change Institute; Project Blueprint; Public Citizen; Publish What You Pay – United States; Responsible Wealth; RESULTS; Rights CoLab; RootsAction.org; Sisters of St. Francis of Philadelphia; Small Business Majority; South Carolina Small Business Chamber of Commerce; Strong Economy For All Coalition; Take on Wall Street; Tax Justice Network; Tax Justice Network USA; Tax March; United for a Fair Economy; United Church of Christ, Justice and Witness Ministries; United Methodist Church – General Board of Church and Society; US-Africa Bridge Building Project; Voices for Progress; Washington Fair Trade Coalition; Working Partnerships USA.
Full text of the bill is available here.