Washington, DC – With manufacturers in Rhode Island and across the country struggling in the wake of the recession, U.S. Senator Sheldon Whitehouse (D-RI) today introduced legislation to support the manufacturing sector and keep good jobs in America. Whitehouse’s Offshoring Prevention Act would close a costly tax loophole that rewards companies for moving factories overseas. The legislation is cosponsored by Senators Patrick Leahy (D-VT), Bernie Sanders (I-VT), Barbara Boxer (D-CA), Dick Durbin (D-IL), Sherrod Brown (D-OH), and Tom Harkin (D-IA).
“As I travel around Rhode Island, I’ve heard from local businesses who are proud to provide good jobs for their community, and who want to keep those jobs here in the Ocean State,” said Whitehouse. “It makes no sense that our tax code allows companies to delay paying income taxes on profits made through overseas subsidiaries, with no such benefit for domestic manufactures, providing them with an incentive to move jobs out of the country.”
“American taxpayers shouldn’t be stuck with the bill when companies move their facilities offshore,” said Leahy. “If the United States is to maintain its status as the lead innovator in the global marketplace, we must eliminate these tax incentives for businesses to move overseas. Enacting the Offshoring Prevention Act is one way Congress can create jobs here at home for hardworking Americans.”
“One of the major reasons why the unemployment rate is too high and wages are too low is because large corporations are shipping our jobs to China and other low-wage countries. It makes absolutely no sense to continue to reward large companies that are shipping our jobs overseas with massive tax breaks. This practice has got to stop,” said Sanders. “With nearly $2 trillion in cash on hand, it is time for corporate America to stop outsourcing jobs to low-wage countries, and start reinvesting in the United States.”
“The United States needs maintain our position as a leading producer of goods and services that are competitive around the world,” Durbin said. “We have done it in the past and we can do it again, but not without changing our laws to give American workers a fighting chance. Our tax code should be designed to help American companies create good-paying jobs right here in the United States and that’s why I’m supporting this bill.”
“In Ohio, we know how to make things. Our state has a rich manufacturing heritage and spirit of innovation. But due to lax trade law enforcement and tax loopholes that subsidize companies for moving factories overseas, Ohio has lost millions of manufacturing jobs over the past decade,” said Brown. “This bill closes corporate tax loopholes that encourage jobs to be offshored. The Offshoring Prevention Act of 2011 ends the incentive for manufacturers to ship their jobs overseas and will encourage them to keep their jobs right here in the United States, where the workforce is second-to-none.”
Currently, U.S. companies that manufacture goods abroad for sale here at home are allowed to defer payment of federal income tax – waiting to pay taxes on foreign income in years that minimize their tax liability. The Offshoring Prevention Act would require that companies that send factories and jobs overseas play by the same rules as ones supporting jobs in the U.S., removing an offshoring incentive and helping local businesses compete.
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