WASHINGTON, D.C.—U.S. Sen. Sherrod Brown (D-OH) today held a news conference call to announce his support of the Bring Jobs Home Act, new legislation that would establish a tax incentive for businesses to bring jobs back to the U.S., while ending tax loopholes for companies that outsource jobs to foreign countries. The Bring Jobs Home Act has two primary components: it would provide incentives to companies that reshore jobs by creating a new tax cut equal to 20 percent of the cost associated with bringing jobs and business activity back to the U.S. and would also end an existing tax deduction that allows businesses to classify moving personnel and company components to a foreign country as a business expense and therefore deduct the cost of offshoring from their taxes.
“This is about replacing ‘outsourcing’ with ‘reshoring.’ Our tax policy should encourage companies to return to the United States—and discourage them from ever leaving,” Brown said. “But right now, our tax code is a bit backwards. As it stands, businesses can classify moving personnel and company components to a foreign country as a business expense and therefore deduct the cost of offshoring from their taxes. Combined with our outdated trade policy, current American tax law encourages companies to move jobs offshore – where labor is cheap and environmental and health standards are weak.
“It’s clear why the United States, and Ohio especially, is a good place to do business. We have a first-class workforce, a strong network of colleges and universities, and manufacturing know-how that is second to none. In Ohio, we’re seeing more and more companies actively moving operations back to the United States from abroad,” Brown added. “But we must continue to make the United States more attractive to business development and investment, and to be competitive in the global marketplace. The Bring Jobs Home Act makes two common-sense changes in our tax laws. It gives a 20 percent tax credit that any business can use for moving operations back to the United States. In providing this tax credit, we give incentives to companies to reshore jobs that might have been moved abroad earlier to places like China, Mexico, or India. And importantly, the legislation also ends the backwards practice that allows businesses to deduct from their taxes the cost of shipping jobs overseas.”
According to the White House, in the past two years, more than 400,000 manufacturing jobs have been created, while manufacturing production has increased by about 5.7 percent on an annualized basis since its low in June of 2009, its fastest pace in a decade. The auto industry has led the rebound with more than 20,000 jobs at GM and Chrysler, and thousands more in the auto supply chain.
However, serious challenges remain. In January 2012, the National Science Board reported the United States lost 687,000 advanced manufacturing jobs between 2000 and 2010. China’s direct subsidies, especially in advanced sectors like auto, wind, and solar; currency manipulation; restraints on raw materials and rare earths; and technology transfer through joint ventures have enticed companies to move offshore and pose threats to U.S. growth.
On the call, Brown was joined by Wayne Earley, CEO of PolymerOhio—an Ohio Edison Technology Center—to outline how the Bring Jobs Home Act could help encourage additional businesses to reshore jobs in the U.S. PolymerOhio has worked extensively with a number of Ohio companies to help them return production to the U.S.
“Over the past several years, I have been working with Ohio companies that are seeing the cost difference narrow considerably between production abroad and production here in the United States,” Earley said. “The activity we are seeing in Ohio is part of a national trend—which is encouraging, but policies are needed to build on this momentum. The legislation Senator Brown is introducing is a very important step. There’s no question that companies want to see the tax code reward investments made in the United States.”