WASHINGTON, D.C. - U.S. Sen. Sherrod Brown (D-OH) today outlined new legislation - which may receive a vote on the Senate floor as early as Monday - that would help save Ohio and American manufacturing jobs. The legislation, known as the Creating American Jobs and Ending Offshoring Act, would provide 24 months of payroll tax relief to employers for each job brought from overseas to the United States. The legislation will also close loopholes that provide companies with tax breaks for outsourcing manufacturing jobs.
"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 takes the carrot-and-stick approach to companies that ship jobs overseas. It encourages companies to bring back jobs previously moved overseas by providing payroll tax relief, but also closes tax loopholes that encourage jobs to be offshored. Simply put, this bill is about replacing offshoring with reshoring."
The Creating American Jobs and Ending Offshoring Act does three things:
· Encourages businesses to create jobs in the United States. The legislation would provide a payroll tax holiday to businesses for new jobs relocated to America to be eligible, businesses must certify that the U.S. employee is replacing an employee who had been performing similar duties overseas. This payroll tax relief is available for 24 months for employees hired during the three-year period beginning September 22, 2010.
· Ends Subsidies for Plant Closing Costs. The legislation would eliminate subsidies that U.S. taxpayers provide to firms that move facilities offshore. The bill prohibits a firm from taking any deduction, loss or credit for amounts paid in connection with reducing or ending the operation of a trade or business in the U.S. and starting or expanding a similar trade or business overseas. The bill would not, however, apply to any severance payments or costs associated with outplacement services or employee retraining provided to any employees that lose their jobs as a result of the offshoring.
· Ends Tax Break for Runaway Plants. The Creating American Jobs and Ending Offshoring Act would end the federal tax subsidy that rewards U.S. firms that move their production overseas. Under current law, U.S. companies can defer paying U.S. tax on income earned by their foreign subsidiaries until that income is brought back to the United States. This is known as "deferral." Deferral has the effect of putting these firms at a competitive advantage over U.S. firms that hire U.S. workers to make products in the United States. The bill repeals deferral for companies that reduce or close a trade or business in the U.S. and start or expand a similar business overseas for the purpose of importing their products for sale in the United States. U.S. companies that locate facilities abroad in order to sell their products overseas are unaffected by this proposal.
According to the Bureau of Labor Statistics, nearly 400,000 manufacturing jobs have been lost in Ohio over the last decade. Attached is a county-by-county analysis detailing the loss of manufacturing jobs in Ohio between 1999 and 2009.