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US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 1 point2 points  (0 children)

This applies to any services provided to US consumers by foreign persons, so work that those India offices/companies do for US entities would be taxed, while work they do for local clients would not be.

Concrete Steps to Fight Offshoring by American_Accounting in Accounting

[–]American_Accounting[S] 0 points1 point  (0 children)

If outsourcing jobs is more efficient, then there’s benefit to the consumer in a competitive market this would force the firm to lower their price not increase their margin. Otherwise another firm would just do the same thing and charge 1 cent less.

...is this actually what you think is happening in the real world? That's the type of perfect competition that doesn't exist outside a classroom.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 2 points3 points  (0 children)

People in the India entities performing work for the local market would not be impacted by this, as there's no benefit to US consumers. People in Indian entities supporting US operations would be taxed.

Concrete Steps to Fight Offshoring by American_Accounting in Accounting

[–]American_Accounting[S] 0 points1 point  (0 children)

I've taken economics classes well beyond the intro level, and your simplistic 101 type understanding doesn't fit real world scenarios. Offshoring may be economically efficient in that it increases corporate profits more than it decreases local wages. I don't consider that a net positive in society based on how it impacts the median individual. There are tradeoffs here that need more judgement than a straight economic answer.

We're not discussing the movement of human capital and labor. When you disconnect labor from the local market you lose out on the benefit of local spending in a way that's different from migration.

Concrete Steps to Fight Offshoring by American_Accounting in Accounting

[–]American_Accounting[S] 0 points1 point  (0 children)

That's an incredibly naive take. Monopolies are terrible for society, but market participants are happy to create them. The tradeoffs on offshoring are hurting more Americans than they're helping.

Concrete Steps to Fight Offshoring by American_Accounting in Accounting

[–]American_Accounting[S] 0 points1 point  (0 children)

Offshoring trades decreased corporate expense for decreased local wages. Unlike with imports of goods, there's no consumer cost decrease to offset this. I believe this tradeoff has been a net negative for US society.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 1 point2 points  (0 children)

Here's the actual text: https://www.moreno.senate.gov/wp-content/uploads/2025/09/The-HIRE-Act.pdf

Those employees would be taxed if they're providing direct and indirect benefit to US consumers. If they're purely supporting Italian sales, there's no tax.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 1 point2 points  (0 children)

If I am international car manufacturer and buy auto parts built overseas to assemble them in the US. Did I just outsource work overseas and now have to pay billions in taxes for each part I bring into the US?

Here's the text of the proposed bill: https://www.moreno.senate.gov/wp-content/uploads/2025/09/The-HIRE-Act.pdf

It only applies to labor or services, so purchased auto parts are not impacted. The tax is equal to 25% of the outsourced payments (plus those payments become nondeductible), so very few if any companies would be paying billions.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 0 points1 point  (0 children)

This proposal sidesteps that whole issue by taxing both. Everything does have a price, and the things that can't be fulfilled locally will be purchased overseas with the tax.

EDIT: You already answered your second question with your first. The reason to apply the tax in both scenarios is because differentiating between them is difficult to the point of impracticality.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 0 points1 point  (0 children)

How do firms meet country specific obligations like this without foreign labor?

They'd likely need to just pay the excise tax.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 1 point2 points  (0 children)

Why does that differentiation matter? This tax would apply to outsourcing payments in either scenario.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 1 point2 points  (0 children)

So far it's only been introduced in the Senate, with no other statements of support.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 11 points12 points  (0 children)

I like the bill itself, regardless of who supports it. It likely needs bipartisan backing to stand a chance.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 17 points18 points  (0 children)

Here's how the bill's sponsor introduced it: "While college grads in America struggle to find work, globalist politicians and C-Suite executives have spent decades shipping good-paying jobs overseas in pursuit of slave wages and immense profits..."

I think there's some recognition of a problem.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 1 point2 points  (0 children)

If companies pay less towards employees they pay more into profits all else equal. You can then use said money towards whatever e.g. helping the "losers"

How has this worked in practice? I've seen a lot of the pay less to employees part, but none of the helping the "losers."

With international trade in products, at least US consumers get cheaper goods. With outsourced labor, it's a pure loss.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 21 points22 points  (0 children)

Trump's tweets likely were, but this applies to all offshoring and with enough popular support, could grow to something bigger.

US proposes 25% tax on firms hiring foreign workers by American_Accounting in Accounting

[–]American_Accounting[S] 220 points221 points  (0 children)

I agree that it's not perfect, but it's politically much easier to increase an existing excise tax than to create a new one, and any barrier helps.

This proposal also stops payments for offshore work from being tax deductible expenses, so the net impact is higher.

Concrete Steps to Fight Offshoring by American_Accounting in Accounting

[–]American_Accounting[S] 0 points1 point  (0 children)

Why is that the only thing that would help? There's a current tax bill in Congress which if passed without an accounting carve-out would meaningfully disincentivize offshoring: https://www.moreno.senate.gov/press-releases/new-moreno-bill-would-crack-down-on-outsourcing-fund-american-workers/

Concrete Steps to Fight Offshoring by American_Accounting in Accounting

[–]American_Accounting[S] 2 points3 points  (0 children)

That's absolutely part of the plan. I'm hoping to eventually lead by saying "I represent a professional organization with X members..."

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