William Thien

On The Subject of Outsourcing and Tax Breaks

Posted on: July 20, 2014

If a company is going to receive a tax break for outsourcing production to overseas facilities or those facilities merely just outside of our borders, and companies do receive such tax breaks, then I believe those products made overseas should not be allowed to be sold in The United States. Those products should only be for sale outside the borders of The United States. Or, if companies and corporations wish to sell products in The United States that are produced overseas, then any related tax breaks should be removed.

American tax payers should not have to provide a corporate tax break for companies making products somewhere else. American tax payers should not have to pay to undermine their own economic condition.

There may be substantial benefits as some companies claim to using overseas production facilities, and that is quite likely, but I can assure you that undermining the American workforce is not one of those benefits. Even if companies outsource component parts for their products to overseas facilities, they should not receive tax breaks if those products are sold in The United States.

From the perspective of the federal government and income tax revenue, it is a no brainer. Why is the federal government foregoing potentially huge income tax revenue and on top of that throwing away more revenue to corporations in the form of tax breaks for setting up overseas production. The clarion call from the corporate world when such tax breaks became commonplace was “what was good for business was good for America.” But what is bad for the American worker is bad for America. Outsourcing production is bad for the American worker. And outsourcing directly affects income tax revenue.

In a world with a global economy we cannot prevent companies from outsourcing, that would be unfair. But what we can do is see to it that companies eligible for tax breaks operating in that global economy don’t use those tax breaks to destroy our own economy by undermining our own workforce.

Either products made overseas by companies receiving tax breaks for overseas production should not be sold here in The United States, to include components of larger products, or those companies should not receive tax breaks for outsourcing.

There is nothing wrong really with buying products made overseas from time to time by foreign companies or American ones for that matter. Often you don’t really have a choice because we don’t make all products in The United States. But it is one thing to buy something that is made in The United States and it is another thing entirely to buy something that through clever marketing appears to be made in The United States but is in fact almost completely composed of foreign-made products. I recall looking at a T-Shirt in the bargain bin at one of my favorite sporting goods stores. On the front was an American Flag with the word AMERICA! printed boldly on it just like that. When I checked the care label I noticed the country of origin was China. Somebody probably got a tax break for that, too.

Copyright © William Thien 2014

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