WITH MORE THAN 85,000 MANUFACTURING JOBS LOST IN NYS IN LAST 3 YEARS: SCHUMER BILL TO GIVE TAX CUTS TO COMPANIES THAT MOVE JOBS TO U.S. FROM OVERSEAS - "MADE IN AMERICA" MEASURE COULD RECEIVE SENATE VOTE AS SOON AS NEXT WEEK
Schumer Bill Will Provide Companies With 24 Months of Payroll Tax Relief For Every Job Moved To U.S. From Overseas
Legislation Will Also Close Tax Loopholes That Subsidize Companies That Move Factories Overseas
Legislation is Likely to be Considered on Senate Floor Next Week
Today, U.S. Senator Charles E. Schumer announced that he is introducing the Creating American Jobs and Ending Offshoring Act (S. 3816) to provide tax cuts to companies that bring back outsourced jobs to the United States. Schumer's legislation would provide 24 months of payroll tax relief to employers for each job brought from overseas to the United States. To be eligible, businesses must certify that the U.S. employee is replacing an employee who had been performing similar duties overseas. The legislation will also close loopholes that provide companies with tax breaks for outsourcing manufacturing jobs.
The legislation, sponsored by Senate Majority Leader Harry Reid and Senators Schumer, Durbin and Dorgan, could be considered on the Senate floor as soon as Tuesday of next week.
"Manufacturing jobs have left New York at an astounding rate for places that have no work rules, no environmental rules and no wages rules, and it's time to level the playing field," said Schumer. "This legislation will provide a tax cut - not a credit - so companies have an immediate incentive to bring jobs back on shore. It is perverse that American taxpayers provide benefits to firms that offshore jobs. By rewarding the companies that bring jobs back to America, this legislation puts the incentive back where it should be."
According to the New York State Department of Labor, since August of 2007 a total of 85,400 New Yorkers have lost their manufacturing jobs. Schumer's legislation, would take two positive steps towards reversing the trend. First, his legislation would give companies a tax cut for creating jobs here in America and second, his bill would end tax breaks that encourage companies to outsource.
The bill, the Creating American Jobs and Ending Offshoring Act (S. 3816) does three things:
Encourages businesses to create jobs in the United States. The legislation provides businesses with relief from the employer share of the Social Security payroll tax on wages paid to new U.S. employees performing services in the United States. 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 threeyear period beginning September 22, 2010.
End Subsidies for Plant Closing Costs . The legislation eliminates 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.
End Tax Break for Runaway Plants . The Creating American Jobs and Ending Offshoring Act ends 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.
Outsourcing and unfair competition from foreign countries are largely responsible for 85,400 lost manufacturing jobs between August 2007 and August 2010 according to the New York State Department of Labor. Below is a regional breakdown of job losses. Attached please find a county by county report.
· In Western New York, 14,500 manufacturing jobs have been lost.
· In the Capital Region, 5,600 manufacturing jobs have been lost.
· In the RochesterFinger Lakes Region, 15,900 manufacturing jobs have been lost.
· In Central New York, 6,900 manufacturing jobs have been lost.
· In the Southern Tier, 8,100 manufacturing jobs have been lost.
· In the Hudson Valley, 8,700 manufacturing jobs have been lost.
· In the North Country, 2,300 manufacturing jobs have been lost.
· In Long Island, 10,700 manufacturing jobs have been lost.