New US law may make outsourcing tough for MNCs

[OhioChick]

Source: Economic Times of India

1 Jun 2010, 0600 hrs IST,Pankaj Mishra,ET Bureau

BANGALORE: American lawmakers plan to make it less attractive for the country’s multinational giants IBM and GE to expand their workforce in cheaper locations such as India by taxing their income from international markets, and encourage job creation by renewing several expired tax breaks for local R&D.

Last week, the House of Representatives approved the ‘American Jobs and Closing Tax Loopholes Act’ on a 215-204 vote, clearing the way for the US Senate to hold final discussions in June. At a time when the unemployment rates in the US are hovering around 9.9%, lawmakers are under tremendous pressure to act against the companies seen as creating jobs overseas even as they lay off workers in the country.

“In this legislation, which is job creating, it closes the loophole which has allowed businesses to ship jobs overseas. Can you believe that we have a tax policy that enables outsourcing? So, if you have one thing to say about this bill to your constituents, you can say that today, you voted to close the loophole to ship US jobs overseas and giving businesses a tax break to do so,” House of Representatives speaker Nancy Pelosi told the lawmakers before the voting process started on Friday last week. “It is not right. It will be corrected today.”

The proposal, expected to cost nearly $112 billion, will be discussed by the Senate during week of June 7 after Congress’ Memorial Day recess.

However, India’s $60-billion outsourcing sector, which counts GE and Citigroup among its top customers, does not see any direct impact.


Read more: http://economictimes.indiatimes.com/infotech/ites/New-US-law-may-make-outsourcing-tough-for-MNCs/articleshow/5996731.cms

[truedelphi]

1. Ah, reform season. When the lobbyists descend and offer the

"reforming" legislators the money they're indirectly asking for.

Then the many loop holed reforms come in, and the weakest plug for the dike is chosen.

Our government Congress critters - American Capitalism at its finest.

<sarcasm meant>

[Angry Dragon]

2. Why should it cost the American taxpayer money to keep jobs here??

[jody]

3. Transfer pricing is a creative way for corporatist to steal from We the People under laws passed by

their puppets in congress and signed by their president in the White House.

We the People can beg for crumbs from the bounty of their tables.

[napi21]

4. Voting to eliminate outsourcing would be a GREAT campaign

issue to trash a Pub opponent. I'd be very surprised if many or any Pubs vote for it, but I don't know of ANY regi;ar Americans who aren't AGAINST outsourcing, no matter what party they are aligned with.

[girl gone mad]

5. The way I see it..

outsourcing to Indian call centers is just an elaborate way to get customers to stop expecting or using customer support.

I'd rather cancel my service than have to talk to someone at a call center in India. In fact, that's just what I did when my ATT phone service stopped working properly and they routed my call to a "Bob Smith" who tried his best to communicate with me in broken sing-song jibberish. I was very patient with Bob, but after asking him to repeat himself a few dozen times, I said enough, I can just do without a land line, thank you very much.