Murphy, Blumenthal, Colleagues Reintroduce Legislation to Eliminate Trump’s Outsourcing Tax Breaks

WASHINGTON—U.S. Senators Chris Murphy (D-Conn.), a member of the U.S. Senate Health, Education, Labor, and Pensions Committee, andRichard Blumenthal (D-Conn.)on Thursday joinedU.S. Senator Sheldon Whitehouse (D-R.I.)and 15 of their Senate colleagues in reintroducing theNo Tax Breaks for Outsourcing Act, legislation that would reverse the Trump tax law’s breaks for offshoring jobs and profits. The announcement comes as President Trump’s 25 percent tariffs on Canada and Mexico remain under negotiation, while Republicans push to expand those offshoring incentives in their reconciliation bill.
TheNo Tax Breaks for Outsourcing Actwould level the playing field for American companies by requiring multinational corporations to pay the same tax rate on profits earned abroad as they do in the United States. The Trump tax law created a special tax rate for offshore profits that is half the domestic rate. Since the law’s passage,studieshavefoundthat multinationals have increased foreign, rather than domestic investment. Extending the Trump tax law would mean maintaining this half-off rate, which is otherwise scheduled to slightly increase.
If passed, the senators’ legislation would boost U.S. economic competitiveness by encouraging domestic investment, leveling the playing field for domestic companies, and bringing the U.S. into compliance with the global minimum tax agreement. The Joint Committee on Taxationfoundthat large U.S. multinationals paid an average tax rate of just 7.8 percent the year after the Trump law passed, lower than their foreign competitors. They wouldstillpay less than their competitors with a higher rate on foreign profits. Moreover, with over 140 countries moving to implement the global tax agreement, U.S. and foreign multinationals alike will be subject to the new minimum tax whether the U.S. complies or not. Failure to join, however, will mean the revenue fills foreign coffers instead of the U.S. Treasury.
U.S. Senators Richard Durbin (D-Ill.), Jack Reed (D-R.I.), Tammy Baldwin (D-Wis.), Elizabeth Warren (D-Mass.), Jeff Merkley (D-Ore.), Ed Markey (D-Mass.), Brian Schatz (D-Hawaii), John Fetterman (D-Pa.), Chris Van Hollen (D-Md.), Ruben Gallego (D-Ariz.), Mazie Hirono (D-Hawaii), Martin Heinrich (D-N.M.), Cory Booker (D-N.J.), Tina Smith (D-Minn.), and Tammy Duckworth (D-Ill.) also cosponsored the legislation.
TheNo Tax Breaks for Outsourcing Actwould repeal offshoring incentives by:
Full text of the bill is availableHERE.
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