Runaway Plants Bill
Senator Dorgan is very concerned about the outsourcing of U.S. jobs to foreign countries and strongly believes we need to do more to keep good jobs here at home. He has been the lead proponent of eliminating the tax breaks enjoyed by U.S. companies that move their operations abroad.
Senator Dorgan has introduced legislation, S. 1284, along with 12 other senators to shut down a tax loophole that rewards U.S. companies that move U.S. manufacturing jobs overseas.
You may not believe it, but when a U.S. company closes down a U.S. manufacturing plant such as Huffy bicycles or Radio Flyer little red wagons, fires its American workers and moves those good–paying jobs to China or other locations abroad, U.S. tax law actually rewards those companies with a large tax break called deferral. The tax code allows these firms to defer paying any U.S. income taxes on the earnings from those new foreign–manufactured products until those profits are returned, if ever, to this country. If a company making the same product decides to stay in this country, it is required to pay immediate U.S. taxes on the profits it earns here.
Imports into the United States from the foreign subsidiaries of U.S. companies more than doubled from $92 billion in 1993 to $203 billion in 2004, while the United States has lost 3.2 million manufacturing jobs since 2000.
Senator Dorgan has also included his runaway manufacturing plants proposal as part of a major deficit reduction bill that he introduced earlier this year to help get the nation’s fiscal house back in order.
