Keeping jobs in the US by force

[stpioc]

A side effect of Trump tax...

Saving American jobs from going overseas was the cornerstone of candidate Trump’s populist campaign for president. “We’re just shipping company after company after company is leaving this country and leaving jobs behind,” Trump said in March of 2016. “And I’m going to get it stopped.” In October of 2017, while the GOP tax bill was in its early stages, Trump announced he was looking into legislation that would actively punish companies that moved overseas. He told Forbes magazine that U.S. companies that move their operations to another country would “get penalized severely.”

An overlooked part of the Congressional Budget Office report released last week, however, suggests corporations may be incentivized under the legislation to offshore “tangible assets” like factories and offices. “By locating more tangible assets abroad, a corporation is able to reduce the amount of foreign income that is categorized as GILTI (Global Intangible Low Taxed Income),” the report said. “Similarly, by locating fewer tangible assets in the United States, a corporation can increase the amount of U.S. income that can be deducted as FDII (Foreign-Derived Intangible Income). Together, the provisions may increase corporations’ incentive to locate tangible assets abroad.”

The CBO findings echo analysis from non-partisan think tanks like the Institute on Taxation and Economic Policy, which found that the Republican Tax Cuts and Jobs Act would make offshore tax dodging even worse than it was before.  The Center on Budget and Policy Priorities similarly found that the plan is “likely to lead to more outsourcing of U.S. jobs and a larger trade deficit” due to its tax cuts for overseas profits.

CBO confirms GOP tax bill will worsen offshore tax dodging – ThinkProgress