HIRE Act proposes 25% tax on companies for hiring foreign workers.
Amid MAGA talks of taxing companies for hiring foreign workers or banning them from hiring Indians, senator Bernie Moreno (R-Ohio) has introduced the HIRE Act (Halting International Relocation of Employment), vowing protection of American workers from jobs getting outsourced by US companies. The Act, introduced on September 5, proposes to introduce a 25 per cent tax on outsourcing payments, meaning any money paid by a US company or taxpayer to a foreign person whose work benefits consumers in the United States. “While college grads in America struggle to find work, globalist politicians and C-Suite executives have spent decades shipping good-paying jobs overseas in pursuit of slave wages and immense profits – those days are over,” said Moreno. “It’s time to fight for working class Americans and ensure they can work and retire with dignity. If companies want to hire foreign workers instead of Americans, my bill will hit them where it hurts: their pocketbooks.”Money raised by the penalty on spending on overseas workers will be used to support apprenticeship programs in the United States as well as workforce development programs, the Act proposes.
What is the HIRE Act?
- Creates a 25% tax on outsourcing payments, defined as any money paid by a U.S. company or taxpayer to a foreign person whose work benefits consumers in the United States.
- Creates a ‘Domestic Workforce Fund’ to collect any money raised from the outsourcing tax, which is used to support apprenticeships and workforce development programs.
- Prohibits companies from deducting any outsourcing payments.
How will the HIRE Act impact India, if passed?
HIRE Act is only a proposed Act and it may not get passed in its existing form. A 25% tax on outsourcing will raise costs significantly, threatening India’s major export: IT and business process services. If the Act is passed, US firms would be forced to shift work onshore to get relief from the additional tax.
