Penalties for outsourcing
Introduction
Should the government protect American jobs by imposing stiff penalties on companies that transfer jobs offshore by outsourcing or manufacturing in a different country? Imposing high taxes to control the free flow of international business is harmful to the United States (US) economy and to other developing nations. It is not in the best interest of the US to impose taxes on companies, for offshoring jobs. The following research, will show why the long-term negative consequences for the taxation of companies outsourcing far outweigh the short-term positive gains for the US.
Negative consequences for taxation of companies outsourcing will ultimately lead to the US becoming a non-competitive nation in the international market. Without this competitive stance US economic growth will slow, leading to a loss of jobs for US citizens much large than what outsourcing causes today. Furthermore, the US will reduce its positive influence in other developing nations.
Negative aspects of taxing outsourcing
Companies establishing overseas facilities have a positive effect on inhabitants surrounding the facilities. These facilities provide the opportunity for work that otherwise would not be available to the community. “These are young college grads, most of these kids, who aren’t engineers. They could never get jobs, not for $200 to $300 a month, which is the starting pay in a call center, without this opportunity (Teves).” Jobs at $300 a month almost double the average per capita income of India ($1219). These jobs provide an income and education opportunity that would have otherwise never been available.
In many instances, employees are also given the chance to gain valuable work experience, while receiving higher than average pay. When considering the taxation of companies that export jobs from the US, the effect on other nation’s communities must also be considered. The taxation of outsourcing could remove valuable...