Federal Bill to Discourage Offshoring and Use of Tax Havens Reintroduced

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Rep. Jerry McNerney (D-Calif.) has reintroduced legislation designed to discourage corporations from offshoring jobs. The Stop Outsourcing and Create American Jobs Act of 2011 (H.R. 3338) allows the federal government to give contracting preferences to companies that have not offshored jobs and substantially increases penalties for companies that use illegal tax havens. Rep. McNerney previously had introduced the same legislation in June 2010, but the bill (H.R. 5622) never made it out of committee.

The Act would require federal departments and agencies to ask corporations about their outsourcing practices when those companies seek government contracts, and would provide contracting preferences for those companies that have not engaged in “outsourcing” – defined as the “laying off of a United States worker from a job, and the hiring or contracting for the same job to be performed in a foreign country” – during the prior year. Corporations that lie about their “outsourcing” practices could be fined up to the value of the contract sought, and would be barred for two years from seeking new government contracts. Any revenue raised from fines would go towards pay down the national debt.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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