| Job Outsourcing Statistics | Data |
| Total number of U.S. jobs outsourced in 2015 | 2,382,000 |
| Number of jobs outsourced to China since 2001 | 3,200,000 |
| Number of California jobs lost to outsourcing since 2001 | 560,000 |
| Percent of CFO’s surveyed who said their firm was currently offshore outsourcing | 38 % |
| Percent of CFO’s who favored India for outsourcing | 26 % |
| Percent of CFO’s who favored China for outsourcing | 18 % |
| Top Careers at Risk for Outsourcing | Jobs Lost in 2015 | Wages Lost |
| Computer programmers / software engineers | 211,700 | $14,400,000,000 |
| Accountants / auditors | 160,000 | $8,500,000,000 |
| Lawyers | 40,400 | $4,300,000,000 |
| Insurance sales agents | 11,000 | $591,000,000 |
| Real estate brokers / agents | 6,700 | $332,000,000 |
| Chemists / physicists | 3,700 | $230,000,000 |
| U.S. Metro Areas with the Highest Risk of Jobs Being Outsourced | Percent of Jobs at Risk |
| San Jose | 18 % |
| San Francisco | 16.5 % |
| Boston | 14 % |
| Atlanta | 13 % |
| New York | 12.5 % |
| Chicago | 12 % |
| Houston | 11 % |
| Los Angeles | 10.5 % |
| Detroit | 10 % |
| Percent of Companies that Outsource by Sector | Percent of Companies |
| Manufacturing | 53 % |
| IT Services | 43 % |
| R&D | 38 % |
| Distribution | 26 % |
| Call or Help Centers | 12 % |
| Reasons Why Companies Outsource (Multiple Answers Allowed) | Percent |
| Reduce or control costs | 44 % |
| Gain access to IT resources unavailable internally | 34 % |
| Free up internal resources | 31 % |
| Improve business or customer focus | 28 % |
| Accelerate company reorganization / transformation | 22 % |
| Accelerate project | 15 % |
| Gain access to management expertise unavailable internally | 15 % |
| Reduce time to market | 9 % |
| What Leading Economists Believe About Job Outsourcing | Percent |
| Hurts the Economy | 89 % |
| Helps the Economy | 17 % |
| Has no effect | 10 % |
| Not sure | 4 % |
| Top Rated Outsourcing Countries |
| Country | Overall Rating | Cost Index | Resources / Skills | Workforce |
| India | 7.1 | 8.3 | 6 | 1,430,000,000 |
| Indonesia | 6.9 | 8.6 | 4.3 | 1,033,000,000 |
| China | 6.4 | 7 | 5.6 | 780,000,000 |
| Bulgaria | 6.4 | 8.8 | 2.9 | 3,000,000 |
| Philippines | 6.3 | 9 | 2.8 | 39,000,000 |
| Jordan | 6.2 | 7.6 | 2.7 | 2,000,000 |
| Singapore | 6.5 | 6.4 | 5.7 | 3,000,000 |
| Thailand | 6 | 8.2 | 2.3 | 39,000,000 |
| Lithuania | 5.9 | 7 | 3.9 | 2,000,000 |
| Egypt | 5.8 | 9 | 0.9 | 26,000,000 |
| Malaysia | 5.8 | 7.9 | 2.2 | 12,000,000 |
| Estonia | 5.8 | 7.5 | 5.2 | 1,000,000 |
| Chile | 5.7 | 7.2 | 3 | 8,000,000 |
| Hungary | 5.6 | 6.9 | 3.4 | 4,000,000 |
| Poland | 5.6 | 6.1 | 3.6 | 17,000,000 |
| Czech Republic | 5.6 | 6.9 | 3.2 | 5,000,000 |
| Ukraine | 5.5 | 6.3 | 3.2 | 22,000,000 |
| Romania | 5.5 | 6.8 | 2.7 | 9,000,000 |
| Latvia | 5.4 | 7 | 2.7 | 1,000,000 |
| Vietnam | 5.4 | 7.4 | 2.5 | 46,000,000 |
| Ghana | 4.9 | 7.5 | 0.9 | 11,000,000 |
| South Africa | 4.6 | 6.9 | 0.6 | 17,000,000 |
| Kenya | 4.5 | 6.7 | 1.3 | 18,000,000 |
| Senegal | 4.3 | 7.1 | 0.2 | 6,000,000 |
The Atlantic claims we can stop worrying, ok.
It was often cheap labor in emerging markets that, more than two decades ago, led companies in developed markets to move company jobs away from the home country either to company owned facilities (off-shoring) or to third parties (out-sourcing) in developing markets. The broad idea was that less expensive manufacturing or inexpensive white collar workers would create goods and services in developing nations that would serve world markets. China, especially, would be the global product-manufacturing center; India, via the web, would be the global service provider.
Read more > http://tinyurl.com/j8wp3lp
How about I tell the owner of "The Atlantic" to kiss my ass?
Expect more Pfizer-type deals in which large American companies buy foreign rivals and move their head quarters outside the United States.
Randall Stephenson, the chief executive of AT&T T, -1.26% , said a burdensome tax code is driving companies to abandon the U.S. and more are likely to leave absent major reform.
“The Pfizer situation is just a continued reinforcement of how uncompetitive our tax system is in the United States,” Stephenson said in a conference call with reporters. Stephenson is also chairman of the Business Roundtable, a group that represents the largest U.S. companies. “It tells you that something is fundamentally wrong.”
Businesses have been pushing for tax reform for years, arguing that U.S. corporate tax rates are too high compared to foreign countries. In Pfizer’s PFE, -0.93% case, the large drug company plans to buy Ireland-based Allergan and move its corporate headquarters to Dublin. Pfizer said it would have a much lower tax rate if the combined company was based outside the U.S., giving it more money to invest.
The Obama administration has mostly responded by passing new rules designed to make it harder for companies to move their headquarters overseas after a merger, a process known as an inversion. President Obama has even referred to inversions as “unpatriotic.”
“The administration puts band-aid fixes in place to try to discourage companies from doing this,” said Stephenson, adding that such an approach probably won’t work.
Are you done kissing? Now buy me a box of chocolates.
- Inversions largely occur on paper. Corporations typically do not move their executives or operations overseas.
- Corporations that invert continue to enjoy the benefits of operating here — they just dodge a lot of taxes.
- A dozen U.S. firms are currently considering doing a corporate inversion.
- Walgreens could dodge up to $4 billion in U.S. taxes over five years if it inverts. One-quarter of its sales are from Medicare and Medicaid.
- Medtronic plans to move its corporate address to Ireland, a tax haven, to avoid paying U.S. taxes on $20.5 billion in offshore profits.
- U.S. corporations already dodge $90 billion a year in income taxes by shifting profits to subsidiaries — often no more than post office boxes — in tax havens.
- U.S. corporations hold $2.1 trillion in profits offshore — much of it in tax havens — that have not yet been taxed here. An inversion can let firms dodge paying taxes on those profits.
Talking points
- Corporations that renounce their U.S. “citizenship” and shift their address offshore are deserters. They are traitors to America. They want all the benefits of being an American company without paying their fair share of taxes. That makes the rest of us pick up the tab.
- It is unpatriotic for a corporation to abandon America by shifting its address to a tax haven in order to dodge paying its taxes.
- Congress must close tax loopholes that make it easy for corporations to shift profits and jobs offshore. Congress needs to level the playing field so that big corporations have to play by the same rules as Main Street businesses that are doing their part.
- Big corporations say that the 35% U.S. corporate income tax rate is too high. But many companies pay much less because of loopholes in our tax code — many pay at a rate of less than 20%.
- 26 corporations paid no U.S. income taxes from 2008 to 2012, including General Electric, Boeing and Verizon. 111 companies paid no income taxes in at least one of those five years.
- We cannot win a race to the bottom. There will always be countries with tax rates that are much lower than ours — sometimes 0%.
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Overview
In recent months, several major U.S. corporations — among them Walgreens, Medtronicand AbbVie — have announced possible plans to renounce their U.S. corporate “citizenship” and move their corporate address offshore by merging with a foreign company. The merged corporation then pays most of its taxes to a foreign government — usually a tax haven — with a low tax rate. This allows it to dodge paying its fair share of U.S. taxes. The process, known as an “inversion,” takes place primarily on paper as most corporate operations remain here.
Why is the issue important?
If corporations use inversions to dodge their tax obligations, American taxpayers have to pick up the tab even though the firms will continue to enjoy the enormous benefits of being headquartered here. Inversions are likely to become a central issue in the debate over corporate tax reform. Conservatives claim that corporations are forced to leave America because the corporate income tax rate is too high. Progressives argue that corporations are already avoiding paying their fair share of taxes due to many loopholes, including inversions.
How does an inversion work?
A corporate inversion occurs when a U.S. company merges with a foreign one, dissolves its U.S. corporate status and reincorporates in the foreign country. The U.S. company becomes a subsidiary of the foreign one, but the foreign firm is controlled by the original U.S. firm.
A U.S. corporation can invert if after a merger the owners of the U.S. corporation retain less than 80% of outstanding stock of the new merged company, or if after the merger the new merged company has “substantial business activities” in the foreign country equaling at least 25% of operations. So, with just a 20% change in ownership, a company can become “foreign” even if it largely operates in and is controlled from America.
What is the tax advantage of an inversion?
Corporations undergo inversions to take advantage of much lower tax rates, usually in tax-haven countries. Once inverted, a company no longer pays U.S. taxes on its global income.Instead, it is only responsible for paying taxes on income generated in the U.S. For example, Walgreens, which had $72 billion in U.S. sales last year, would likely avoid $4 billion in U.S income taxes over five years if it inverts with a Swiss firm. Pfizer, which tried to do an inversion with AstraZeneca in the U.K., would dodge $1 billion a year in taxes here.
Also, U.S. companies with billions of untaxed profits offshore can escape paying taxes on those profits in America if a company inverts. Medtronic reportedly could use $20.5 billion in its untaxed profits now offshore to invest back here and avoid paying taxes on those funds.
Why inversions are unfair
Companies that invert will continue to take advantage of the things that make the U.S. the best place in the world to do business — our educated workforce, legal and transportation systems, and federally-funded research. And they will continue to be able to get government contracts and to sell products to millions of American consumers.
But they will pay far less than their fair share for these services, passing on the cost to American taxpayers and to other companies.
What is President Obama’s position?
Obama’s budget proposed to make inversions very difficult for companies that have the majority of their operations and ownership in the U.S. He would prevent them from reincorporating abroad if they are owned by at least 50% of the former U.S. parent’s stockholders (the current threshold is 80%). He would also require that the new foreign corporation be primarily managed and controlled from abroad.
What is happening in Congress?
Key members of Congress have introduced legislation based on Obama’s plan. Sen. Carl Levin (D-MI), Chairman of a subcommittee that has investigated tax avoidance by Apple and other corporations, has introduced the Stop Corporate Inversions Act of 2014 (S. 2360). Rep. Sander Levin (D-MI) has introduced a companion bill in the House of Representatives (H.R. 4679) that would raise $19.5 billion over 10 years.
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News Coverage
- At Walgreen, Renouncing Corporate Citizenship, The New York Times
- Obama Seeks to Close Loophole That Firms Use to Shield Profits Abroad, The New York Times
- Tax Inversion — How U.S. Companies Buy Tax Breaks, Bloomberg News
- Tax avoidance: The Irish inversion, The Financial Times
- The Levin Brothers Want to End Tax Inversion, but the GOP Refuses, The New Republic
- Move to Switzerland to dodge IRS may give Walgreen blues, The New York Post
Opinion
- Positively Un-American Tax Dodges, Fortune
- Corporate Artful Dodgers, The New York Times
- Pfizer’s Ploy and the Porous Tax Laws, The New York Times
- An Open Letter to Medtronic on What It Means to Be an American Company, The Washington Post
- Companies Take U.S. Benefits, but Flee US Taxes, The Raleigh News and Observer
Resources
- Editorial Board Memo, Americans for Tax Fairness
- Offshoring America’s Drugstore, Americans for Tax Fairness and Change to Win Retail Initiatives
- Much of What You’ve Heard about Corporate “Inversions” Is Wrong, Citizens for Tax Justice
- Corporate Expatriation, Inversions and Mergers: Tax Issues, Congressional Research Service
- 47 Corporate Inversions in Last Decade, Congressional Research Service
- Why Does Pfizer Want to Renounce Its Citizenship?, Citizens for Tax Justice
- Pfizer’s Tax-Dodging Bid for AstraZeneca Shows Need to Tighten U.S. Tax Rules,Center for American Progress
Drawn from Americans for Tax Fairness’ 2014 Tax Fairness Briefing Booklet.
