On September 5, Republican Senator from the state of Ohio, Bernie Moreno, introduced a bill in the US Senate to disincentivise US companies from hiring foreign workers by imposing taxes on their payments to foreign workers. In a press release, Moreno said, “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."

What does the HIRE bill propose?

The bill looks to amend the US’s Internal Revenue Code of 1986 to be able to impose an excise tax on payments by US companies to foreign persons for any services provided to United States consumers. It proposes a 25 percent tax on any outsourcing payment made by US companies to foreign workers. Outsourcing payments in the bill covers a wide range of things from any premium, fee, royalty, service charge, or other payment made for trade or business where the consumer of these services are either directly or indirectly located in the United States. It also looks to take away any kind of deductions made to foreign workers and imposes heavy penalties on those who employ non-American workers.

To determine who is to be considered as ‘foreign’- the bill states that it would be any person who is not a United States person, however, will not include those companies or partnerships where US companies exercise control.

The bill also proposes to establish a ‘Domestic Workforce Fund’, from the taxes collected from the imposition of 25% excise tax or any additional money received from non-compliance of the payment to foreign workers. The fund money will be used for workforce development and retraining programmes that are administered by the Department of Labor and apprenticeship programmes and partnerships programmes with US companies to expand domestic employment in sectors impacted by outsourcing. The funds will also be used to provide grants to various states in the US for workforce development initiatives, especially in places where there have been high levels of job losses.