In a statement, McNerney said H.R. 5622, the "Stop Outsourcing and Create American Jobs Act of 2010," will prevent job losses by cracking down on tax loopholes that encourage corporations to ship jobs abroad. He said it will also help to ensure that corporations with government contracts are not using the taxpayers' money to ship jobs overseas.
"I've heard from numerous people in our area whose jobs have gone overseas," McNerney said. "One woman wrote me and shared how she was asked to train new employees from Brazil. Then, after they were trained, she lost her job, likely to one of the people she helped. Another person wrote me that his job went overseas in 2006. He was able to find new employment, but was quickly laid off again when this second job was outsourced to India."
"It is imperative to our economic recovery that we take serious steps to prevent American jobs from being shipped overseas," McNerney said. "That's why I introduced legislation that will help close tax loopholes that corporations use to hide assets in tax haven countries and send jobs overseas. It's time to get tough with those who break the rules and outsource good American jobs."
The bill, as written, would also ensure that corporations with government contracts are not using American taxpayers' money to send jobs overseas, according to McNerney. "It's unacceptable that corporations would create jobs in foreign countries while benefiting from U.S. government contracts."
McNerney's Washington, D.C. office said that the non-partisan Congressional Research Service estimates 3.4 million service sector American jobs may be outsourced overseas by 2015. These would be in addition to job losses that have already occurred in the manufacturing sector.
McNerney said that Northern California has been hard hit by outsourcing. He cited another study done by the Brookings Institution, which estimates that between 2004 and 2015, the San Francisco and San Jose metro areas will lose between 3.1 and 4.3 percent of their jobs to outsourcing.
According to the study, jobs that are considered particularly vulnerable to outsourcing include middle class jobs such as manufacturing positions, as well as office support, including data entry and payroll clerks, auditors and tax preparers, computer programmers and software engineers, medical transcriptionists and paralegals, and technical writers.
H.R. 5622 as written directs the Secretary of the Treasury to establish a list of "corporate tax haven countries" and then increases civil and criminal penalties for corporations guilty of a variety of illegal transactions involving a tax haven country, such as fraud, false claims, and tax evasion. This provision provides an additional deterrent to corporations from using tax havens to hide assets and create jobs overseas.
McNerney's office also reported that the non-partisan Government Accountability Office (GAO), in a study conducted in late 2008, estimated 83 out of the 100 biggest public corporations have subsidiaries in tax haven countries or similar jurisdictions. In many instances, these subsidiaries may be created by corporations to take advantage of foreign tax structures and cheap labor, replacing American jobs.
"The legislation will also help ensure that corporations with government contracts are not using American tax dollars to outsource American jobs," McNerney's office stated. "In the aforementioned report, the GAO determined that 63 of the 100 biggest federal contractors also have subsidiaries in tax haven countries or similar jurisdictions."
Steve Riley, vice president of sales and marketing for Electric Vehicles International, a Stockton company, has been complaining to McNerney and others abut unfair competition from abroad.
"Congressman McNerney's bill will help make sure that companies like EVI that are playing by the rules and creating U.S. jobs can compete on fair terms for government contracts," Riley.said. "I appreciate (his) efforts, which will help companies like EVI expand and create jobs in Northern California."