It makes little sense for the U.S. government to provide tax breaks to companies that outsource America's jobs, and yet the recently passed Republican tax law makes the problem worse, it doesn't solve it. That's why Rep. Lloyd Doggett (D-Texas) and Sen. Sheldon Whitehouse (D-R.I.) are introducing the "No Tax Breaks for Outsourcing Act." About the legislation, Doggett said: Let’s level the playing field for domestic companies by ensuring that multinationals pay the same tax rate on profits earned abroad as they do here at home. This legislation would set the minimum tax on the foreign profits of multinationals equal to the statutory corporate tax rate on domestic profits and apply that rate to a similar base. It would end discrimination against companies with mostly domestic sales by not advantaging multinationals with such a huge tax break on profits earned abroad. More specifically, the bill would: Equalize the tax rate on profits earned abroad to the tax rate on profits earned here at home. The new tax law allows companies to pay half of the statutory corporate tax rate on profits earned abroad, and for many it may be nothing or next to nothing. This legislation would end the preferential tax rate for offshore profits and ensure companies pay the same rate abroad as they do in the United States. This leveling of the playing field is achieved by eliminating the deductions for "global intangible low-tax income" and "foreign-derived intangible income." Repeal the 10% tax exemption on profits earned from certain investments made overseas. In addition to the half-off tax rate on profits earned abroad, the new law exempts from tax entirely a 10% return on tangible investments made overseas, such as plants and equipment. This legislation would eliminate the zero-tax rate on certain investments made overseas. Treat "foreign" corporations that are managed and controlled in the U.S. as domestic corporations. This provision would address the "Ugland House problem" of U.S. corporations nominally organizing in tax havens. Ugland House in the Cayman Islands is the five-story legal home of more than 18,000 companies, many of them really American companies in disguise. This section would treat corporations worth $50 million or more and managed and controlled within the United States as the U.S. entities they in fact are and subject them to the same tax as other U.S. taxpayers. Crack down on inversions by tightening the definition of expatriated entity. This provision would discourage corporations from renouncing their U.S. citizenship. It would deem any merger between a U.S. company and a smaller foreign firm to be a U.S. taxpayer, no matter where in the world the new company claims to be headquartered. Specifically, the combined company would continue to be treated as a domestic corporation if the historic shareholders of the U.S. company own more than 50% of the new entity. If the new entity is managed and controlled in the United States and continues to conduct significant business here, it would continue to be treated as a domestic company regardless of the percentage ownership. Combat earnings stripping by restricting the deduction for interest expense for multinational enterprises with excess domestic indebtedness. Multinationals often shrink their U.S. tax bills by paying interest to their foreign-based subsidiaries. Recognizing this injustice, the House Republican tax bill originally prohibited it, as then-President Barack Obama had recommended in his proposed budget. Deductible interest should be limited based on the U.S. subsidiary’s proportionate share of the multinational’s net interest expense, reflecting the underlying business reality. Unable to withstand lobbying pressure, Republicans abandoned this correction. This bill would restore it. The legislation already has been endorsed by the AFL-CIO, AFGE, AFSCME, the Alliance for Retired Americans, Communications Workers of America (CWA), International Federation of Professional and Technical Engineers (IFPTE), UAW, Working America, American Family Voices, Americans for Democratic Action, Americans for Tax Fairness, Campaign for America’s Future, Coalition on Human Needs, Credo, Economic Policy Institute Policy Center, the Financial Accountability and Corporate Transparency (FACT) Coalition, the Institute on Taxation and Economic Policy, Main Street Alliance, MomsRising, Network Lobby for Catholic Social Justice, Other98, Oxfam America, Patriotic Millionaires, People Demanding Action, Progressive Congress Action Fund, Public Citizen and Small Business Majority. Sections Political Action