Washington, D.C. – Citing the practices of companies such as AT&T and Wells Fargo, the Communications Workers of America (CWA) today announced their support for legislation introduced in both the U.S. House and Senate, the “No Tax Breaks for Outsourcing Act.” The bill, sponsored by Rep. Lloyd Doggett (D-Texas) along with more than 70 co-sponsors in the House and by Senator Sheldon Whitehouse (D-Rhode Island) in the Senate, would stop rewarding companies that ship jobs overseas and reverse the offshoring incentives embedded in the December 2017 Republican tax bill.
As experts from the Tax Policy Center and the Institute on Taxation and Economic Policy (ITEP) have explained, the Republican “Tax Cuts and Jobs Act” created additional incentives and rewards for profits to be made overseas by allowing companies to pay significantly less of the corporate tax rate on profits earned abroad as they would in the United States, while also exempting certain types of overseas corporate investments from taxes entirely. As the Congressional Budget Office (CBO) noted, these provisions “may increase corporations’ incentive to locate tangible assets abroad” and could accelerate the offshoring of jobs and operations.
According to Shane Larson, Director of Legislation, Politics and International Affairs at the Communications Workers of America (CWA) , “This is not only necessary legislation that would reverse the offshoring incentives in the Republican tax bill, but also a litmus test of lawmakers’ real priorities. As companies such as AT&T and Wells Fargo keep demonstrating, corporate America will keep siding with wealthy shareholders at the expense of fair treatment of their workers unless our elected officials step in. These practices, including offshoring, won’t just end on their own. We thank Rep. Doggett, Senator Whitehouse, and their numerous co-sponsors for introducing this important legislation and for fighting for a fairer economy that works for all of us.”
To see why legislation such as the “No Tax Breaks for Outsourcing Act” is needed, look at the practices of companies such as Wells Fargo and AT&T:
- AT&T promised that it would devote $1 billion of its savings from the Republican tax bill to create “7,000 good jobs for the middle-class.” Instead, AT&T has continued to outsource jobs to low-wage overseas contractors and has eliminated nearly 12,000 American jobs since the tax cut passed. This continued offshoring and cutting of jobs has persisted despite the fact that AT&T reported net profits of $19.4 billion in 2018.
- Wells Fargo has been among the most aggressive offshoring companies in recent years, engaging in multiple rounds of domestic call center layoffs in multiple states and announcing plans for future layoffs of up to nearly 30,000 workers in the coming three years. As Deon Roberts of the Charlotte Observer reported in a December 2018 article titled, “Wells Fargo shifts many jobs overseas following layoffs in the U.S., documents show,” the company “has laid off hundreds of U.S. employees during the past year as it pushed many of their jobs overseas,” according to U.S. Department of Labor records ( See an exchange on the subject between Wells Fargo CEO Tim Sloan and Rep. Cindy Axne from yesterday’s House Financial Services committee hearing here). This despite the fact that Wells Fargo is among the biggest beneficiaries of the “Tax Cuts and Jobs Act" and despite explicit calls from lawmakers asking the bank to reinvest in American workers. Instead, Wells Fargo has engaged in multiple rounds of stock buybacks, with more than $40.6 billion in buybacks issued since the tax law passed.
In a joint op-ed published in The Hill newspaper last July, titled, “ The GOP tax bill rewards offshoring – here’s what we can do to stop it,” Rep. Doggett and CWA President Chris Shelton summarized why the “No Tax Breaks for Offshoring Act” is so important:
“Our tax code should reward the creation of good jobs here in the U.S., rather than giving corporations breaks for killing American jobs … Talking tax can make folks’ eyes glaze over, but it’s time we all took a clear-eyed view at how the GOP tax bill will not just reward big companies but also hurt working families and communities by incentivizing more offshoring.”