US President Barack Obama moves against out-sourcing
In his first address to the joint session of the US Congress, President Barack Obama said that he decided to restore a sense of fairness and balance to the US Tax Code, which means that American firms will no longer get any tax cuts if they move their jobs to anywhere else in the world.
Around 1,000 American firms, which have moved their jobs abroad, are expected to be affected by the proposed move to do away with a particular provision of the country’s tax code that allows them to pay lower taxes for profits repatriated from foreign shores.
According to various estimates by economists, corporate tax code may account for up to 3 million jobs abroad. In 2004, the US Congress had allowed a one-year repatriation tax holiday which reduced the 35% tax rate on foreign earnings of American companies to just 5.25%.