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Congress·In Committee·about 1 year ago

Congress Proposes New Rules to Eliminate Tax Breaks for U.S. Companies Moving Operations Abroad

Also known as: No Tax Breaks for Outsourcing Act

Legislative Progress

✓ Filed
Review
House
Senate
President

Impact Analysis

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Key Points

  • This bill aims to stop U.S. companies from moving jobs and profits to other countries just to save on taxes. Currently, many large corporations pay a much lower tax rate on money earned abroad than they do on money earned right here in the United States.
  • The policy would require companies to pay the full U.S. tax rate on their foreign earnings. It also changes the rules so companies can no longer use taxes paid in high-tax countries to cancel out the taxes they owe on profits hidden in offshore tax havens.
  • It targets a practice called 'inversion,' where a U.S. company merges with a small foreign business to claim it is no longer American. Under this bill, if a company is still managed and controlled by people in the U.S., it must continue to pay U.S. taxes like any other domestic business.
  • The bill limits how much interest a company can subtract from its taxes if it is part of a massive international group. This prevents companies from shifting their debt to U.S. branches as a trick to lower their taxable income at home.
  • If passed, most of these new tax rules would begin for the 2025 tax year. The overall goal is to make it just as expensive to operate in a foreign country as it is to keep factories, offices, and jobs in the United States.
TaxesEconomy FinanceLabor Employment

Milestones

2 milestones2 actions
Feb 5, 2025House

Referred to the House Committee on Ways and Means.

Feb 5, 2025

Introduced in House

Related News

2 articles
U.S. News & World Report·8 months ago

Whitehouse Spotlights Provision in Trump's 'Beautiful-for-Billionaires' Bill that Will Ship American Jobs Overseas

Senator Sheldon Whitehouse highlights the reintroduction of the No Tax Breaks for Outsourcing Act as a necessary counter to Republican tax proposals. He argues the act would repeal 2017 offshoring incentives and ensure multinationals pay the same rate on foreign profits as domestic businesses.

C~
Economic Policy Institute·9 months ago

The U.S. approach to globalization has gone from bad to worse under Trump: How to construct a progressive policy agenda instead

Policy experts suggest building on the No Tax Breaks for Outsourcing Act (2025) to fully tax foreign income of U.S. multinationals. The act would eliminate tax-free returns on foreign tangible assets and subsidies for excess profits from exporting, ensuring taxes depend on income level, not type.

L+

Source Information

Document Type

Congressional Bill

Official Title

No Tax Breaks for Outsourcing Act

Bill NumberHR 995
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Cosponsors

(134)
D: 134

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.