Reproduced with permission from Daily Tax Report, No. 57, pp. J-1 - J-2 (March 25, 2004). Copyright 2004 by The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com
In their "Viewpoint" article published in the March 22 Daily Tax Report ("Current International Tax Rules Provide Incentives for Moving Jobs Offshore,") Congressman Charles Rangel (D-N.Y.) and John Buckley contend that the current U.S. international tax rules encourage the "outsourcing" of jobs by U.S.-controlled corporate groups.
Although to some extent the U.S. international tax rules might encourage outsourcing, it is obvious that, even without the rules, the incentive to outsource will still be pretty good if the wages in the United States are $10/hour and the wages in country X are 30 cents/hour.