Dorgan (D – North Dakota) is the Senator who introduced legislation, S. 260, to shut down a tax loophole that rewards U.S. companies that move U.S. manufacturing  jobs overseas. The legislation would close the loophole that allows U.S. multinational companies to defer paying income taxes on profits they make from the U.S. sale of the products manufactured in foreign factories, until those profits are returned to the United States, if ever.  Manufacturers who remain in the United States receive no similar subsidy.

While passage of this law has obvious benefits for the U.S., it has been something Dorgan has been trying to get through for ten years.

    “You may not believe it, but when a U.S. company closes down a U.S. manufacturing plant fires its American workers and moves those good-paying jobs to China or other locations abroad, U.S. tax law actually rewards those companies with a large tax break called deferral. The tax code allows these firms to defer paying any U.S. income taxes on the earnings from those new foreign-manufactured products until those profits are returned, if ever, to this country. If a company making the same product decides to stay in this country, it is required to pay immediate U.S. taxes on the profits it earns here.”

– Senator Byron Dorgan

Examples of products that used to be manufactured in America but now are being made in China or Mexico or other countries? How .about Nabisco Fig Newtons, which are now made by 50¢ per hour workers in Mexico. Or Huffy Bicycles, formerly made in Ohio, now made in China by 33¢ per hour workers. Or Etch-a-Sketch. Or La-Z-Boy furniture. Or Fruit of the Loom underwear. The list goes on and on.

And we support the outsourcing of products in two ways. When we go to Wal-Mart or K-Mart (companies that demand our products at the lowest prices) and purchase them we give tacit support to the throwing away of American jobs. But that isn’t the only way we support major corporations who screw Americans out of their jobs…we give them tax breaks for doing it! These are called “Deferrals” and they are totally legal.

We have lost so many jobs, especially in the 8 Bush years when close to 750,000 jobs a month disappeared as work making everything from solar panels to Radio Flyer Wagons went to China, Mexico, and other countries where child labor at 50¢ per hour for 12 hours a day, 7 days a week, can create products for minimum corporate expense. It will be extremely difficult to bring jobs back, but without changing the law so that tax breaks go to those who remain in America to carry out manufacturing and not to those who rob us of jobs and send the production overseas.

The Senate is debating the issue today. Needless to say, no Republicans are stepping up to the plate yet and Republican leader McConnell (R-Kentucky) has stated that no problem exists. The President signed legislation today to make $50 Billion Dollars available to banks for loans to small businesses. Hopefully, this will create employment and perhaps see new products manufactured in our country.

One could hope.

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