One thing is for sure, Senator Chuck Schumer played his cards right when he introduced a new tax during one of the busiest legislative weeks of the 111th Congress. After completing financial reform and moving into debate on an expensive emergency supplemental, who could have noticed anything else? Well, we did. The Schumer bill would hit companies that transfer domestic customer service calls to foreign call centers with a $0.25 excise tax for each call.
Mind you, this legislation is by no means as atrocious as some we have seen in recent months, but it is still an unwarranted levy on businesses that will result in higher costs for consumers. Schumer says his goal is to curb outsourcing and incentivize American companies to keep jobs here. BUT, you can't just deny the global marketplace – it exists! If Congress continues to burden companies with increased financial burdens, it's easy enough for them to pick up and move their business to foreign nations with more of a pro-growth tax environment.
This is one of the key arguments for a FairTax. By doing away with payroll taxes, companies could afford to hire more employees and outsourcing would look less attractive. We can't threaten businesses with increased financial burdens and expect them to respond positively. Instead, we should seek fundamental reform to our Tax Code to get our economy back on track and ensure competitiveness both here and abroad.
Go here for more information on Schumer's legislation.