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[A story reprinted from a well-known business daily]

U.S. Tax Code Provisions
Encourage Offshore Jobs

As if U.S. workers didn’t have enough going against them. Turns out there really are provisions in the tax code that seem to encourage sending jobs offshore.

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The tax code is written in a way that allows companies not to pay the full 35% U.S. corporate tax rate on foreign income when that money remains invested overseas.

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“Brilliant,” you say, “a U.S. corporate tax cut will end the incentive to go abroad.”

Not so fast. As the biggest and best economy in the world, the U.S. is a price maker. We set the standard. A U.S. tax cut might only ignite an international game of tax chicken where all the Lowtaxistans cut their rates below our new, lower rate.

Of course, the revenue will have to be made up elsewhere, which would mean higher individual taxes.

Sending Jobs Overseas Isn’t Always Worth It, U.S. Companies Find (L A. Times — April 11, 2004)

Story
Story formatted for printing (Note — viewing the L.A.Times probably requires free registration.)

Problems with logistics, language and red tape can make outsourcing jobs overseas a money-losing move.

They found them in different places — Oliver in Australia, Kuhns in India — but learned the same lesson about the global economy: For all the hype and hand-wringing about U.S. companies shipping jobs overseas, outsourcing to foreign countries can be a mind-boggling chore that doesn’t always save much money in the end.
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About $35,000 of that was because of the extra work Oliver had asked the vendor to do to get the right level of quality and detail. But the biggest cost, which was not calculated in the vendor’s bill, was the extra time Oliver took to manage the project and the delays caused by the long-distance back-and-forth.

The magazine Fast Company has a weblog. One of its categories is Offshoring.

They running a series of postings on offshoring, called “Offshore Storm.” Each has accumulated some comments.

The first is just a call for inputs. …Have you — or someone you know — lost your job to a worker overseas?

The second is a roundup of several links to other items on the subject: CFO, CNN, Fortune, Tom Peters….

The third brings in some politics and other links.

The fourth links to their cover story on the subject and to a Gardiner study.

More news as it happens….