I have a policy question.

[TheCoxwain]

How is the tax loop hole for outsourcing going to be closed?

Let me put it this way: -- say Ford wants to move the Division for making crankshafts to Mexico in which case they will hit with a tax penalty. Cant they simply circumvent it by "Buying" crankshafts from a company in Mexico instead?


I am just trying to understand how the new policy is supposed to work?

[Eric J in MN]

1. I think the question is whether they should be able to deduct the cost of relocating.

If a company wants to shut down a US factory which makes a part and buy that part from Mexico, then it could still deduct the cost of buying that part.

[TheCoxwain]

2. But how will the penalties work? Will there be a different tax rate for companies that outsource?

Simply put :I cant think of any scenario where a very simple workaround does not exist. Unless we get into protectionism.

So I cant conceive of how this policy proposal of punishing companies that outsource will work.

[rucky]

3. More emphasis on the tax incentives for keeping jobs here.

not sure if the loophole thing's been fleshed out.