Expansion Management

Can Tax Credits Bring Jobs Back to the U.S.?

July 17, 2012

A vote is expected this week on the Bill 2884 -- Bring Jobs Home Act.

Introduced May 8th and sponsored by Sen. Debbie Ann Stabenow, the bill is offering businesses some tax incentives in order to encourage them to bring jobs back from outside the U.S.

The provisions will:

(1) grant business taxpayers a tax credit for up to 20% of insourcing expenses incurred for eliminating a business located outside the United States and relocating it within the United States

(2) deny a tax deduction for outsourcing expenses incurred in relocating a U.S. business outside the United States. Requires an increase in the taxpayer's employment of full-time employees in the United States in order to claim the tax credit for insourcing expenses.

While it might work and might pass, it is the overall economic business analysis that drive companies to bring jobs back to the U.S.

Here is a case in point. In speaking with a large manufacturing company who had moved some operations from overseas back to the U.S., they pointed out to me that this was done based on "sound economic analysis." The politics of being the "good guys" for bringing jobs back wasn't really a factor. While it looked good and the company got good press, I was told in very clear terms it was in the long-term economic benefit of the company to bring back jobs to a factory that was very efficient and would positively affect the overall profitability of the company.

Would this company be swayed by tax credits? Perhaps, but I wouldn't put money on it.

About the Author

Adrienne Selko Blog | Senior Editor

Focus: Expansion Management & the Biotech & Life Sciences Industries

Email: [email protected]

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Senior Editor Adrienne Selko manages IndustryWeek’s Expansion Management, delivering ideas and information about how successful manufacturers leverage location to gain competitive advantage. She explores the strategies behind why companies located their headquarters, research institutes, factories, warehouse and distribution centers and other facilities where they did, and how they benefit from the decision.

Adrienne is also the editorial coordinator of the IndustryWeek Expansion Management Roundtable events, which unites economic development professionals to network and discuss the latest trends in site location.

As well, Adrienne tells the stories of successful companies in the biotechnology and life sciences industries.

In the past, Adrienne has managed IndustryWeek’s award-winning website, overseeing eNewletters, webinars, and contributed content. Before joining the staff, Adrienne was managing editor of corporate publications at a large regional financial institution. She also ran a public relations and marketing company that published a best-selling healthcare book.

Adrienne received a bachelor’s of business administration from the University of Michigan and is especially interested in wellness and natural health.