The Anti-Outsourcing and Job Retention Act of 2025

Economy
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Preamble:

To promote job retention within the United States and discourage the outsourcing of American jobs to other countries, this legislation imposes a tax on companies outsourcing a significant portion of their workforce while providing tax incentives for companies that maintain their entire workforce domestically.

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Section 1: Definitions

  1. “Outsourcing” refers to the practice of relocating jobs to a foreign country.

  2. “Workforce” includes all full-time, part-time, and contract employees directly employed by the company.

  3. “Company” refers to any corporation, partnership, or sole proprietorship operating within the United States.

  4. “Outsourced Workforce Percentage” is calculated as the number of employees working outside the United States divided by the total number of employees, expressed as a percentage.

Section 2: Outsourcing Tax Provisions*

  1. Companies that outsource more than 5% of their workforce to other countries will be subject to a 75% tax on the value of the outsourced labor.

  2. The value of the outsourced labor is calculated based on the total compensation (wages, salaries, and benefits) paid to outsourced employees during the fiscal year.

  3. The tax will be levied annually and is due on the same date as the company’s federal tax return.

Section 3: Tax Break for Domestic Employment

  1. Companies that maintain 100% of their workforce within the United States are eligible for a tax break.

  2. The tax break will be a reduction of 10% on the company’s federal corporate income tax rate.

  3. Eligibility for the tax break will be assessed annually based on the company’s workforce data for the entire fiscal year.

  4. To qualify, companies must submit a certification of compliance to the Internal Revenue Service (IRS) along with their annual tax return.

Section 4: Exemptions and Special Provisions

  1. Exemptions:

  • Certain industries facing unique global competition or national security considerations may be exempt from the outsourcing tax, subject to review by the Department of Commerce.

  • Startups with less than 50 employees are exempt from the outsourcing tax for the first three years of operation.

  1. Incentives for Reshoring:
  • Companies that bring outsourced jobs back to the United States within a two-year period may be eligible for additional tax credits up to 5% of the total payroll for reshored jobs.

Section 5: Implementation and Enforcement

  1. The Internal Revenue Service (IRS) will oversee the enforcement of the tax provisions and ensure compliance.

  2. Companies must provide detailed reports on their workforce composition, including the location of all employees, as part of their annual tax filings.

  3. The IRS will issue regulations within 180 days of the enactment of this Act to guide implementation and compliance.

Section 6: Monitoring and Review**

  1. The Department of Labor will conduct annual reviews of the impact of this Act on employment and outsourcing trends.

  2. A report will be submitted to Congress every two years, detailing the effectiveness of the Act and providing recommendations for any necessary adjustments.

Section 7: Effective Date

This Act shall take effect on April 1, 2025.

Section 8: Severability

If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act and the application of such provision to other persons or circumstances shall not be affected thereby.

Conclusion

The Anti-Outsourcing and Job Retention Act of 2025 aims to incentivize companies to retain and create jobs within the United States while discouraging the practice of outsourcing jobs to other countries. By imposing a tax on significant outsourcing and offering tax breaks for maintaining a domestic workforce, this legislation seeks to strengthen the U.S. economy and ensure better job security for American workers.

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Isn’t that exactly what a tariff is?

Tariff

A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and policy that taxes foreign products to encourage or safeguard domestic industry.

You outsource your widget manufacturing to Botswana, and when you try to import it to this country, we impose a tariff (tax) on it.

And you want to give the IRS more authority?