Saving American jobs from going overseas was the cornerstone of candidate Trump’s populist campaign for president.

“We’re just shipping company after company after company is leaving this country and leaving jobs behind,” Trump said in March of 2016. “And I’m going to get it stopped.”

In October of 2017, while the GOP tax bill was in its early stages, Trump announced he was looking into legislation that would actively punish companies that moved overseas. He told Forbes magazine that U.S. companies that move their operations to another country would “get penalized severely.”

An overlooked part of the Congressional Budget Office report released last week, however, suggests corporations may be incentivized under the legislation to offshore “tangible assets” like factories and offices.


“By locating more tangible assets abroad, a corporation is able to reduce the amount of foreign income that is categorized as GILTI (Global Intangible Low Taxed Income),” the report said. “Similarly, by locating fewer tangible assets in the United States, a corporation can increase the amount of U.S. income that can be deducted as FDII (Foreign-Derived Intangible Income). Together, the provisions may increase corporations’ incentive to locate tangible assets abroad.”

The CBO findings echo analysis from non-partisan think tanks like the Institute on Taxation and Economic Policy, which found that the Republican Tax Cuts and Jobs Act would make offshore tax dodging even worse than it was before. The Center on Budget and Policy Priorities similarly found that the plan is “likely to lead to more outsourcing of U.S. jobs and a larger trade deficit” due to its tax

cuts for overseas profits.

Under the previous tax code, multinational corporations were encouraged to artificially shift their profits, investments, or even jobs offshore in order to avoid paying taxes. ITEP notes that “real tax reform would have put an end to tax avoidance and the tax incentives for offshoring.”

The Tax Cuts and Jobs Act was not real tax reform.

“The new law gives companies an annual deduction on their offshore earnings worth 10 percent of their offshore tangible assets (such as factories). This means that companies with $100 million worth of tangible assets offshore would pay nothing in U.S. taxes on the first $10 million worth of profits they earn,” according to the ITEP report. “Because the size of the deduction depends on the amount invested offshore, this new break creates a unique incentive for companies to move real investments offshore to boost the size of their deduction.”


Additionally, the GOP tax bill allows companies to deduct half of their offshore income earned above 10 percent of the company’s tangible assets.

In short, both of these tax breaks will result in offshore earnings from companies being taxed at half the rate of domestic earnings, with many companies paying nothing in U.S. taxes on these earnings.

One of the biggest beneficiaries of this offshore tax break also happens to be among the biggest beneficiaries of the tax bill: big banks.

According to the most recent quarterly reports, Bank of America’s first quarter profits rose by 30 percent thanks to the new tax bill. Three major U.S. banks, JP Morgan Chase, Wells Fargo, and CitiGroup, appeared to have saved roughly $1.6 billion in the first quarter.

Banks could increase their savings even more by continuing to quietly offshore jobs, something they have already been doing for years.


A March 2018 report by the Communication Workers of America outlined how the banking industry is one of the leading practitioners when it comes to offshoring jobs to low wage countries, particularly call center and customer service jobs.

The number of support staff in India for four U.S. investment banks, Morgan Stanley, JPMorgan Chase, Bank of America and Citi, rose 50 percent between 2008 and 2015 to more than 12,500.

Despite offshoring practices, and the massive financial windfall from the tax bill, big banks are in no hurry to return those jobs from overseas.

Wells Fargo CEO Tim Sloan said he plans to put most of the bank’s new profits into the pockets of investors, rather than re-invest in company workers who have been harmed by Wells Fargo’s business practices and its continued offshoring of American call center jobs.

There are, however, proposed legislative fixes to end the practice of offshoring jobs.

“No Tax Breaks for Outsourcing Act” was introduced by in the House of Representative by Congressman Lloyd Doggett (D-TX) and Congresswoman Rosa DeLauro (D-CT) in the House and Senator Sheldon Whitehouse (D-RI) in the Senate. The legislation is aimed at reversing the offshore incentives in the GOP tax bill.

Senators Bob Casey (D-PA) and Sherrod Brown (D-OH) co-sponsored legislation that would make U.S. companies that send call center jobs offshore ineligible for certain taxpayer funded grants and loans. The bill would also give U.S. customers a right to know where they are calling and the ability to be transferred to a U.S.-based location.

With a Republican-controlled White House and Congress hell-bent on protecting big banks, however, it seems unlikely these bills will come up for a vote in the near future, leaving huge multinational corporations to continue reaping the benefits of a flawed tax code designed with the 1 percent in mind.