US Senator Sheldon Whitehouse (D-RI) and Congressman Lloyd Doggett (D-TX) reintroduced the No Tax Breaks for Outsourcing Act on 5 February 2025.

First introduced in 2018, this legislation would end tax incentives created during the first Trump administration for big multinational corporations to ship jobs and profits overseas. The No Tax Breaks for Outsourcing Act would level the playing field for American companies by requiring multinational corporations to pay the same tax rate on profits earned abroad as they do in the United States.

“Trump’s haphazard tariffs on Mexican and Canadian goods will raise costs for Rhode Islanders already dealing with high prices for groceries, housing, and cars, to fill up government coffers for more harmful tax breaks for billionaires and megacorporations,” said Senator Whitehouse.  “We have to reverse Trump’s ‘America Last’ policies that are incentivising companies to send American jobs and profits overseas.”

The No Tax Breaks for Outsourcing Act would repeal offshoring incentives by:

• Equalising the tax rate on profits earned abroad to the tax rate on profits earned here at home.  The bill would end the preferential tax rate for offshore profits by eliminating the deductions for “global intangible low-tax income (GILTI)” and “foreign-derived intangible income” and applying GILTI on a per-country basis.
• Repealing the 10% tax exemption on profits earned from certain investments made overseas.  In addition to the half-off tax rate on profits earned abroad, the Trump tax law exempts from tax a 10% return on tangible investments made overseas, like plants and equipment.  The legislation would eliminate the zero-tax rate on certain investments made overseas.
• Treating “foreign” corporations that are managed and controlled in the U.S. as domestic corporations.  Ugland House in the Cayman Islands is the five-story legal home of over 18,000 companies – many of them actually American companies in disguise.  The bill would treat corporations worth $50 million or more and managed and controlled within the U.S. as the American entities they in fact are, and subject them to the same tax as other U.S. taxpayers.
• Cracking down on inversions by tightening the definition of an expatriated entity.  This provision would discourage corporations from renouncing their U.S. citizenship.  It would deem certain mergers between a U.S. company and a smaller foreign firm to be a U.S. taxpayer, no matter where in the world the new company claims to be headquartered. Specifically, the combined company would continue to be treated as a domestic corporation if the historic shareholders of the U.S. company own more than 50% of the new entity.
• Combating earnings stripping by restricting the deduction for interest expense for multinational enterprises with excess domestic indebtedness.  Some multinational groups reduce or eliminate their U.S. tax bills by concentrating their worldwide debt and the resulting interest deductions in U.S. subsidiaries.  The bill would disallow interest deduction for U.S. subsidiaries of a multinational corporation where a disproportionate share of the worldwide group’s debt is located in the U.S. entity, a tactic commonly known as “earnings stripping.”
• Eliminating tax breaks for foreign oil and gas extraction income.  Oil and gas extraction income earned abroad gets an even further break on the already half-off rate other industries pay on offshore profits.