Offshoring: Good for Business, Bad for America

Offshoring is unpatriotic and something needs to be done about it-like taxing the value of software developed and services provided overseas as the imports they are, says columnist David Coursey.

Think about the offshoring issue for too long, with too open a mind, and I promise youll go nuts. This in not a simple issue, no matter how much the bumper stickers, politicians and some corporate CEOs would like it to be.

The nationalistic American viewpoint seems to be that anything—NAFTA, guest worker visas, offshoring—that takes jobs away from native-born U.S. citizens is at the very least unpatriotic and may border on subversion.

The unfettered capitalist view is that free markets work out best for everyone, at least in the end. The corporate ruling class looks at offshoring as a less-expensive way to do business, resulting in some combination of lower costs to customers and higher profits to shareholders.

There are also people who are anti-globalization for any number of reasons and want to resign from global humanity. On the other hand, there are people who look at globalization as a means of sharing the wealth with poor nations. They call that economic justice.

As I said, in this issue you can find pretty much anything you want.

What bugs me about offshoring is how it allows greedy, short-term business interests to have their cake and eat it, too. Having starved the American public education system, these rich fat cats now want to export jobs to "better trained" workers overseas. Sometimes its just less-expensive workers overseas, but often there is at least a hint that there arent enough Americans qualified for the jobs, regardless of price.


For more insights from David Coursey, check out his Weblog.

If thats the case, perhaps we should require American businesses to offer, say, 75 percent of the prevailing American wage when hiring overseas. We could send the income and Social Security taxes paid by that worker, collected at U.S. rates, to their home government to support local social programs. The remaining 25 percent would go to the U.S. government to support unemployment and educational programs for Americans.

That, of course, is fantasy. But heres something that isnt: Tax the value of software developed and services provided overseas as the imports they are.

For example, if the testing for Windows Longhorn is done in China, lets figure out what the value of that work is to the total project and then slap an import tax on every copy of Longhorn that Microsoft sells.

This would be easier on coding projects, where you might determine that 25 percent of a program was written overseas, making 25 percent of that products revenue subject to the import duty.

This tax wouldnt be collected just from software publishers but from corporate IT departments as well. The goal would be to make sending U.S. jobs overseas just a little bit more expensive. OK, maybe a lot more expensive.

Next page: The long-term cost to America.