> provided that employer pays local taxes in those countries for those roles.
This was phrased a bit confusingly, at least to me. Can you explain?
It’s a double taxation thing. If the employer is paying taxes abroad (as in, a net positive payment to that country’s tax collection agency), then we should absolutely give them the IRS break on labor here; if they’re not paying taxes abroad, then they’re taxed on said labor here.
The idea is to reduce offshoring as a means of dodging tax liability for multinational firms. If they want the tax cut here, they gotta pay up everywhere else they do business.
> if they’re not paying taxes abroad, then they’re taxed on said labor here.
Ah I see. You mean if the effective tax rate for a worker in some country is 20% but the effective rate in the US would have been 30% they have to pay the difference in the US? Interesting idea but if the salaries overseas are much lower, how much revenue will that extra 10% raise anyway? More likely the worker would fall into a lower US tax bracket.
I wouldn't mind seeing something like that for corporate profits actually.