Sen. Schumer Proposes Tax on Outsourced Call Centers

June 1, 2010

Senator Chuck Schumer (D-NY) has proposed a federal excise tax on customer service operations that use non-U.S. call centers. The AP article describes how it would work:

The [tax] would be 25 cents for calls transferred to foreign countries. There would be no [tax] for a domestic call center. Companies would have to report quarterly their total customer service calls received and the number relayed overseas.

"If we want to put a stop to the outsourcing of American jobs, then we need to provide incentives for American companies to keep American jobs here," Schumer said last week. The New York Democrat said the excise tax would "also provide a reason for companies that have already outsourced jobs to bring them back."

In a survey of American economists in 2006, Robert Whaples found nearly 90 percent agreed the U.S. should eliminate remaining protectionist tariffs and trade barriers, like the new one Schumer is proposing, that there are lower costs and a net gain from free trade. Most also agreed the U.S. should not restrict American employers from outsourcing work to foreign countries.[…]

The measure would also require telling U.S. customers that the call is being transferred and to which country.

Excise taxes are sometimes imposed on "bad" behaviors that politicians want to discourage, but there can be differences of opinion on what's good and bad.

(Hat tip: Hit & Run)


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