Sponsors
Introduced October 6, 2025 by Bernardo Moreno · Last progress October 6, 2025
The bill raises revenue and creates a dedicated fund for worker retraining by taxing and denying deductions for certain cross‑border outsourcing payments—supporting displaced workers and reducing offshoring incentives—while increasing tax liabilities, compliance costs, penalties risk, and reducing flexibility for firms that rely on offshore services.
Federal government and taxpayers: establishes a new excise tax on certain payments to foreign persons and treats that tax as nondeductible, increasing federal receipts that can fund priorities.
Unemployed workers and state/local governments: creates a dedicated trust funded by the new tax receipts to finance Department of Labor retraining, apprenticeships, and state grants for communities with high job displacement, providing a predictable funding stream for workforce programs.
U.S. workers, taxpayers, and domestic employers: by denying deductions for outsourcing payments and taxing certain cross-border payments, the bill discourages offshoring and may incentivize onshoring, potentially increasing domestic economic activity.
Businesses (especially small businesses and government contractors) and taxpayers: face higher overall tax bills and effective costs because of the new excise tax plus nondeductibility of covered payments, which can squeeze margins and be passed on as higher prices.
Taxpayers, financial institutions, and corporate officers: incur increased compliance, reporting, and administrative burdens (new returns, officer certifications, and identification of 'outsourcing' payments), raising costs and legal exposure.
Taxpayers, state governments, and displaced workers: the dedicated trust is funded by the new tax/penalties and is available without annual appropriation, which shifts costs to those payers, reduces Congressional control/oversight, and risks program funding volatility if receipts fluctuate.
Based on analysis of 4 sections of legislative text.
Imposes an excise tax on certain payments to foreign persons, denies deductions for them, and directs proceeds to a Domestic Workforce Fund for retraining and state grants.
Imposes a new excise tax on certain payments to foreign persons for services and goods tied to outsourcing, denies federal tax deductions for those payments, and requires enhanced reporting and penalties for nonpayment. Directs the tax receipts and related penalties into a newly created Domestic Workforce Fund in the Treasury to pay for Department of Labor workforce development, retraining, apprenticeship programs, industry partnerships, and state grants targeting communities with high job displacement.