Is Barack Obama Anti-Outsourcing?
Filed in archive Opinions & Insights by Gary Zeiss, Esq. on June 30, 2008
A number of authors in the Indian press have asserted that Barack Obama is anti-outsourcing. However, there are mixed signals coming from the Obama camp.
In speeches, Obama has suggested that he will readjust the tax code to offer more tax incentives to companies who do not offshore, but he has also acknowledged outsourcing's inevitability, saying that "[r]evolutions in communication and technology have sent jobs wherever there's an internet connection; that have forced children in Raleigh
and Boston to compete for those jobs with children in Bangalore and Beijing."
Therefore, it is probably somewhat simplistic to say that Obama is "anti-outsourcing." He may wish to incentivize different behavior, but there is little evidence that he will seek to regulate or otherwise limit outsourcing.
There are many other factors that affect the value of outsourcing. Currency fluctuation is, as we know, a major one. It could, therefore, be argued that the weak-dollar policies of the current administration are inherently anti-outsourcing, as well.
Ultimately, I expect that US tax policy and US tax breaks, one way or the other, will not make too much difference - nor will it affect the value proposition of already-successful outsourcing efforts. Marginal outsourcings may be affected, but those are already under significant pressure due to exchange fluctuations and the weakening US labor market.
For reference, see the following articles:
February 27, 2008 - Rediff
June 11, 2008 - Rediff
June 28, 2008 - Express India
In speeches, Obama has suggested that he will readjust the tax code to offer more tax incentives to companies who do not offshore, but he has also acknowledged outsourcing's inevitability, saying that "[r]evolutions in communication and technology have sent jobs wherever there's an internet connection; that have forced children in Raleigh
and Boston to compete for those jobs with children in Bangalore and Beijing."Therefore, it is probably somewhat simplistic to say that Obama is "anti-outsourcing." He may wish to incentivize different behavior, but there is little evidence that he will seek to regulate or otherwise limit outsourcing.
There are many other factors that affect the value of outsourcing. Currency fluctuation is, as we know, a major one. It could, therefore, be argued that the weak-dollar policies of the current administration are inherently anti-outsourcing, as well.
Ultimately, I expect that US tax policy and US tax breaks, one way or the other, will not make too much difference - nor will it affect the value proposition of already-successful outsourcing efforts. Marginal outsourcings may be affected, but those are already under significant pressure due to exchange fluctuations and the weakening US labor market.
For reference, see the following articles:
February 27, 2008 - Rediff
June 11, 2008 - Rediff
June 28, 2008 - Express India
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