As a demonstration of his commitment to conquer the tax loopholes that support investment in overseas jobs, President Barack Obama has announced generous tax breaks for companies that provide jobs in the US.
It is very likely that the issue of outsourcing could be a key point that comes up during the November elections. The President has stated that the tax concessions should go to companies that create jobs in the US and not overseas.
Pointing out that the existing tax code provides tax breaks to the tune of millions of dollars to companies that create jobs and profits in other countries, Obama stressed on the fact that one of the main points to be focused on is encouraging companies to increase investment in the United States. This cycle is proving to be disadvantageous to the country, and in order to break it the President proposes to have a more generous and permanent extension of tax credit to companies that are involved in research and innovation inside the US. He expressed his opinion that if the country did have any tax breaks they should be going to companies that created jobs within the nation, not outside.
The President was delivering a speech on economy in the state of Ohio, and had the Governor of Ohio, Ted Strickland at his side. Ironically, Strickland was well known for his support to Indian companies till recently, when after realizing that he was behind in opinion polls, he passed an executive order banning outsourcing. His argument is that outsourcing undermines the economic development of the US and has undesirable business consequences.
The IT sector in India has reacted to these US developments saying that the move is discriminatory, and is akin to a trade barrier. Recently the Indian IT sector was hard hit by the US raising entry visa fees for the H-1B and L1 visa, which was what most IT companies took when they sent their professionals to work on US projects.
The apex body of the IT and ITES industry says it will take up the issue with its US counterparts under the leadership of the Nasscom delegation, which will visit the US later this month. They have also sought governmental support to take up the matter with American authorities.
President Obama says that across America, people agree on the fact that rebuilding the infrastructure of the nation is the way for the country to once again be one of the leading economies of the world. And it is to this precise end that his administration has put together the six-year infrastructure plan that he was proposing. President Obama says this proposal will enable small businesses to upgrade their plants and equipment and encourage large corporations to start putting their profits into the economy. By putting Americans to work, the economy could start picking up, he said. He pointed out that due to the steps that his administration had taken, the economy is showing sure signs of recovery. This financial markets have stabilized and approximately three million Americans who were previously unemployed have a job due to the economic plan that was put in place since he assumed office.