United Technologies is not going broke. Last year, it made a profit of $7.6 billion and received over $6 billion in defense contracts. It has also received more than $50 million in corporate welfare from the Export-Import Bank and very generous tax breaks.
In 2014, United Technologies gave its former CEO Louis Chenevert a golden parachute worth over $172 million. Last year, the company’s five highest paid executives made over $50 million. The firm also spent $12 billion to inflate its stock price instead of using that money to invest in new plants and workers.
I call on Mr. Trump to make it clear to the CEO of United Technologies that if his firm wants to receive another defense contract from the taxpayers of this country, it must not move these plants to Mexico.
We need to send a very loud and very clear message to corporate America: the era of outsourcing is over. Instead of offshoring jobs, the time has come for you to start bringing good-paying jobs back to the United States of America.
If United Technologies or any other company wants to keep outsourcing decent-paying American jobs, those companies must pay an outsourcing tax equal to the amount of money it expects to save by moving factories to Mexico or other low-wage countries. They must pay back all of the tax breaks and other corporate welfare they have received from the federal government. And they must not be allowed to reward their executives with stock options, bonuses or golden parachutes for outsourcing jobs to low wage countries.
I will soon be introducing legislation to make sure that Donald Trump keeps his promise to prevent the outsourcing of American jobs. For the sake of American workers, this is a promise that cannot and must not be broken.”
Summary of the Outsourcing Prevention Act
In February, Carrier and UTEC announced that it would be closing two plants in Indianapolis and Huntington, Indiana shipping 2,100 jobs to Monterrey, Mexico, where workers are paid just $3 an hour. Both of these plants are owned by United Technologies. This legislation will provide a comprehensive solution to address this problem. United Technologies is not an outlier; it is representative of how so many multi-national corporations are taking advantage of our rigged economic system to pad their profits while hurting American workers. President-elect Trump made a promise during the campaign that he would prevent all of these jobs from being shipped overseas. The Outsourcing Prevention Act would make sure that Donald Trump keeps this promise by:
1. Preventing companies that outsource jobs from receiving federal contracts, tax breaks, grants or loans.
Last year, United Technologies received over $6 billion in federal contracts, making it the seventh largest recipient of federal contract funds. Over the past 15 years, this Fortune 500 company has used loopholes in the tax code to shelter more than two-thirds of its $38 billion in profits from federal taxation. It has also received over $50 million in corporate welfare from the Export-Import Bank. Under this legislation, companies would be barred from receiving future contracts, tax breaks, grants or loans from the federal government if they have announced plans to outsource more than 50 jobs overseas.
2. Clawing back federal benefits from companies that outsource jobs have received over the last decade.
This legislation would require all companies that outsource more than 50 jobs in a given year to pay back all federal tax breaks, grants and loans they have received from the federal government over the last decade.
3. Establishing an outsourcing tax on companies that move U.S. jobs offshore.
This legislation would impose a tax on all companies that outsource jobs. The tax would be equal to the amount of savings achieved by outsourcing jobs or 35 percent of its profits, whichever is higher. United Technologies estimated that it would save $65 million a year by moving its jobs in Indiana to Mexico. Under this legislation, the company would be required to pay a tax of no less than $65 million a year.
4. Prohibiting executives from profiting off of the outsourcing of U.S. jobs.
This legislation would prohibit companies that offshore jobs from enriching executives through golden parachutes, stock options, bonuses, or other forms of compensation by imposing stiff tax penalties on this compensation. In addition, companies that outsource jobs overseas would be prevented from buying back its own stock. In 2014, United Technologies gave its former CEO a golden parachute worth over $172 million. Last year, the company’s five highest paid executives made over $50 million. The firm also spent $12 billion to inflate its stock price instead of using that money to invest in new plants and workers.
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