What is the HIRE Act?
The HIRE Act introduces a new 25% tax on outsourcing payments—defined as any payment made by a U.S. company or taxpayer to a foreign person whose services benefit consumers in the United States.
Key provisions of the HIRE Act include:
- 25% Outsourcing Tax: Applied to payments made to foreign workers or firms serving U.S. consumers.
- Domestic Workforce Fund: Revenue from the tax will be directed to a new fund supporting apprenticeship programs and workforce development in the U.S.
- No Tax Deductions for Outsourcing: Companies will be prohibited from deducting outsourcing-related payments from their taxes.
Bernie Moreno’s Statement
Senator Moreno emphasized the bill's focus on protecting American workers and revitalizing domestic job opportunities.
“While college grads in America struggle to find work, globalist politicians and C-suite executives have spent decades shipping good-paying jobs overseas in pursuit of slave wages and immense profits — those days are over,” Moreno said.
“If companies want to hire foreign workers instead of Americans, my bill will hit them where it hurts: their pocketbooks.”
How Will the HIRE Act Impact India?
If passed in its current form, the HIRE Act could significantly affect India’s outsourcing industry, particularly in IT services, software development, and business process outsourcing (BPO). With a 25% tax making offshore operations more expensive, U.S. companies may be forced to bring jobs back onshore to avoid penalties.
India is a key destination for U.S. outsourcing due to its large skilled workforce and cost efficiency. A tax of this scale could threaten billions in service exports and potentially force Indian firms to restructure contracts or lose business.
However, the bill is still in the proposal stage and may face opposition or revisions before becoming law.