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India’s $18 billion financial services outsourcing industry could grow into a $250 billion market, as we reported on our website in late April.
And a lot of that growth is coming at the expense of the United States.
It’s all about the money. And why not? Isn’t it cash that allows businesses to grow and accomplish their goals?
But growing a business solely within the United States is becoming increasingly difficult. In an effort to lower costs for a business, more and more companies are turning to outsourcing as a means to save money.
This would be fantastic if the United States didn’t have an unemployment rate hovering around 10 percent. In a recent report on our website, it was revealed that U.S. multinational companies cut 2.9 million jobs from the United States in the last decade.
Over that same period, the same multinational companies increased their outsourcing workforce by 2.4 million.
Opening up more domestic jobs could directly lead the United States out of its current economic funk. One such way to keep U.S. companies on their home soil (and even attract foreign investors) would be to lower the corporate tax rate inside the U.S.
Right now, the United States’ corporate tax rate is sitting at 39.2 percent, the second highest corporate income tax rate in the world. Japan has the highest right now, but the nation is seriously considering lowering its corporate tax rate to undercut the United States.
The risk in lowering the corporate tax rate is simple, as lower corporate taxes would put a government that’s already in over $14 trillion in debt in an even more precarious position.
The hope would be that lowering the corporate tax rate would attract U.S. multinational businesses to add domestic jobs, which would allow the United States’ government to make up the difference by taxing the income on those new jobs.
Lowering the corporate tax would be a huge risk, but in times of desperation, smart risks need to be taken to find that game-changer that can turn everything around.
The global outsourcing market is growing at an exponential rate, and U.S. jobs are being outsourced and lost at a similarly alarming rate. That’s why our message to the American government and U.S. multinational companies is the same:
Handle the outsourcing market with care.
