{"id":1666,"date":"2010-06-04T17:39:00","date_gmt":"2010-06-04T17:39:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/schumer-060410\/"},"modified":"2010-06-04T17:39:00","modified_gmt":"2010-06-04T17:39:00","slug":"schumer-060410","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/schumer-060410\/","title":{"rendered":"Why Senator Schumer’s proposed call center tax is detrimental and unproductive for the US economy"},"content":{"rendered":"
\"\"<\/p>\n

It can't be… surely not… is that… is that… a proactive bill that encourages businesses to invest in the US?<\/p>\n<\/div>\n

When is comes to “bringing US jobs back onshore”, we repeatedly seem to get all sorts of legislation that, quite simply, is focused on\u00a0restricting our busineses’ competitiveness, when we should be looking at helping them invest in new talent and entrepreneurship, rather than penalizing them for\u00a0trying to be competitive\u00a0in today’s global environment.\u00a0(Read our excellent discussion from last year:\u00a0 <\/em>Who\u2019s looking out for the US business these days?<\/em><\/a>)<\/em><\/strong><\/p>\n

Senator Charles\u00a0Schumer’s proposed new legislation<\/a>, if\u00a0passed,\u00a0would tax U.S. companies\u00a0that transfer domestic calls (at $.0.25 per call) to foreign call centers and require consumers be informed when their call is transferred outside the U.S.\u00a0 I assume by now most of you know the details of this, so let’s consider what good this does US businesses and the US economy:<\/p>\n

1) The cost differential is not enough to warrant routing call center work back onshore.<\/strong>\u00a0\u00a0 If\u00a0the offshore\u00a0call center is charging\u00a0$18.00 per hour for each agent,\u00a0who takes, on average,\u00a020 calls per hour, this only knocks their costs up to $23.00 per agent\/hour.\u00a0 A US\u00a0domestic call center would likely charge clients\u00a0$30 per agent\/hour (or higher), so the cost differential still doesn’t warrant pulling the work back.\u00a0 Conversely, offshore providers are more nimble with price flexibility and can easily squeeze rates down if this became an issue.\u00a0 Benefit to US businesses: none, simply higher taxes.\u00a0 Benefit to US economy:\u00a0 additional tax income, but less competitive businesses.<\/span><\/strong><\/p>\n

2) There are an estimated 31 million business in the US, according to the latest government stats… er… that’s quite a lot of administration needed?<\/strong>\u00a0 Even the smallest of firms often use offshore call center support.\u00a0 The administrative organization needed to manage and\u00a0audit this number of businesses to\u00a0ensure compliance\u00a0would be massive.\u00a0 You are talking multiple millions of dollars\u00a0in investment that would likely struggle to be offset by the resulting tax returns.\u00a0 Benefit to US economy:\u00a0 none, simply government money wasted on bureaucracy.<\/span><\/strong>\u00a0<\/p>\n

3) Customers will be informed where their call is being taken, which will create negative overtones for businesses.<\/strong>\u00a0 This is probably the\u00a0only\u00a0“effective” component of this legislation,\u00a0solely based on the fact it will educate the US masses\u00a0that offshore workers are more competitive that they are, and run most of the call center work these days.\u00a0 \u00a0 However, what good will this do beyond stir up anti-offshoring attitudes?\u00a0 Yes, it may encourage a small proportion of businesses to move their work to US call centers, but if all calls are revealing the location, it will simply become an expected procedure and quickly lose its impact (such as the adverse\u00a0side-effects warnings after pharmaceutical products commercials).\u00a0 Benefit to US economy:\u00a0 none, simply the creation of negative overtones towards companies offshoring.<\/span><\/strong>\u00a0<\/p>\n

4) US call centers are very good and becoming increasingly competitive.<\/strong>\u00a0 The Recession has only helped US call centers, with a lot more work being moved to centers in locations such as North Dakota, Michigan and Nebraska.\u00a0 Why not use some of this cash to give the US call centers tax-breaks to be more price-competitive, than penalize the offshore centers?\u00a0 Heaven forbid, why not support new center development in US locations?\u00a0 Benefit to US cell centers:\u00a0 a little more clout and a little more price competitiveness, but likely to be minimal overall.<\/span><\/strong><\/p>\n

5) Large enterprises may simply route calls to their offshore captives.<\/strong>\u00a0 Most mid-to-large US enterprises can simply shift call center work back inhouse and run from their own offshore\/nearshore locations.\u00a0\u00a0 Benefit to US economy:\u00a0 none.<\/span><\/strong><\/p>\n

6) This legislation also raises the potential of retaliation from other countries,\u00a0under the recent Uruguay Round of WTO Agreements.\u00a0<\/span>\u00a0<\/strong>Taxing international calls and not taxing domestic calls is a form of discrimination against foreign call center\u00a0service providers that violates the basic principle of \u201cnational treatment\u201d<\/a>, with the exception\u00a0of specific situations, such as national security, the environment, local labor, police, etc. Benefit to US economy:\u00a0 zero, and potentially negative.<\/span><\/strong><\/span><\/span><\/p>\n

All-in-all this legislation is reactive, not proactive<\/span>.\u00a0 <\/strong>The old days of outsourcing backlashes are well and truly over.\u00a0 It’s clear that\u00a0the way forward is to make the US an attractive location <\/em>for call center, and other commonly outsourced work-types.\u00a0 Furthermore, it’s clear that the US needs to be an attractive\u00a0environment where\u00a0where firms simply\u00a0want to function, where they can\u00a0receive government benefits to help then get established, and to hire US-based personnel.\u00a0<\/p>\n

Other economies all aggressively support businesses to invest in their own locations (just go through the countries –\u00a0they all do it, and some very effectively).\u00a0 This legislation does very little to help US call center jobs and will likely cost the tax payer more in implementing the plan than it can ever accrue from the tax.\u00a0 Government leaders need to be smarter about “protecting jobs”, which means actually helping to create work onshore, as opposed to scaremongering \/ taxing\u00a0enterprises into forced activities that do not enhance their competitiveness.\u00a0 For example, the proposed “Entrepreneur’s Visa<\/a>” is a fine idea – it is encouraging top entrepreneurial talent to set up shop in the US and employ US talent, and they will receive\u00a0 a Green Card.\u00a0 We need to see more schemes that drive<\/em> the global\u00a0entrepreneurial agenda for the US economy, not hold it back.<\/p>\n

\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

It can't be… surely not… is that… is that… a proactive bill that encourages businesses to invest in the US?…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48],"tags":[796],"ppma_author":[19],"yoast_head":"\nWhy Senator Schumer's proposed call center tax is detrimental and unproductive for the US economy - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/schumer-060410\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Senator Schumer's proposed call center tax is detrimental and unproductive for the US economy - Horses for Sources | No Boundaries\" \/>\n<meta property=\"og:description\" content=\"It can't be… surely not… is that… is that… a proactive bill that encourages businesses to invest in the US?...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.horsesforsources.com\/schumer-060410\/\" \/>\n<meta property=\"og:site_name\" content=\"Horses for Sources | No Boundaries\" \/>\n<meta property=\"article:published_time\" content=\"2010-06-04T17:39:00+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2010\/06\/lost-innovation1.jpg\" \/>\n<meta name=\"author\" content=\"Phil Fersht\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@pfersht\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Phil Fersht\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.horsesforsources.com\/schumer-060410\/\",\"url\":\"https:\/\/www.horsesforsources.com\/schumer-060410\/\",\"name\":\"Why Senator Schumer's proposed call center tax is detrimental and unproductive for the US economy - Horses for Sources | No Boundaries\",\"isPartOf\":{\"@id\":\"https:\/\/www.horsesforsources.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.horsesforsources.com\/schumer-060410\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.horsesforsources.com\/schumer-060410\/#primaryimage\"},\"thumbnailUrl\":\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2010\/06\/lost-innovation1.jpg\",\"datePublished\":\"2010-06-04T17:39:00+00:00\",\"dateModified\":\"2010-06-04T17:39:00+00:00\",\"author\":{\"@id\":\"https:\/\/www.horsesforsources.com\/#\/schema\/person\/c4f084ff7ad43632f537b3b30918e69f\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.horsesforsources.com\/schumer-060410\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.horsesforsources.com\/schumer-060410\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.horsesforsources.com\/schumer-060410\/#primaryimage\",\"url\":\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2010\/06\/lost-innovation1.jpg\",\"contentUrl\":\"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2010\/06\/lost-innovation1.jpg\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.horsesforsources.com\/schumer-060410\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.horsesforsources.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Why Senator Schumer’s proposed call center tax is detrimental and unproductive for the US economy\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.horsesforsources.com\/#website\",\"url\":\"https:\/\/www.horsesforsources.com\/\",\"name\":\"Horses for Sources | No Boundaries\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.horsesforsources.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.horsesforsources.com\/#\/schema\/person\/c4f084ff7ad43632f537b3b30918e69f\",\"name\":\"Phil Fersht\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.horsesforsources.com\/#\/schema\/person\/image\/86ee0c0ac2d033eed87f327162eb27f7\",\"url\":\"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2020\/11\/phill-150x150.png\",\"contentUrl\":\"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2020\/11\/phill-150x150.png\",\"caption\":\"Phil Fersht\"},\"description\":\"Phil Fersht is\u00a0a world-renowned analyst, writer and visionary in\u00a0emerging technologies, automation, digital business models, and the alignment of\u00a0enterprise operations to\u00a0drive customer impact and competitive advantage\",\"sameAs\":[\"http:\/\/hfsresearch.com\/team\/phil-fersht\",\"https:\/\/www.linkedin.com\/in\/pfersht\/\",\"https:\/\/x.com\/pfersht\"],\"url\":\"https:\/\/www.horsesforsources.com\/author\/phil-fherst\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Why Senator Schumer's proposed call center tax is detrimental and unproductive for the US economy - Horses for Sources | No Boundaries","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.horsesforsources.com\/schumer-060410\/","og_locale":"en_US","og_type":"article","og_title":"Why Senator Schumer's proposed call center tax is detrimental and unproductive for the US economy - Horses for Sources | No Boundaries","og_description":"It can't be… surely not… is that… is that… a proactive bill that encourages businesses to invest in the US?...","og_url":"https:\/\/www.horsesforsources.com\/schumer-060410\/","og_site_name":"Horses for Sources | No Boundaries","article_published_time":"2010-06-04T17:39:00+00:00","og_image":[{"url":"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2010\/06\/lost-innovation1.jpg"}],"author":"Phil Fersht","twitter_card":"summary_large_image","twitter_creator":"@pfersht","twitter_misc":{"Written by":"Phil Fersht","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.horsesforsources.com\/schumer-060410\/","url":"https:\/\/www.horsesforsources.com\/schumer-060410\/","name":"Why Senator Schumer's proposed call center tax is detrimental and unproductive for the US economy - Horses for Sources | No Boundaries","isPartOf":{"@id":"https:\/\/www.horsesforsources.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.horsesforsources.com\/schumer-060410\/#primaryimage"},"image":{"@id":"https:\/\/www.horsesforsources.com\/schumer-060410\/#primaryimage"},"thumbnailUrl":"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2010\/06\/lost-innovation1.jpg","datePublished":"2010-06-04T17:39:00+00:00","dateModified":"2010-06-04T17:39:00+00:00","author":{"@id":"https:\/\/www.horsesforsources.com\/#\/schema\/person\/c4f084ff7ad43632f537b3b30918e69f"},"breadcrumb":{"@id":"https:\/\/www.horsesforsources.com\/schumer-060410\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.horsesforsources.com\/schumer-060410\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.horsesforsources.com\/schumer-060410\/#primaryimage","url":"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2010\/06\/lost-innovation1.jpg","contentUrl":"http:\/\/www.horsesforsources.com\/wp-content\/uploads\/2010\/06\/lost-innovation1.jpg"},{"@type":"BreadcrumbList","@id":"https:\/\/www.horsesforsources.com\/schumer-060410\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.horsesforsources.com\/"},{"@type":"ListItem","position":2,"name":"Why Senator Schumer’s proposed call center tax is detrimental and unproductive for the US economy"}]},{"@type":"WebSite","@id":"https:\/\/www.horsesforsources.com\/#website","url":"https:\/\/www.horsesforsources.com\/","name":"Horses for Sources | No Boundaries","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.horsesforsources.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.horsesforsources.com\/#\/schema\/person\/c4f084ff7ad43632f537b3b30918e69f","name":"Phil Fersht","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.horsesforsources.com\/#\/schema\/person\/image\/86ee0c0ac2d033eed87f327162eb27f7","url":"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2020\/11\/phill-150x150.png","contentUrl":"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2020\/11\/phill-150x150.png","caption":"Phil Fersht"},"description":"Phil Fersht is\u00a0a world-renowned analyst, writer and visionary in\u00a0emerging technologies, automation, digital business models, and the alignment of\u00a0enterprise operations to\u00a0drive customer impact and competitive advantage","sameAs":["http:\/\/hfsresearch.com\/team\/phil-fersht","https:\/\/www.linkedin.com\/in\/pfersht\/","https:\/\/x.com\/pfersht"],"url":"https:\/\/www.horsesforsources.com\/author\/phil-fherst\/"}]}},"authors":[{"term_id":19,"user_id":3,"is_guest":0,"slug":"phil-fherst","display_name":"Phil Fersht","avatar_url":{"url":"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2024\/02\/Phil-Fersht-HFS-Updated.jpg","url2x":"https:\/\/www.horsesforsources.com\/wp-content\/uploads\/2024\/02\/Phil-Fersht-HFS-Updated.jpg"},"first_name":"Phil","last_name":"Fersht","user_url":"http:\/\/hfsresearch.com\/team\/phil-fersht","description":"Phil Fersht is\u00a0a world-renowned analyst, writer and visionary in\u00a0emerging technologies, automation, digital business models, and the alignment of\u00a0enterprise operations to\u00a0drive customer impact and competitive advantage"}],"_links":{"self":[{"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/posts\/1666"}],"collection":[{"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/comments?post=1666"}],"version-history":[{"count":0,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/posts\/1666\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/media?parent=1666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/categories?post=1666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/tags?post=1666"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.horsesforsources.com\/wp-json\/wp\/v2\/ppma_author?post=1666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}