More political grandstanding: Senator Charles Schumer proposes an offshore call center tax
June 6, 2010
Recently, it was reported that Democratic Senator Charles Schumer from New York would introduce a bill that would force companies to inform customers when their calls are transferred outside the United States and then charge companies a tax for those calls transferred offshore. The proposed bill would impose a tax of $0.25 per off shored call (there would be no fee for using a domestic call center) and consumers would also need to be informed what country their call was being transferred to. Companies would also be required to certify to the Federal Trade Commission annually that they are in compliance with the requirement or they would face (unspecified) penalties.
The Business Processing Association of the Philippines (BPA/P) has already vowed not to go around such a scheme if it were to become law in the US while other outsourcing industry groups and call centers themselves have not commented on the proposal.
However, the BizzyBlog was fairly blunt in its assessment of the idea by calling it another way to fleece taxpayers to avoid cutting government spending. The blog noted that the federal government has seen its tax collections fall by almost 20% for 2009 compared to fiscal 2008 while for the first seven months of the current fiscal year, year-over-year collections were down by yet another 4.5%.
The BizzyBlog then noted that three executive summaries from reports by the National Association of Call Centers (NACC) have reported that US call center employment has generally grown – even through the current great recession. It was noted that:
- In the fourth quarter of 2008, more call center jobs were lost in the US than were gained. This was the first lost reported since data was collected going back to 2005. However, this loss of jobs was tied directly to the US recession.
- In the second quarter of 2009, more call center jobs were added in the USA than were lost. This suggested a continued recovery from the recession low during the 4th quarter of 2008.
- In the fourth quarter of 2009, more call center jobs were gained in the USA than were lost. In fact, the results showed a three quarter long job recovery from the recession low back in 2008.
In other words, call centers are one bright spot for the US economy when many other industries in the private sector economy continue to hemorrhage jobs or simply not add any. The BizzyBlog concluded by saying that Senator Schumer’s interest in a foreign call center tax has nothing to do with jobs and more to do with creating yet another source of revenue for an increasingly hungry government that simply can’t control its spending.
Hence, we would like to know what you think: Will such a proposal actually save American jobs or merely drive up costs for consumers? Or will it do both? Or is this just more political grandstanding by a politician seeking votes that will likely not go anywhere? Feel free to voice your opinion.