As you may have heard, Senator Bernie Moreno (R-Ohio) has introduced the Halting International Relocation of Employment Act, or HIRE Act, that would levy a 25% tax on outsourcing payments. For the purposes of this bill, outsourcing payments are defined as any money paid by a U.S. company or taxpayer to a foreign person whose work benefits consumers in the United States. Most media coverage of this bill has been focused on the Indian IT sector — specifically how it would send a wrecking ball through the whole thing — but it isn’t just IT that would get hit. Typical, the media ignores accounting. It’s possible the general public has no idea that firms are sending 30-60% or more of their work overseas these days (team and service line dependent, of course) so we should move on.
Said the gentleman from Ohio in a news release:
The legislation will impose a tax on any company that employs foreign labor instead of Americans and will use the generated revenue to fund workforce development programs to help the middle-class.
“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,” said Moreno. “It’s time to fight for working class Americans and ensure they can work and retire with dignity. If companies want to hire foreign workers instead of Americans, my bill will hit them where it hurts: their pocketbooks.”
The bill would also creates a Domestic Workforce Fund to collect any money raised from the outsourcing tax that would be used to support apprenticeships and workforce development programs and prohibits companies from deducting any outsourcing payments.
Sounds good on paper, that’s for sure. Practical application remains to be seen and we strongly doubt accounting firms that have come to rely on a seemingly unlimited supply of foreign labor would just lie down and accept their cheap workforce being cut off. Cue Big 4 lobbyists putting in overtime on Capitol Hill to kill this thing before it can become law just in case.
A 5-second Google tells us the average US GAAP-trained senior accountant salary in India is ₹15 Lakhs to over ₹25 Lakhs, or approximately $16,000 to $28,000. That sound about right? Doing some back of the envelope math, 25% of $16,000 is $4,000 and for $28,000 it’s $7,000 which would bring the cost of a single senior to $20,000 on the low end and $35,000 on the high end. Still much cheaper than an onshore senior. Actual math aside, the point here is that an offshore salary plus a 25% tax is still cheaper than paying equivalent US talent.
Here’s an article that digs into the specifics a bit deeper: US HIRE Act targets outsourcing, Indian workforce braces for fallout
Bill embedded below for your reading pleasure.
I just got done manually counting publications reporting on this proposal, the HIRE Act from Senator Bernie Moreno.
There is inherent bias in my method of search – these results are from a google search which returned 5 pages of results. Among them, 29 were foreign-based publications. Of those 29, 26 were based in India, they are joined by single publications from Singapore, Ukraine, and the United Arab Emirates.
Only six publications were based in the United States. Of those, three are publications which specifically target an American-based South Asian Diaspora readership. The remaining three were:
– Quiver CongressRadar, a product of Quiver Quantitative
– WTRF-TV, a local news station based in Ohio (Senator Moreno’s home state)
– Fox News
Why are American news outlets outright ignoring this proposed piece of legislation? I’m sure the answer is a simple one, but I’m still finding myself flabbergasted at the starkness of this disparity.
This bill has almost no chance of being enacted. I don’t know Moreno’s motivations, but advocacy for a bill with no prospects is not unusual as performative and a campaigning tactic to increase support from voters and donors rather than a serious effort at lawmaking. United States media outlets don’t bother report on bills they don’t expect to pass. International news outlets don’t have the political savvy to know it’s odds of passing. There’s no mystery here.
Because the bill is not likely to go anywhere or be at all important. Almost no Congressional bills matter. Tons of go-nowhere bills are introduced every session.
There can certainly be offshoring benefits, but Total Cost of Offshoring is rarely discussed. Foreign infrastructure is not always cheap. Rework of offshored work is a real factor. Productivity is generally lower. Simply comparing compensation is a partial equation.
All the India offshoring is just waiting for one big security scandal to scare companies off
No, it isn’t. Every industry depends on offshoring, and it’s entirely embedded. No “security scandal” will change that policy. It won’t even be notable in the news that offshore work was involved.
The challenge, as you said, is that even with a 25% tax, offshore talent is still cheaper than onshore. And companies will likely reduce headcount onshore to make up the difference. This could backfire spectacularly.
This article mentions that outsourcing payments are not deductible, but did not factor that into the value proposition. If you take those payments from being deductible to non-deductible plus the 25% excise tax, the cost of offshoring nearly doubles, give or take, depending on the entity type.
I realize this has been a busy week, but this legislation was proposed on September 5, 2025. Given the scale of the implications, it also blows my mind that this isn’t being picked up in the US media.
Then you don’t know anything about legislation. Bills are proposed constantly. Most of them go nowhere. Stories about bills only get big in the news when it looks like there’ strong support for them.
This might be the first real test for Mark Koizel over at the AICPA. The honeymoon is over.
The quest for globalization of the accounting profession absolutely hurts American accountants. This whole “let the foreigners do the easy stuff, and US grads can do manager work their first year” is a laughable concept.
is this the moment the AICPA officially sells out American CPAs?