25% Tax Bombshell – MAJOR Economic SHIFT

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A new bill in Congress could finally end the outsourcing of American jobs to foreign workers, striking a blow for U.S. workers and economic sovereignty.

Story Snapshot

Senator Bernie Moreno (R-Ohio) introduced the HIRE Act, proposing a 25% tax on payments to foreign workers serving U.S. clients.
The bill would eliminate tax deductions for outsourcing payments and fund a Domestic Workforce Fund for American worker training.
India’s IT and BPO sectors, heavily reliant on U.S. contracts, warn of severe economic consequences if the bill passes.
The HIRE Act marks a significant shift from previous protectionist measures, targeting services rather than goods.
U.S. companies and Indian firms face major uncertainty as the bill moves through the Senate Committee on Finance.

Moreno’s HIRE Act Targets Outsourcing

Senator Bernie Moreno (R-Ohio) has introduced the Halting International Relocation of Employment (HIRE) Act, a bold legislative move aimed at curbing the outsourcing of American jobs. The bill proposes a 25% excise tax on payments made by U.S. companies to foreign workers whose services benefit U.S. consumers. This tax would apply broadly to all outsourcing payments, not just specific visa categories, and would prohibit these payments from being tax-deductible. The revenue generated would be channeled into a Domestic Workforce Fund, dedicated to training and upskilling American workers.

The HIRE Act represents a significant escalation in U.S. protectionist policy, targeting the heart of India’s service export economy. India’s IT and BPO sectors, which have become global leaders with the U.S. as their largest client, are particularly vulnerable to this legislation. The bill’s structure removes the cost advantage of outsourcing, directly threatening the business model of Indian IT and BPO firms. If enacted, the HIRE Act would fundamentally alter the economics of global service delivery, with significant global ripple effects.

Impact on U.S. and Indian Economies

The HIRE Act’s potential impact is far-reaching. For Indian IT and BPO firms, the bill could lead to immediate uncertainty, a potential freeze or reduction in new U.S. contracts, and increased operational costs. The Indian economy, which relies heavily on service exports for foreign exchange and employment, could face severe economic consequences. Indian political leaders and industry experts have issued strong warnings, with some suggesting the bill could “ignite a crisis in the Indian economy” if passed.

For U.S. companies, the bill could mean higher costs for outsourced services, potentially leading to increased prices for consumers. However, the bill’s supporters argue that it will create more job opportunities for American workers and reduce the country’s dependence on foreign labor. The bill’s fate remains uncertain, but its introduction signals a growing bipartisan appetite in the U.S. for aggressive measures against offshoring of white-collar jobs.

Broader Industry and Political Implications

The HIRE Act marks a shift from previous protectionist measures, which primarily targeted goods through tariffs, to services. This change requires close attention from policymakers and industry leaders. Some experts suggest that strengthening Global Capability Centres (GCCs) and diversifying export markets could help India mitigate the impact. However, the bill’s passage could lead to a structural shift in global service delivery models, with possible relocation of service centers to other regions or onshore in the U.S.

READ NOW: Sen. Moreno’s HIRE Act Seen as Major Threat to India’s Service Economy — Bernie Moreno’s Halting International Relocation of Employment Act could significantly affect India’s technology-services economy if…https://t.co/5HQhwwKeGF

— Top News by CPAC (@TopNewsbyCPAC) November 6, 2025

The HIRE Act’s introduction has also strained U.S.-India economic relations, with increased protectionist sentiment in U.S. politics. While some see the bill as a necessary step to protect U.S. jobs, others warn it could backfire by raising costs for American businesses and consumers. The bill’s passage is uncertain, but its introduction signals a growing bipartisan appetite in the U.S. for aggressive measures against offshoring of white-collar jobs.