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Schumer Looks to Tax Companies' Call Centers
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Schumer Looks to Tax Companies' Call Centers

June 10, 2010

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By David Sims,
TMCnet Contributing Editor

Never underestimate politicians' ability to find more ways to extract money from the productive sector of the economy to fund their campaign promises.
New York Senator Charles Schumer is proposing legislation to tax companies 25 cents each time a call is transferred to a foreign country, according to Connected Planet:

"According to reports, the proposal also would require companies to tell their US-based customers when their call was being transferred and to which country."
As a New York resident, Connected Planet's Susana Schwartz writes "I question whether Schumer's proposal is really altruistic in nature or just a potential ploy to make more money for the state," while noting New York state's $9.2 billion budget deficit. How a federal tax would benefit New York state's budget was unfortunately left unexplained.
She also contends, probably correctly, that Schumer's grandstanding "resonates well with the message of localization for boosting job markets, not only in telecom but all vertical markets."
According to numbers from the Technology Marketing Corp. cited by Schwartz, the US lost 250,000 call center jobs to India and the Philippines from 2001 to 2003: "But in 2007, Cornell University conducted a study covering almost 2,500 centers in 17 countries that found that most call centers serving U.S. customers were operated in the US."
The study, Connected Planet wrote, found "most centers, except India, served domestic markets. Two-thirds were in-house for companies serving their own customers and had lower turnover rates than subcontractors. Also turnover, ranging from 25 percent to 50 percent annually depending on the sector," steeply reduced productivity.
"English speaking workers, whether they are in Indonesia, Canada, the Philippines, South Africa, are willing to work longer hours for lower wages and as a result Americans lose their jobs,' Schumer said.
He did not ask why America doesn't allow its call center workers to keep their jobs at wages competitive with the rest of the world, or question why Washington has chosen to price this particular industry out of the country.


 


David Sims is a contributing editor for TMCnet. To read more of David's articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Juliana Kenny
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