I agree with the tax loophole except - sm Posted: Mar 20th, 2018 - 7:20 pm In Reply to: I agree, yet still I feel within - the past few months
I don't believe it's a loophole in favor of ICs, I think it's because the recent tax bill makes it more expensive to operate overseas. So I think what is happening is that these MTSOs are too heavily invested overseas and in order to stay afloat with costs having suddenly gone up, they are choosing to farm more work out to US ICs, and it is to the point that they CAN'T hide it. Maybe they don't even care about hiding it now.
It is probably cheaper right now to hire a US IC willing to work for the same pay as the Indians (2 cents per line!!) than to send the work to India at the higher tax rate, so basically they are doing damage control.
It may be a temporary solution until they figure something better out, but I suspect that's what's happening.
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