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Levin, Conrad target tax breaks
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02/07/12 08:17 PM ET
Two key Senate Democrats are introducing legislation that would sweep away a slew of tax breaks.
Sens. Carl Levin (D-Mich.) and Kent Conrad (D-N.D.) say their bill would raise at least $155 billion in fresh revenues over a decade – enough, they say, to pay for a full year of the payroll tax cut and help eat into the federal debt.
“With federal tax revenue at its lowest level in decades and economists warning that more draconian budget cuts could damage the recovery, it is clear that we can’t achieve significant deficit reduction and meet important priorities by focusing on spending cuts alone,” Levin, who has targeted offshore tax havens as chairman of a Senate investigations subcommittee, said in a statement.
For his part, Conrad, the chairman of the Senate Budget Committee, has sought a grand deficit-reduction deal that would reform the tax code in a way that immediately produced fresh revenues. Still, Democrats have been pushing to scrap certain tax credits and deductions – like preferences used by oil-and-gas companies – for months, and found practically no support from Republicans.
Democratic lawmakers pressed for corporate tax loopholes to be closed in deficit-reduction talks last year, and have also suggested using a surtax on millionaires to help fund the roughly $160 billion necessary to extend the payroll tax cut, emergency unemployment benefits and the Medicare reimbursement rate for doctors.
President Obama, in his recent State of the Union address, also called for multinational corporations and those making more than $1 million a year to pay at least a certain amount or rate in taxes.
But Republicans have stood strong against the surcharge, and have argued that tax breaks should only be eliminated in a tax overhaul that lowers marginal rates.
Conrad and Levin’s new legislation targets would, among other things, make all swap payments that start in the U.S. taxable here; give the Treasury Department more authority to take on foreign institutions that are standing in the way of tax collection; and try to limit the tax benefits can get from offshore shell entities.
The bill also targets certain favorable tax treatment for corporate stock option deductions.
Sens. Carl Levin (D-Mich.) and Kent Conrad (D-N.D.) say their bill would raise at least $155 billion in fresh revenues over a decade – enough, they say, to pay for a full year of the payroll tax cut and help eat into the federal debt.
“With federal tax revenue at its lowest level in decades and economists warning that more draconian budget cuts could damage the recovery, it is clear that we can’t achieve significant deficit reduction and meet important priorities by focusing on spending cuts alone,” Levin, who has targeted offshore tax havens as chairman of a Senate investigations subcommittee, said in a statement.
For his part, Conrad, the chairman of the Senate Budget Committee, has sought a grand deficit-reduction deal that would reform the tax code in a way that immediately produced fresh revenues. Still, Democrats have been pushing to scrap certain tax credits and deductions – like preferences used by oil-and-gas companies – for months, and found practically no support from Republicans.
President Obama, in his recent State of the Union address, also called for multinational corporations and those making more than $1 million a year to pay at least a certain amount or rate in taxes.
But Republicans have stood strong against the surcharge, and have argued that tax breaks should only be eliminated in a tax overhaul that lowers marginal rates.
Conrad and Levin’s new legislation targets would, among other things, make all swap payments that start in the U.S. taxable here; give the Treasury Department more authority to take on foreign institutions that are standing in the way of tax collection; and try to limit the tax benefits can get from offshore shell entities.
The bill also targets certain favorable tax treatment for corporate stock option deductions.
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