Senate Dems target corporate taxes

New legislation backed by 14 Democratic senators would impose a two-year moratorium during which corporations couldn’t shift their residences overseas to avoid paying U.S. taxes.

The bill targets a tax practice known as “inversion,” which allows a company to lower its corporate tax bill by moving its address out of the U.S.

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“These transactions are about tax avoidance, plain and simple,” Sen. Carl LevinCarl LevinTrump's crush on foreign autocrats threatens democracy at home OPINION: Congress must press forward with its Russia investigation Democrats and Republicans share blame in rewriting the role of the Senate MORE, chairman of the Senate Permanent Subcommittee on Investigations, said Tuesday. 

“The Treasury is bleeding red ink, and we can’t wait for comprehensive tax reform to stop the bleeding. Our legislation would clamp down on this loophole to prevent corporations from shifting their tax burden onto their competitors and average Americans while Congress is considering comprehensive tax reform.”

Levin is a longtime proponent of ending tax breaks for corporations, but Republicans oppose raising taxes on businesses.

The bill has 12 other Democrat co-sponsors: Sens. Sheldon WhitehouseSheldon WhitehouseJudiciary Committee to continue Russia probe after Mueller meeting GOP hits the gas on ObamaCare repeal Dems limited in their ability to slow ObamaCare vote MORE (R.I.), Dianne FeinsteinDianne FeinsteinGrassley: Comey must say if FBI investigated Sessions Grassley doesn't see how Judiciary 'can avoid' obstruction probe Senators grill Perry on Yucca nuclear storage plans MORE (Calif.), Tim KaineTim KaineLive coverage: Senate Dems hold talkathon to protest GOP health plan Trump supporter who lost tight Va. governor primary weighs Senate run Northam defeats Sanders-backed candidate in Va. gov primary MORE (Va.), Brian Schatz (Hawaii), Mazie HironoMazie HironoSenate Dem offers patent reform bill Office of Government Ethics: Bannon’s waiver 'problematic' Twitter mocks GOP for using movie gif to dismiss Comey statement MORE (Hawaii), Ben CardinBen CardinOvernight Cybersecurity: Trump tweetstorm on Russia probe | White House reportedly pushing to weaken sanctions bill | Podesta to testify before House Intel Senate expected to pass Russia sanctions bill for a second time Donna Brazile: Congress has duty to halt Trump on Russia sanctions MORE (Md.), Jay RockefellerJay RockefellerOvernight Tech: Trump nominates Dem to FCC | Facebook pulls suspected baseball gunman's pages | Uber board member resigns after sexist comment Trump nominates former FCC Dem for another term Obama to preserve torture report in presidential papers MORE (W.Va.), Barbara BoxerBarbara BoxerTime is now to address infrastructure needs Tom Steyer testing waters for Calif. gubernatorial bid Another day, another dollar for retirement advice rip-offs MORE (Calif.), Bill NelsonBill NelsonSenate panel unveils aviation bill with consumer protections, drone fix Driverless cars speed onto political agenda Biden leaves options on table for another White House bid MORE (Fla.), Tim JohnsonTim JohnsonCourt ruling could be game changer for Dems in Nevada Bank lobbyists counting down to Shelby’s exit Former GOP senator endorses Clinton after Orlando shooting MORE (S.D), Debbie StabenowDebbie StabenowNo certainty on cost-sharing payments to insurers Dems express concerns about Trump's proposed rural development cuts Trump, Clinton campaign aides launch their own bids MORE (Mich.) and Elizabeth WarrenElizabeth WarrenLive coverage: Senate GOP unveils its ObamaCare repeal bill Overnight Regulation: Labor groups fear rollback of Obama worker protection rule | Trump regs czar advances in Senate | New FCC enforcement chief Budowsky: Dems madder than hell MORE (Mass.), as well as Sen. Angus KingAngus KingZinke hits Dems for delaying Interior nominees Angus King: I’m sure Flynn will 'appear before the committee one way or another' GOP senators pleased with Ivanka Trump meeting on family leave, child tax credits MORE (I-Maine).

“This bill is a necessary step to crack down on companies that use gimmicks to avoid paying taxes,” Feinstein said. “What we need is a complete overhaul of the corporate tax code. Until that happens, Congress must act to prevent companies from exploiting loopholes that unfairly lower their tax bills.”

According to a statement from Levin's office, current law allows a U.S. company to avoid paying U.S. income taxes if it merges with an offshore company and transfers 20 percent of its stock to shareholders of that company. 

Levin's bill would raise that threshold to 50 percent, so that if the majority of a company’s stock remains in the hands of the U.S. company’s shareholders, it is treated as a U.S. company for tax purposes. 

The bill would bar companies from shifting tax residence offshore if their management control and significant business operations remain in the United States.

The two-year moratorium would provide time for Congress to work on comprehensive corporate tax reform, the statement said. 

Companion legislation is being introduced in the House by Rep. Sandy Levin (D-Mich.), Carl Levin’s brother.