Levin’s comments come less than three weeks before the economy would be forced to absorb automatic spending cuts and across-the-board tax increases, and after the Obama administration has floated corporate tax reform as part of a potential year-end deal.
A corporate tax overhaul that lowers rates while getting rid of tax preferences is also one area where Democrats and Republicans have found some common ground.
Republicans would like to lower the corporate rate, now 35 percent, to 25 percent. The Obama administration released a framework in February that would have lowered the top rate to 28 percent.
GOP lawmakers and multinational corporations would like to shift to a territorial system, while the Obama administration has been publicly cool to the idea in recent months.
Proponents of the territorial system say it would spur companies to bring back foreign profits – estimated in some cases as high as $1.7 trillion – that businesses say are currently being kept offshore because of the high U.S. tax rate.
On the Friday call, Levin said that he wanted the elimination of corporate tax breaks to be an immediate revenue-raiser in a deal, or that a commitment to end those incentives be part of a broader, long-term deal.
The Michigan Democrat also said that wringing some $200 billion to $300 billion out of corporations would be sufficient in a broader deal. Republicans charged that the Obama administration’s corporate tax framework would raise roughly $250 billion, because it said it no longer wanted to add the costs of extending temporary tax provisions like the research credit to the deficit.
It is “critically important,” Levin said, to “keep the president’s eye on the ball.”
Levin, who chairs a Senate Homeland Security subcommittee on investigations, released a report in September that said tax strategies used by Microsoft and Hewlett-Packard. The Michigan Democrat is also chairman of the Senate Armed Services Committee, at a time when the national security sector faces cuts in the sequester.
Levin was joined on the call by two small-business officials who had joined hundreds of others in calling on Washington to not shift to the territorial system and raise revenues from corporations.