Sen. Levin aims at offshore tax loopholes

Sen. Carl LevinCarl Milton LevinHow House Republicans scrambled the Russia probe Congress dangerously wields its oversight power in Russia probe The Hill's Morning Report — Sponsored by CVS Health — Trump’s love-hate relationship with the Senate MORE rolled out new legislation on Thursday to crack down on the use of offshore tax evasion techniques, a measure he said could play a key role in getting rid of sequestration.

Speaking at an event hosted by The Hill and sponsored by Small Business Majority, Levin, who has long crusaded against offshore tax loopholes, said his bill takes aim at a number of complex tax tactics that big-time corporations employ, including the shifting of intellectual property rights and the setting up of offshore shell companies.

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Levin insisted that those sorts of tax loopholes serve no economic purpose, and should be low-hanging fruit as Washington tries to tackle deficit reduction. In all, the Michigan Democrat's bill would raise some $220 billion over a decade.

“We shouldn’t tolerate these kinds of loopholes being used even if we didn’t have a deficit problem,” Levin said at the event also sponsored by the Small Business Majority. “A lot of tax loopholes — so-called loopholes — most of them have a productive purpose.”

“The oil and gas deduction or credit — I don’t like it. I don’t vote for it. But at least it has a purpose,” he added.

This marks the sixth Congress that Levin has rolled out legislation to target tax haven abuse. Three Democratic senators — Mark BegichMark Peter BegichPerez creates advisory team for DNC transition The future of the Arctic 2016’s battle for the Senate: A shifting map MORE (Alaska), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenJudd Gregg: 'Medicare for all' means rationing for everyone The Hill's Morning Report - Sponsored by CVS Health - A pivotal day for House Republicans on immigration Overnight Defense: Senate confirms Haspel as CIA chief | Trump offers Kim 'protections' if he gives up nukes | Dem amendments target Trump military parade MORE (N.H.) and Sheldon WhitehouseSheldon WhitehouseOvernight Energy: Pruitt gets Senate grilling | Dems want investigation into Pruitt's security chief | Interior officers arrested 13 in border surge | Advisers pan science 'transparency' plan Dems claim Pruitt's former security chief intervened to hire business associate Pruitt: ‘I don’t recall’ asking security agents to use sirens MORE (R.I.) — joined Levin in introducing the legislation this time around.

Levin, the chairman of a permanent Senate subcommittee on investigations, has investigated several corporate heavyweights, including Apple, Hewlett Packard and Microsoft, for their offshore tax practices.

His legislation would also beef up the Foreign Account Tax Compliance Act, a measure meant to crack down on U.S. citizens’ use of offshore accounts for tax evasion. Some foreign governments and financial institutions are not fans of the bill, which the federal government finalized the rule for this year.

Plus, it would target so-called “check the box” rules that effectively allow some corporate profits to disappear for tax purposes. Apple used that tactic to help avoid some $9 billion in taxes in 2012, according to a report Levin released in May.

Levin said that he envisioned his legislation as part of a broad sequester replacement package that also included entitlement reforms and more targeted spending cuts.

“The folks that use these loopholes and gimmicks, and spend huge amounts of brain power to figure out how to avoid paying taxes depend upon the complexity of our tax code,” Levin said at Thursday’s event. “They depend upon it. And we’ve got to cut through that. Because I think it’s the alternative to sequestration, and I think it’s the right thing to do.”

While no GOP senators have signed on to the bill, Levin said that he had held positive conversations on it with Sens. Tom CoburnThomas (Tom) Allen CoburnMr. President, let markets help save Medicare Pension insolvency crisis only grows as Congress sits on its hands Paul Ryan should realize that federal earmarks are the currency of cronyism MORE (R-Okla.) and John McCainJohn Sidney McCainTrump's plan to claw back spending hits wall in Congress Defense bill moves forward with lawmakers thinking about McCain How House Republicans scrambled the Russia probe MORE (R-Ariz.). He has also previously pointed out that President Obama supported earlier versions of the bill when he was in the Senate.

Top Republicans like House Ways and Means Committee Chairman Dave Camp (R-Mich.) have also said they’d be interested in changing offshore tax rules for corporations. But GOP lawmakers generally want to use the savings from tax breaks to lower rates, or shift to a system that more permanently limits U.S. taxation of offshore income for multinationals.