By Bernie Becker - 09/19/13 03:52 PM EDT
Sen. Carl LevinCarl LevinSenate continues to disrespect Constitution, Obama and Supreme Court by not voting on Garland As other regulators move past implementing Dodd-Frank, the SEC falls further behind Will partisan politics infect the Supreme Court? 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.
“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 BegichRyan's victory trumps justice reform opponents There is great responsibility being in the minority Senate GOP deeply concerned over Trump effect MORE (Alaska), Jeanne Shaheen Jeanne ShaheenTaxpayers should be wary of false sugar reform proposals 10 things candidates need to know about women entrepreneurs Dem senators to GOP: Dump Trump MORE (N.H.) and Sheldon WhitehouseSheldon WhitehouseBanking association backs financial transparency bill Shift in care could reverse the opioid epidemic Dems ask Cruz to hold hearing on Trump's Russian hacking remarks 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 CoburnTom CoburnRyan calls out GOP in anti-poverty fight The Trail 2016: Words matter Ex-Sen. Coburn: I won’t challenge Trump, I’ll vote for him MORE (R-Okla.) and John McCainJohn McCainFive takeaways from Clinton, Trump finance reports Trump, Clinton running even in Missouri Bergdahl lawyers to argue McCain comments were 'impermissible meddling' 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.