Sen. Levin aims at offshore tax loopholes

Sen. Carl LevinCarl LevinPresident Trump, listen to candidate Trump and keep Volcker Rule Republicans can learn from John McCain’s heroism Trump and GOP wise to keep tax reform and infrastructure separate 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 ShaheenWeek ahead: Crunch time for defense bill’s cyber reforms | Equifax under scrutiny Five things to know about the Kaspersky-Russia controversy DHS bans Kaspersky software in federal agencies MORE (N.H.) and Sheldon WhitehouseSheldon WhitehouseJuan Williams: Momentum builds against gerrymandering Overnight Regulation: FTC launches probe into Equifax | Dems propose tougher data security rules | NYC aims to slash greenhouse gas emissions | EPA to reconsider Obama coal ash rule Overnight Cybersecurity: Kaspersky to testify before House | US sanctions Iranians over cyberattacks | Equifax reveals flaw that led to hack 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 Coburn-trillion debt puts US fiscal house on very shaky ground Al Franken: 'I make fun of the people who deserved it' The more complex the tax code, the more the wealthy benefit MORE (R-Okla.) and John McCainJohn Sidney McCainSenate's defense authorization would set cyber doctrine Senate Dems hold floor talk-a-thon against latest ObamaCare repeal bill Overnight Defense: Senate passes 0B defense bill | 3,000 US troops heading to Afghanistan | Two more Navy officials fired over ship collisions 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.