Carl, Sander Levin rebuke Sanders for tax comments on Panama trade deal

Carl, Sander Levin rebuke Sanders for tax comments on Panama trade deal
© Michael Bonfigli/The Christian Science Monitor

Two Michigan Democrats on Thursday rebuffed Sen. Bernie SandersBernie SandersFilibuster becomes new litmus test for Democrats Gallego says he's been approached about challenging Sinema Democrats call on Biden administration to ease entry to US for at-risk Afghans MORE (I-Vt.) for claiming that a free trade agreement between the U.S. and Panama opened the door to more tax evasion by Americans and won't allow for investigations.

Rep. Sander Levin (Mich.) and his brother, retired Sen. Carl LevinCarl Milton LevinOvernight Defense: First group of Afghan evacuees arrives in Virginia | Biden signs Capitol security funding bill, reimbursing Guard | Pentagon raises health protection level weeks after lowering it Biden pays tribute to late Sen. Levin: 'Embodied the best of who we are' Former Colorado Gov. Richard Lamm dead at 85 MORE (Mich.) said that the Democratic presidential hopeful "has it backward" on the effects of the Panama deal amid the release the Panama Papers, a trove of more than 11.5 million documents detailing offshore bank accounts used to avoid taxes by some of the world's most powerful leaders. 


“Sen. Sanders argument that the Panama agreement would 'effectively bar' the United States from going after tax evaders in Panama is wrong,” the Levins said in a statement. The Levins have pledged their support to party front-runner Hillary ClintonHillary Diane Rodham ClintonNo Hillary — the 'Third Way' is the wrong way The dangerous erosion of Democratic Party foundations The Hill's Morning Report - Presented by Facebook - Democrats see victory in a voting rights defeat MORE in the presidential race. 

Sanders's argument that U.S. efforts to combat tax-haven abuse would violate the Panama agreement don't hold water, they said. 

The Levins said the trade deal has not only provided greater tax transparency, but it clearly states that “nothing in this agreement shall apply to taxation measures" and thus wouldn't stop the IRS from pursuing violators. 

In fact, Congress used the negotiations to force Panama to sign the Tax Information Exchange Agreement (TIEA) to stem the tide of U.S. taxpayers trying to avoid paying their tax bills.

"The signing of the TIEA provided the U.S. access to critically needed information on the U.S. tax cheats using Panama as a tax haven,” they said. 

While the release of the Panama Papers illustrates nefarious activities and the need of the global financial community, including the Organization for Economic Cooperation and Development (OECD), to insist Panama meet higher standards, the trade agreement actually has mitigated the problem, the Levins said. 

"Indeed, to the extent the Panama Papers provide information ripe for investigation, the IRS has the authority to pursue those leads using the tools in the TIEA to which Panama became a party as a condition for action on the trade agreement," they said. 

Congress also insisted that Panama’s National Assembly ratify the TIEA and all legislation needed to implement the tax deal before lawmakers would consider a vote on the Panama agreement.

Sanders tried to use Hillary Clinton’s support for the agreement — ratified by Congress in 2011 — while secretary of State as another barb in the trade debate that has inflamed the campaign trail. 

On Wednesday, Sanders said that Clinton's support for the trade agreement disqualifies her from becoming president.

“I don’t think you are qualified if you supported the Panama free trade agreement, something I very strongly opposed, which has made it easier for wealthy people and corporations all over the world to avoid paying taxes owed to their countries,” Sanders said on Wednesday a rally at Temple University.

On Tuesday, Sanders vowed to terminate the Panama deal within the first six months of his presidency.

Eariler this week the OECD said that: "Just a few weeks ago, we told G-20 Finance Ministers that Panama was back-tracking on its commitment to automatic exchange of financial account information. The consequences of Panama’s failure to meet the international tax transparency standards are now out there in full public view.”