Logic. That is what Senator Levin is speaking right now. Logic. Levin has long been an advocate of closing corporate tax loopholes as a way to help spur economic growth, reform the tax code and pay down our debt. It's a winning issue for Democrats. Regular middle and working class Americans of various ideologies and backgrounds can agree they hate it when the large companies don't pay their fair share. But to get that idea moved through the Senate, Levin needs allies:One way we can bring down the deficit while avoiding those damaging cuts is to close some egregious corporate tax loopholes.
Over the last year, I’ve fought for changes to bring down the deficit and make the tax code fairer. For example, we should end the tax loopholes and accounting gimmicks that allow companies to give lucrative stock options to executives and stick Uncle Sam with the tab; that allow companies to avoid taxes by shifting U.S. income to offshore shell corporations; that subsidize companies for moving U.S. jobs offshore; and that allow hedge fund managers to pay a lower tax rate than their staff.
Revenue from closing those loopholes will help us preserve programs that support the aspirations of average families. For example, Congress acted over the summer to avoid a doubling of student-loan rates that would have put college — already a financial strain for most families — even further out of reach. We beat back attempts to reduce the budgets for education, research into groundbreaking technology and life-saving medical treatments. We must continue to fight to preserve these important investments in our people and their future. - Press & Guide, 1/29/13
The Center For American Progress has emphasized how important closing corporate tax loopholes is essential to paying down our deficit:Senator Carl Levin for years tried to close U.S. corporate tax loopholes but failed to persuade many fellow Democrats. With an ax now looming over all federal spending, the veteran Michigan lawmaker hopes to gain some converts.
Levin's committee on investigations has long used its subpoena power to produce reports on corporate tax avoidance and wrongdoing. His panel, which has oversight over government operations, has no power to enact tax law, and neither tax-writers nor Senate leadership have taken up his cause.
It may be an uphill climb for Levin's ideas to win passage, given the lack of backing from Senate leadership and Max Baucus, the chairman of the Senate Finance Committee, in the past. His last plan for tightening the corporate tax regime would have raised about $150 billion over 10 years. - Reuters, 1/29/13
Levin won't agree to cuts to either domestic or defense spending. He has stated that cuts to both programs would be mindless and a big disaster for our economy. So Levin's going back to the mattresses on closing these corporate tax loopholes:As Washington heads into the next round of budget negotiations, congressional Republicans are again asserting that every dollar of future deficit reduction must come from cutting government programs and services, not from additional revenue. Congress has already cut spending substantially, however: Three-quarters of the $2.4 trillion in deficit reduction that had been enacted since 2011 has been in the form of spending cuts, and only one-quarter has come from increasing revenue. While Congress raised the top marginal tax rate in the recent legislative deal to avoid the fiscal cliff, it has not even begun to tackle the vast array of tax breaks that disproportionately benefit upper-income Americans, nor has it addressed the many loopholes enjoyed by large corporations. These special tax breaks must be on the table going forward if Congress is committed to a balanced approach to solving our fiscal challenges.
This issue brief identifies about $1 trillion in potential savings over 10 years that can be gained from reducing or reforming tax breaks for high-income individuals and corporations. That amount would be more than enough to replace the so-called sequester, the sudden and indiscriminate cuts to government programs that are now scheduled to take effect starting in March.
These common-sense reductions in tax breaks are far preferable to many of the alternatives: allowing the sequester to kick in; enacting deeper cuts to discretionary spending programs, which have already been cut to the bone; or reducing Social Security, Medicare, or Medicaid benefits. - The Center For American Progress, 1/22/13
Last year, Levin also proposed closing tax loopholes like offshore tax havens, a suggestion made by by a coalition of business leaders that consists of the American Sustainable Business Council, Business for Shared Prosperity, and the Main Street Alliance, a small-business group:A six-term senator better known as chairman of the Armed Services Committee, Levin will again in coming weeks introduce legislation to close tax loopholes. It will be part of an effort to head off the sequester looming on March 1 when $85 billion in indiscriminate spending cuts will be imposed across nearly all federal programs.
"It is kind of gelling," Levin said in a hallway interview on Tuesday. "I've circulated now to our chairmen in the caucus a list that is very specific, a discrete list," of proposals on corporate tax avoidance.
Other provisions in Levin's last effort include establishing a presumption that a corporation formed by a U.S. taxpayer is considered under that taxpayer's control for tax purposes, and disallowing companies from accounting for stock options in one way to tax authorities and another way on their financial statements. - Reuters, 1/29/13
Levin believes that by closing tax loopholes like offshore tax havens could generate tens of billions of dollars a year. With these loopholes, it's no wonder why corporate profits are at an all time high:The advocates have attracted the support of Democratic legislators like Sen. Carl Levin, who argues that corporations, too, should be contributing net revenue to deficit reduction, rather than just finding savings through entitlement programs and the small businesses who pay their taxes through the individual tax code. Levin estimates that “tens of billions of dollars a year” could be raised by closing tax loopholes like offshore tax havens. “I would hope that these revenues which are so critically important to a deficit reduction package are being considered,” he said. - Washington Post, 12/14/12
Corporate tax revenue is currently below its historic average, even though corporate profits are at an all-time high. The corporate income tax used to track reasonably well with the rise and fall of corporate profits, but has become decoupled in the last few decades due to the proliferation of credits, deductions, and loopholes, and the growing use of offshore tax havens, as this chart shows:Levin marches on into 2013 for another year of battle. Will he win the war though? We shall see. But will he soldier on after 2014? That remains to be seen. Part of me is hoping he stays but I'm sure a lot of people here in this community are still angry with Levin over the filibuster reform debate. Maybe it's time to get some fresh blood to pass on Levin's ongoing fight to close corporate tax loopholes. I think it's safe to say if Levin wants to call it quits, he can now because I know we'll find someone who is fresh and ready for this ongoing fight.
Last year, the effective tax rate paid by American corporations fell to 12.1 percent, a forty-year low. - Think Progress, 12/14/12