U.S. Senator Carl Levin (D-MI) introduced legislation Thursday he says will close a number of tax loopholes. Levin sees the bill as part of a larger plan to reduce the federal deficit.
Levin says his bill would provide about $220 billion more in tax revenue over ten years.
In a written statement Levin says he wants the measure to be part of a deficit-reduction package to end automatic federal spending cuts that have been going on since January. Lawmakers need to come to some sort of agreement on the federal budget by the end of this month to avoid a government shutdown.
This is not the first time Levin has introduced this type of bill. As chairman of a permanent Senate subcommittee on investigations, Levin has criticized Microsoft, Apple and other corporations for their offshore tax practices.
In a written release his office outlines what the bill would do:
• Crack down on the use of intellectual property transfers as tax-avoidance tools by taxing excess income earned from transferring intellectual property to offshore subsidiaries;
• Give the Treasury Department important new weapons to fight against foreign governments and financial institutions that aid tax avoidance, including the ability to prohibit U.S. banks from doing business with foreign banks in jurisdictions that impede U.S. tax enforcement;
• Require SEC-registered corporations to disclose employment, revenues and tax payments on a country-by-country basis;
• Eliminate the tax incentive for companies to move jobs and operations offshore by limiting their ability to claim immediate tax deductions for expenses related to those offshore operations while deferring the U.S. tax on the income those operations generate;
• Repeal what are known as the “check-the-box” and “CFC look-through” rules, which allow multinationals to avoid U.S. taxes they would otherwise owe by making offshore subsidiaries disappear for tax purposes, turning taxable passive income into tax-deferred active income;
• Prevent multinationals from using short-term loans from their offshore subsidiaries to essentially repatriate income while avoiding taxes that should apply to repatriated money.
Read the entire bill here.