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Bipartisan Pair of Senators Eye Corporate Tax Reform as Part of Sequester Solution

Senator Carl Levin (D-MI) has announced that he is working with Senator John McCain (R-AZ) on a plan to close corporate tax loopholes as part of a fiscal package aimed at replacing the budget sequester. Speaking at a conference in Washington, Sen. Levin
August 12, 2013

Senator Carl Levin (D-MI) has announced that he is working with Senator John McCain (R-AZ) on a plan to close corporate tax loopholes as part of a fiscal package aimed at replacing the budget sequester. Speaking at a conference in Washington, Sen. Levin said that he and Sen. McCain want to prevent the use of offshore tax havens by multinational corporations, a practice that Sen. Levin estimates costs the U.S. Treasury more than $100 billion each year. Sen. Levin added that he is hopeful that there is enough bipartisan support in the Senate to reach agreement on a "grand bargain" to find the approximately $1 trillion needed to end sequestration.

Sen. Levin has introduced legislation, the CUT Loopholes Act, which makes a series of revenue-raising changes to the tax code. Among other things, the CUT Loopholes Act amends the tax code to:

  • Treat certain foreign corporations that are "managed and controlled" in the U.S. as domestic corporations for federal tax purposes;
  • Limit the employer deduction for stock options granted to employees to the value recorded on the employer's books; and
  • Treat swap payments sent offshore as U.S.-source income.

While Sen. McCain has not endorsed the CUT Loopholes Act, a partnership between Sens. Levin and McCain could lead to bipartisan support for the policies embodied in the legislation.

Read the Federal Times on Sen. Levin's comments; see the summary of the CUT Loopholes Act.

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