Levin's plan would raise at least $200 billion over 10 years. In his memo, Levin stated that corporations only pay 15% because of various deductions and loopholes even though the marginal tax rate is 35%. Levin also state that thirty multi-national corporations paid no corporate income tax at all from 2008 to 2010. The combined profits of these thirty large companies is $160 billion.Senator Carl Levin’s push to close tax loopholes will target corporate deductions for stock options and rates on investment income known as carried interest, seeking to raise at least $200 billion by one estimate.
In a memo to Democratic Senate committee leaders on Friday, the Michigan Democrat described proposals to end what he called excessive corporate tax deductions, scrap the blended tax rate for derivatives such as commodity futures and strengthen enforcement of the tax code, Bloomberg BNA reported.
Levin -- chairman of a Senate investigations subcommittee that has jurisdiction over offshore banking and tax practices and federal waste, fraud and abuse -- plans to introduce a measure called the Cut Unjustified Tax Loopholes Act. - Bloomberg, 2/4/13
Title I of the Cut Unjustified Tax Loopholes Act (S.2075) calls for ending offshore tax abuses. Title II calls for ending excessive corporate tax deductions for stock options:“U.S. multinational corporations can use a myriad of tax loopholes to keep their taxes far lower than their domestic competitors,” Levin’s office said in the memo. - Bloomberg, 2/4/13
Bloomberg's article breaks down the main points of Levin's act:
Options DeductionsOh, and it case you were wondering, Levin will make his announcement about his decision to run again very soon:
Levin’s proposal would require that corporations take stock option tax deductions at the time the options are shown in their expenses and would disallow deductions greater than the expense shown. Currently, corporations can deduct on their tax returns more than their actual expenses on stock options, the only type of compensation for which that is allowed, his office said.
That means corporations can report higher earnings to investors and reduce or eliminate those earnings on their tax returns. For example, he said, Facebook (FB) Inc. was able to book stock options given to its founder at six cents per share and later claim a tax deduction at $40 per share. Facebook was able to take a $16 billion tax deduction when it went public, and net loss carryforward rules will allow it to use the deduction to lower its tax bill for years, the senator’s office reported.
The legislation Levin envisions would end a favorable “blended tax rate” that applies to certain derivatives. According to his memo, the short term capital gain from some derivatives, including commodity futures, is not taxed at the long term capital gains rate, but at a blended rate of 60 percent long term and 40 percent short term, even if the derivatives are held for seconds. The lower rate reduces taxes by about 10 percent, his office reported.
Levin would end the exclusion of tar sands oil from the Oil Spill Liability Trust Fund, which he said would recognize that oil sands and other unconventional oils have become a more significant part of the nation’s commercial energy industry. As much as half of the oil shipped to the United States from Canada in 2012 was from tar sands, and 30 percent of Canadian oil produced in 2011 was from tar sands, Levin’s office reported.
Levin also proposed that hedge fund managers be required to pay ordinary income tax rates on all of their income from management services, ending a carried interest loophole.
The senator also promised more than a dozen provisions related to offshore tax havens and potential abuses, resembling a list he provided to Senate Finance Committee members in 2012.
His new proposal would penalize offshore financial institutions and jurisdictions that impede U.S. tax enforcement; defer tax deductions for corporations that move jobs and operations offshore until the corporation repatriates the profits from offshore operations and pays taxes on them; and treat offshore funds deposited in U.S. bank accounts as repatriated funds subject to taxes, among other provisions. - Bloomberg, 2/4/13
I'm not sure what decision Levin will make about 2014 but right now, he might a little focused on this:Spokesperson Tara Andringa tells the "Detroit Free Press" that just because Levin only raised a little over 13-thousand dollars doesn't mean he might not run again. She says the senator has said consistently he'd make his decision in the first few months of 2013, and she expects that "in the next few weeks."
Levin is 78 and is the chairman of the Senate Armed Services Committee. - WKZO, 2/5/13
The government is seeking $5 billion in its civil lawsuit against Standard & Poor's, accusing the ratings service of defrauding investors, in one of the most ambitious cases yet from the Justice Department over conduct tied to the financial crisis.
The United States said S&P inflated ratings and understated risks associated with mortgage securities, driven by a desire to gain more business from the investment banks that issued those securities. S&P committed fraud by falsely claiming its ratings were objective, the lawsuit said.
Senator Carl Levin, who led a year-long inquiry into the causes of the financial crisis and singled out credit raters for blame, said in a statement the public was "eagerly awaiting" legal actions tied to the financial crisis.
"The credit rating agencies have yet to acknowledge any blame or make the changes necessary to prevent conflicts of interest from fueling more inflated ratings in the future," the Democrat from Michigan said. - Chicago Tribune, 2/5/13