[Congressional Record Volume 158, Number 20 (Tuesday, February 7, 2012)]
[Senate]
[Pages S389-S390]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEVIN (for himself and Mr. Conrad):
  S. 2075. A bill to close unjustified corporate tax loopholes, and for 
other purposes; to the Committee on Finance.
  Mr. LEVIN. Mr. President, today, along with Senator Conrad and 
others, I am introducing S. 2075, the Cut Unjustified Tax Loopholes 
Act, or CUT Loopholes Act. This legislation will help us meet three 
important goals: Reducing the budget deficit, protecting important 
priorities, and restoring some of the fairness to our tax system.
  Our legislation would reduce the deficit by $155 billion. It would do 
so by closing tax loopholes that favor wealthy individuals and 
corporations while raising the tax burden that American families must 
carry. It would provide more than enough revenue to pay for a full-year 
extension of the payroll tax cut now in place, or put a significant 
dent in the deficit reduction we need to avoid draconian automatic cuts 
through sequestration.
  It is clear to almost everyone that revenue must be a part of our 
deficit reduction strategy. Presidents from Reagan to Bush, Sr. to 
Clinton have used balanced strategies that included revenue as well as 
spending cuts.
  I will continue to fight for a number of other revenue measures such 
as a surtax on millionaires and billionaires; eliminating tax subsidies 
for oil and gas companies; ending the Bush-era tax cuts for those 
earning more than $250,000; and ending the carried interest loophole. 
We need to make those changes. But so far, they have run into an 
ideological brick wall, as many here in Congress refuse to consider 
reasonable revenue measures. But even that rigid ideological stance 
should allow for ending the kinds of egregious loopholes we are 
discussing today.
  First is offshore tax haven abuse. The Permanent Subcommittee on 
Investigations, which I chair, has spent years shedding light on how 
these abuses aid the wealthy and corporations. Based in part on S. 
1346, the Stop Tax Haven Abuse Act, our bill would, in part: Give 
Treasury the authority to combat tax haven banks and jurisdictions that 
help U.S. clients hide assets and dodge U.S. taxes; crack down on 
offshore corporations that are managed from the U.S. from claiming 
foreign status to dodge taxes; eliminate tax incentives for moving U.S. 
jobs overseas or for transferring intellectual property offshore; and 
establish the presumption that, unless a taxpayer proves otherwise, a 
corporation formed by, receiving assets from, or benefiting a U.S. 
taxpayer is considered under that taxpayer's control for tax purposes.
  These provisions and others would reduce the deficit by at least $130 
billion over 10 years.
  Our bill's second focus is on a tax loophole that subsidizes 
corporations giving stock options to corporate executives. Today, 
corporations can take massive tax deductions for stock options, but 
usually show much lower expense on their books. Our subcommittee found 
that from 2005-2009, this loophole allowed excess tax deductions 
ranging from $12 billion to as high as $61 billion in a single year.
  The CUT Loopholes Act would prevent corporate income tax deductions 
for stock options that exceed the expense shown on company books. It 
would preserve current tax treatment for individuals receiving options 
and

[[Page S390]]

for incentive stock options used by start-up companies.
  According to the Joint Committee on Taxation, these measures would 
reduce the deficit by $25 billion over 10 years.
  The time for these measures is now.
  First, the math is inescapable. We can't reduce the deficit and do 
other important things--protect our country, care for our seniors, 
educate our young--if tax revenue remains at its lowest level in 
decades, and if the effective corporate tax rate is at historic lows, 
thanks in part to these and other tax loopholes.
  Second, there is a growing recognition among Americans that loopholes 
like these and many others leave the deck stacked against them and 
their families. Overwhelmingly Americans tell us: Close those loopholes 
down.
  Third, this is not just a realization by Democrats. Strong majorities 
of Independents and Republicans say that we need balanced deficit 
reduction, and that closing loopholes is one way to do that. Just this 
week, a national poll showed that 90 percent of small business owners--
a majority of them Republicans--believe big corporations use loopholes 
to avoid taxes that small businesses still have to pay.
  Reducing the deficit and protecting important programs is hard. We 
face many tough decisions and difficult fights in the months ahead.
  But this decision should be easy. We should close these loopholes and 
make a bipartisan statement that we can reduce the deficit, serve 
important priorities, and restore fairness to the tax code.
                                 ______