Politico: 'Revenue-neutral' tax reform takes hit

By Lauren French and Joseph J. Schatz
Politico, 12/14/12

Some liberals are putting corporations on notice: A tax reform next year could cost you.

Sen. Carl Levin predicted Friday that the Democrat-controlled Senate would not pass a corporate overhaul if it doesn’t raise hundreds of billions of dollars on companies — taking issue with the widely held notion that a corporate tax re-write should be “revenue-neutral.”

Levin’s comments came as the two parties try to reach a deal to avert the looming fiscal cliff and possibly set up a process for overhauling the tax code next year. ...

More than 600 business owners told Congress and Obama today that switching to a territorial tax system, which many corporations and Republicans support, would give an unfair advantage to multinational companies at a time when “all businesses — large and small — should contribute responsibly toward the costs of government and the well-being of the economy.”

The letter is part of a lobbying push by the American Sustainable Business Council, Business for Shared Prosperity and the Main Street Alliance to promote the businesses’ view that the corporate tax system disproportionately benefits large businesses that take advantage of tax “loopholes” and that any reform effort should work to correct that imbalance.

Closing corporate credits and deductions would bring in $100 billion annually, according to the letter-writers — money that should be used, they said, to pay down the debt. They propose keeping the current worldwide tax system in place but with major reforms to end tax provisions that allow corporations to establish shell companies in countries known for tax havens, like Bermuda.

Copyright 2012 Politico