Democratic Senator Wants Corporate Tax Revenue Included In Budget Deal

There have been lots of ideas kicked around for inclusion in a deal that would avert the so-called “fiscal cliff,” the tax increases and spending cuts scheduled for year’s end. But Democratic Sen. Carl Levin (MI) wants one more item placed onto the table — corporate tax revenue:

Sen. Carl Levin (D-Mich.) pushed Friday for including tens of billions of dollars in additional revenues from corporations into any year-end tax-and-spending deal. [...]

On the Friday call, Levin said that he wanted the elimination of corporate tax breaks to be an immediate revenue-raiser in a deal, or that a commitment to end those incentives be part of a broader, long-term deal.

The Michigan Democrat also said that wringing some $200 billion to $300 billion out of corporations would be sufficient in a broader deal.

Corporate tax revenue is currently below its historic average, even though corporate profits are at an all-time high. The corporate income tax used to track reasonably well with the rise and fall of corporate profits, but has become decoupled in the last few decades due to the proliferation of credits, deductions, and loopholes, and the growing use of offshore tax havens, as this chart shows:

Last year, the effective tax rate paid by American corporations fell to 12.1 percent, a forty-year low.