Senate liberal to Obama: Act on tax breaks

One of the Senate’s most prominent liberals is urging President Obama to slash corporate tax breaks by executive action.

{mosads}Sen. Bernie Sanders (I-Vt.) said that rolling back six provisions could raise more than $100 billion over a decade for the Treasury. In a letter to Treasury Secretary Jack Lew, Sanders said he was imploring the Obama administration to act because Republicans have made it clear they won’t.

The provisions that Sanders called out include the so-called “check the box” rules that essentially allow multinational corporations to shield profits from being taxed by any government.

Sanders also called on Obama to end the tax break for carried interest that allows hedge fund managers to largely pay the lower capital gains tax rate, and to do more to stop the offshore tax deals known as inversions.

“Our nation has never, in the past five decades, balanced a budget with revenue levels as low as they are projected to be,” Sanders, the ranking member on the Senate Budget Committee, wrote to Lew on Friday.

“This list is not intended to be exhaustive but rather to illustrate that if Congress fails to act, the administration can act to resolve some of the problems with our tax code,” the Vermont senator added.

Sanders’s letter comes as Congress remains locked in a battle over funding the Homeland Security Department, after passing a one-week stopgap measure on Friday. Conservative lawmakers have sought to use a Homeland Security funding measure to impede Obama’s executive actions on immigration.

But Sanders wants the administration to make more use of executive action. He told Lew on Monday that three of the provisions on his list – the check the box rules, rules that allow companies to make tax-free loans from offshore subsidiaries and the use of real estate investment trusts to avoid corporate taxes – were put into place by regulation, and can be ended that way.

Sanders added that he believes the administration can deal with the other three – the carried interest rule, so-called “earnings stripping” rules that make inversions more attractive and valuation discount rules that lower estate tax obligations – under Treasury’s power to regulate U.S. tax laws.

Lew has said that the administration is examining what other steps it can take on inversions, but that a broader overhaul of the tax code is the only way to truly fix the problem.

Republicans have said they’re willing to consider rolling back tax breaks like those mentioned by Sanders, but only as part of tax reform.