Sen. Carl Levin (D-Mich.) derided Facebook’s initial public offering tomorrow as “a day in tax history” when it will see “the largest tax deduction ever taken by any corporation exploiting the stock option tax loophole.”
Speaking on the Senate floor today, Levin said that the social media network is planning to use stock option tax deductions, “not only to help it avoid future taxes for years and years to come, but to get a refund of taxes it’s already paid.”
“Facebook’s recent registration statement shows that, due to hundreds of millions of stock options handed out to its founders and top executives, it plans to claim stock option tax deductions worth a whopping $16 billion,” Levin said. “That’s more than twice as much as estimates a few months ago, and many, many times larger than the stock option expenses shown on Facebook’s ledgers.”
He urged consideration of his Ending Excessive Corporate Deductions for Stock Options Act, introduced last summer with Sen. Sherrod Brown (D-Ohio).
“As with so much of our tax code, it’s not the law-breaking that shocks the conscience, it’s the stuff that’s allowed,” Levin added. “…Facebook is an American success story. Its ability to use a stock option loophole to zero out its U.S. tax bill, despite ample profits, makes no sense. It also isn’t fair to the rest of American taxpayers who will have to pay more because Facebook pays nothing.”
The senator later called the $16 billion deduction “the biggest Mack truck ever driven through the stock option loophole.”