Carl Levin

Well, isn't the tax that is being avoided the corporate tax which would be triggered if it was not qualified income under Section 851?

I would argue that we should have the debate that you have put on the table.

Does the IRS care about people circumventing our tax laws through the use of shell/sham corporations offshore?

So a Cayman corporation is not subject to U.S. tax or any other corporate income tax, so they can accumulate and invest money more quickly than corporations which do pay taxes.

Now, why do you think mutual funds are setting up these corporations offshore rather than here in the United States?

So now the question is whether or not they can avoid that impact by creating a shell corporation, which everyone agrees is a paper corporation with no business purpose, no economic purpose down in the Caymans.

Now, do you both agree that if a mutual fund bought and sold commodity futures or a commodity swap--in other words, if a mutual fund made a direct investment in commodities, the income from those investments would not qualify as income…

But you do agree that if they violated those income restrictions in that Tax Code Section 851, they would then have to pay the corporate income tax?

It is our joint intent that even though there may not be consensus on the effect of speculation, that there is consensus that our laws are intended to be followed

For 10 years now, this Subcommittee has focused attention on the problem of excessive speculation in the commodity markets.

We have been hurt at the pump, we have been hurt at the dinner table, and we have been hurt in our pocketbooks.

Thank you again for inviting me to testify. I look forward to responding to your questions.

Statement submitted by Senator Carl Levin

The U.S. military presence in Iraq was a source of recruitment for Iranian-backed extremist groups in Iraq.

It will be vitally important that the United States work with the Iraqi political leadership and the United Nations to ensure: (1) that those elections happen on time; and (2) that they are free, fair, and meet international standards.

The departure of U.S. forces has been characterized as the end of only the first chapter of what will be an enduring relationship with Iraq for many years to come.

Iraq's relationship with Iran is exceedingly complex and multifaceted.

Leaving Iraq on the terms dictated by its sovereign government will put to bed the very real perception that the United States invaded the country to transform it into its '51st state.'

You said you helped manage the negotiations on whether and how to extend the December 2011 deadline for the withdrawal of U.S. troops.

I do think we should take a long view of this thing.

I think there is a lot of concern in Congress about it, and this will, I believe in my opinion, severely negatively impact their relationship with the U.S. Congress.

We are not willing to wait any longer.

It cannot be the taxpayers of the United States.

We have to do something to inspect parts from China at the border because they are the predominant source of the counterfeiting.

We have to have a certification system in place for parts that do not come from the original manufacturer or their authorized dealer.