The U.S. government loses $37 billion per year in tax revenues because multinational corporations stash money in overseas tax havens, Democratic Senator Carl Levin and a group of small businesses said in a report on Tuesday.

Levin, who for years has pushed for a tough law to fight tax evasion among corporations, has enlisted some small businesses to back his so-far unsuccessful proposal to close loopholes letting companies legally avoid taxes by keeping income abroad.

There are too many small businesses now paying more than their fair share, Levin told reporters on a conference call. It creates a very unfair competitive situation.

Levin wants to attach some of his proposals to help fund a bill that sets up a $30 billion fund for small business. Levin has tried to attach his initiative to other bills in the past without success.

The coalition of small companies favors banning the use of overseas tax havens, which are generally unavailable to smaller firms.

We pay our taxes and don't run off to greener pastures, said Frank Knapp, president of the South Carolina small business chamber of commerce.

The coalition says about several hundred businesses have signed onto a petition requesting action on legislation like that sponsored by Levin.

Policy changes sought include a ban on transferring intellectual property abroad to evade taxes, and repeal of a rule letting companies pay no U.S. taxes when 80 percent of their revenue is earned overseas.

(Additional reporting by Diane Bartz, editing by Gerald E. McCormick)