Facebook, the social network that began eight years ago in a Harvard dorm room, will debut Friday on the stock markets having raised $16 billion, making it the third largest initial public offering in U.S. history.

With massive press coverage and financial pundits sharply divided over whether the stock is a good buy, Facebook will initially trade at $38 per share under the symbol “FB.” At that price, the company’s value is $104 billion, larger than corporate stalwarts such as Walt Disney or McDonald’s.

With that much money at stake, Facebook’s market debut has been the buzz not only of Wall Street bankers and Silicon Valley investors, but also Washington policymakers concerned about what the firm is paying in taxes.

On Thursday, Sen. Carl Levin (D-Mich.) used the anticipation surrounding Facebook’s big day to talk again about why Congress needs to close loopholes in corporate tax law. Levin objected to Facebook’s decision to issue its employees options to buy company stock in the future at its original issuing price. If the stock goes up in value by the time employees use the option, the company can deduct the difference. In Facebook’s case, that deduction is estimated to be around $16 billion.

The company’s filings also say that the deduction could entitle Facebook to a refund of up to $500 million in corporate taxes during the first six months of 2013.

The senator said the fact that this is legal “shocks the conscience.” Facebook’s “ability to use a stock option loophole to zero out its U.S. tax bill, despite ample profits, makes no sense,” Levin said.

Even those no longer with the company are being used to illustrate what lawmakers say are additional problems with the country’s tax code.

Facebook co-founder Eduardo Saverin has come under fire from Sens. Charles E. Schumer (D-N.Y.) and Robert P. Casey Jr. (D-Pa.) for giving up his U.S. citizenship ahead of the company’s initial public offering.

The co-founder, a Brazilian native who left the company in 2005, said through a spokesperson that the move was for business purposes. But Saverin, who owns about 4 percent of Facebook shares worth at least $3 billion, could save millions in taxes. Singapore has no capital gains tax, meaning he would only pay taxes on the value of what he owned while the company was still private.

On Thursday, the lawmakers proposed a bill that targets individuals who renounce their U.S. citizenship for tax purposes.

Under the proposal, anyone who gives up their U.S. passport and has “either a net worth of $2 million or an average income tax liability of at least $148,000 over the last five years” will be assumed to have moved for tax purposes. They will be taxed 30 percent on future gains and, if they avoid paying the taxes, will be denied entry into the United States.

“We simply cannot allow the ultra-wealthy to write their own rules,” said Casey in a statement. “Renouncing citizenship to simply avoid paying your fair share is an insult to middle class Americans.”

Meanwhile, the state of California is eyeing Facebook’s stock sale as a tax jackpot.

The offering is worth so much money that it’s officially tallied in the state of California’s revised budget as a potential $2.1 billion windfall off of an expected $12 billion increase in personal income growth.

The amount Facebook raises Friday could climb to $18.4 billion with the inclusion of shares set aside to meet additional demand. The largest initial public offering in U.S. corporate history was General Motors at $20.1 billion in 2010, followed by Visa’s $19.7 billion debut in 2004.

The stock is also likely to see a first-day pop, said Motley Fool analyst Andrew Tonner. But he cautioned that Facebook hasn’t proven it can maintain and grow its revenue at a pace that justifies its initial public offering price.

“There are so many uncertainties with Facebook,” he said. “It could become a great business, but why risk your nest egg on something so untested?”

(Washington Post Co. Chairman Donald E. Graham is a member of Facebook's board.)