Aiming to reorient a tax system he describes as fundamentally "rigged," Sen. Bernie Sanders on Thursday unveiled a pair of bills that would restore the corporate tax rate to 35%, eliminate rules that allow U.S. companies to skirt their obligations by moving profits overseas, and impose new taxes on ultra-wealthy estates.
The legislation came just before Sanders (I-Vt.) presided over a Senate Budget Committee hearing on possible solutions to deep inequities in the U.S. tax code, which former President Donald Trump and the Republican Party made even more friendly to the rich and large corporations in 2017 by passing the deeply unpopular Tax Cuts and Jobs Act.
"We need a tax system which demands the billionaire class pay its fair share of taxes and which reduces the obscene level of wealth inequality in America."
—Sen. Bernie Sanders
The first of Sanders' two bills would reverse a key element of the Trump-GOP tax law by raising the corporate rate from 21% to 35%, where it was prior to the 2017 cut. The legislation, titled the Corporate Tax Dodging Prevention Act (pdf), would also bar companies from shifting their profits offshore to avoid U.S. taxes.
The Vermont senator's second bill, the For the 99.5% Act (pdf), would take aim at the soaring wealth of the top 0.5% of U.S. households. The legislation, Sanders' office explained, "would impose a 45% tax rate on estates worth $3.5 million and a 65% tax rate on the value of an estate worth over $1 billion."
"Unbelievably, the United States today has more income and wealth inequality than almost any major country on Earth," Sanders said in a statement. "This inequality has only deepened with the economic crisis brought on by Covid and by a tax system that allows for billionaires to pay less in taxes than working people across the country."
"From a moral, economic, and political perspective, our nation will not thrive when so few have so much and so many have so little," the Vermont senator added. "We need a tax system which demands the billionaire class pay its fair share of taxes and which reduces the obscene level of wealth inequality in America."
Sanders' proposals come as President Joe Biden is reportedly considering tax hikes on the rich and corporations to help finance a forthcoming infrastructure plan. According to the Washington Post, White House officials have discussed raising the corporate tax rate to 28%—well short of Sanders' 35% proposal—and increasing the top marginal tax rate for individuals from 37% to 39.6%.
As chairman of the Senate Budget Committee, Sanders is well-positioned to exert significant influence over the infrastructure package, particularly if Democrats opt to push the legislation through the filibuster-proof budget reconciliation process—which seems likely, given GOP opposition.
"The second reconciliation bill will deal with long-term structural problems that we've had in this country long before the pandemic," Sanders told NPR. "We need to build millions of units of low-income and affordable housing. We must address the crisis of climate change and transform our energy system away from fossil fuel. And when we do those things, deal with infrastructure, deal with climate, we can in fact create many, many millions of good-paying jobs."