Aiming to reorient a tax system he describes as fundamentally “rigged,” Sen. Bernie Sanders on Thursday morning is planning to unveil 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 overseas, and impose a new tax on ultra-wealthy estates.
The legislation will come as Sanders (I-Vt.) is set to preside 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 says to the wealthy and large corporations that they’re finally going to have to start paying their fair share.”
—Sen. Bernie Sanders
The first of Sanders’ two bills, according to NPR, 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 would also “end rules that allow companies to further reduce their tax bill by shifting operations offshore,” NPR reported Thursday morning.
The Vermont senator’s second bill would take aim at the soaring wealth of the top 0.5% of U.S. households. Under the legislation, NPR explained, “those with estates between $3.5 million and $10 million would be taxed at 45%, the rate would jump to 50% between $10 million and $50 million, 55% for estates over $50 million, and 65% for estates valued at over $1 billion.”
“What we need to do, in the midst of massive income and wealth inequality, when the rich are becoming much richer, while the middle class struggles, we need a tax system which says to the wealthy and large corporations that they’re finally going to have to start paying their fair share,” Sanders told NPR in an interview. “At the end of the day, we need massive tax reform in this country so that we end the tax loopholes and the giveaways to the wealthy and large corporations.”
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 positioned to have 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.”