“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.” Senator Sanders’s tax package includes an end to the practice of “offshoring” the profits of US-based companies by depositing them in banks like the ones here, thus avoiding US taxation unless and until those profits are brought back to the United States. It would be a major loss of business for Panama’s banking district. Photo by the Superintendencia de Bancos.
Sanders takes aim at “rigged” US tax system
by Jake Johnson — Common Dreams
Aiming to reorient a tax system he describes as fundamentally “rigged,” Senator Bernie Sanders on Thursday unveiled a pair of bills that would restore the corporate tax rate to 35%, eliminate rules that allow US 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 US 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.
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, would also bar companies from shifting their profits offshore to avoid US taxes.
The Vermont senator’s second bill, the For the 99.5% Act, 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’s 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.”
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