Bernie: Reshaping A 'Rigged' Tax System
By KELSEY SNELL
Senate Budget Committee Chairman Bernie Sanders, I-Vt., is turning the committee best known for writing budgets that never become law into a vetting ground for progressive policy.
Sanders views his new jurisdiction as a broad mandate that "essentially in one way or another, touches the lives of every American." In keeping with that vision, Sanders will introduce a pair of bills on Thursday to restore the corporate tax rate to 35% and add a new progressive tax on the estates of the wealthiest Americans.
"What we want to do is use the committee to focus on the crises facing the working class of this country, the middle class of this country, talk about issues like income and wealth inequality, talk about the mass amounts of tax avoidance and tax breaks that the very wealthiest people in this country, talk about student debt, talk about how much it will cost us if we do not address the existential threat of climate change," Sanders said in an interview with NPR. "In other words, look at the major issues facing our country and focus a spotlight on them."
Sanders is introducing the bills, both of which face long odds in the closely divided Senate, as part of a broader push to walk back tax cuts that were enacted under former President Donald Trump and to go further in redistributing the tax burden to corporations and the wealthy.
The first bill would restore the corporate tax rate to 35%, undoing a cornerstone of Trump's 2017 tax overhaul. Republicans cut the corporate rate to 21% in that bill, a move that Joint Committee on Taxation valued at $1.3 trillion over 10 years.
The bill would also end rules that allow companies to further reduce their tax bill by shifting operations offshore.
A second bill would add a new way to tax the wealthiest estates in the country. Sanders says the bill is aimed at the fortunes of the top 0.5%. It would exempt the first $3.5 million of an individual's estate from the estate tax, $7 million for married couples.
Those with estates between $3.5 million and $10 million would be taxed at 45%, and 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.
The focus on taxes comes weeks after President Biden signed $1.9 trillion in new coronavirus relief spending into law. That bill, which Sanders helped move through the Senate, included billions for unemployment insurance, housing vouchers, rent assistance, stimulus checks and direct aid to millions of people.
Democrats, who control 50 votes in the Senate, passed the legislation without any GOP votes using a budget tool called reconciliation. That process requires just 51 votes to pass and Democrats can muster those votes if they have unanimous agreement and call in Vice President Harris to break the tie.
Congress gets one shot at reconciliation each time they pass a budget — which they can only do once every fiscal year which runs from Oct. 1 to Sept. 30 each year.
They have two chances this year because Trump did not pass a budget in fiscal year 2020, and Democrats took the opportunity to pass one of their own when they took over in January.
Sanders now oversees reconciliation as Budget Committee chair, and he is already contemplating what the second bill should include.
"The second reconciliation bill will deal with long-term structural problems that we've had in this country long before the pandemic," Sanders said.
That includes spending on traditional infrastructure programs, like roads, bridges, water systems and wastewater. But Sanders says it should also include climate change and social programs like affordable housing.
"We need to build millions of units of low income and affordable housing," he said. "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."