Van Hollen, Sanders, and Colleagues Introduce Legislation to End Rigged Tax Code as Inequality Increases
continued effort to combat rising economic inequality, Sens. Chris Van Hollen
(D-Md.) joined Sen. Bernie Sanders (I-VT) on
Thursday in introducing two pieces of legislation
to end our rigged tax code and ensure the wealthiest people and largest
corporations pay their fair share – the For the 99.5% Act and
the Corporate Tax Dodging Prevention Act.
Sens. Kirsten Gillibrand (D-N.Y.), Sheldon Whitehouse (D-R.I.), and Jack Reed (D-R.I.) are joining Sens. Van Hollen and Sanders as original cosponsors of the For the 99.5% Act in the Senate, which has garnered the support of over 50 national organizations. In the House, the companion estate tax legislation will be introduced by Rep. Jimmy Gomez (D-Calif.), while Rep. Jan Schakowsky (D-Ill.) will introduce the bill on offshore corporate tax dodging.
The For the 99.5% Act is a progressive estate tax on the fortunes of the top 0.5 percent of Americans, while the Corporate Tax Dodging Prevention Act will eliminate tax breaks and loopholes that encourage corporations to shift jobs and profits offshore. This comes a week after the reintroduction of the Tax Excessive CEO Pay Act, and ahead of today’s 11:00 a.m. Senate Budget Committee hearing on “Ending a Rigged Tax Code: The Need to Make the Wealthiest People and Largest Corporations Pay Their Fair Share of Taxes.”
“We need an economy that works for all Americans, not just the wealthiest few,” said Sen. Van Hollen. “With inequality skyrocketing and the pandemic making it harder and harder for folks to find work, it’s critical that we implement policies that will put everyday people first. This legislation will ensure America’s billionaire heirs contribute more to support national investments that will benefit all Americans and build a more inclusive economy with more shared prosperity.”
“Unbelievably, the United States today has more income and wealth inequality than almost any major country on Earth,” said Sen. Sanders. “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. 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.”
“As everyday New Yorkers struggle to put food on the table, and keep a steady check in their bank accounts, it’s time the uber wealthy pay their fair share to get New York, and our country, on a sustainable path towards recovery,” said Sen. Gillibrand. “I am proud to be an original cosponsor of the For the 99.5% Act, a common-sense piece of legislation to make sure Congress is doing everything possible to assist struggling Americans across the country.”
“The wealthiest Americans ought to pay their fair share when they receive big inheritances,” said Sen. Whitehouse. “We need a tax system that’s fair, simple, and doesn’t let the ultra-rich avoid this responsibility of citizenship.”
“The tax system needs plenty of changes to restore confidence and fairness,” said Sen. Reed. “This bill sends a strong signal that tax avoidance damages our democracy. It offers a simple, targeted solution that will restore fairness to the tax code by closing inheritance tax loopholes and ensuring working people aren’t paying higher tax rates than the very wealthiest.”
“The expansion of the estate tax represents one of our country’s most effective tools in rebuilding our economy to work for all Americans,” said Rep. Jimmy Gomez. “For far too long, ultra-rich families have used our tax code to acquire mass amounts of wealth as working Americans, especially those of color, have fallen further behind. The For the 99.5% Act – which I’ll soon be introducing in the House of Representatives – would substantively strengthen the estate tax and help restore fairness and equity to our nation’s tax code. I’d like to thank Senator Bernie Sanders for partnering with me in our joint efforts to uplift America’s working class and help provide them with new opportunities to thrive and support their families.”
“For decades, Americans have been told that trickle-down economics would lead to shared prosperity,” said Rep. Schakowsky. “That didn’t materialize, and we have seen the middle class hollowed out, and the bottom fall out on the working poor. The American Rescue Plan represented a sea change after years of misguided policies, and the Corporate Tax Dodging Prevention Act is the next logical step towards the Federal government putting the American people ahead of billionaires and transnational corporations. I thank Senator Sanders for devoting his career to tackling income inequality, and am proud to partner with him on this important measure.”
the 99.5% Act establishes a new progressive estate tax rate structure on
the top 0.5% of Americans who inherit over $3.5 million in wealth. This bill
also includes ending tax breaks for dynasty trusts; closing other loopholes in
the estate and gift tax; and providing protections for family farmers by
allowing them to lower the value of their farmland by up to $3 million for
estate tax purposes.
Ninety-nine and a half percent of Americans would not owe a penny more in taxes under this bill, but the families of all 657 billionaires in America – who have a combined net worth of over $4.2 trillion – would owe up to $2.7 trillion in estate tax. Specifically, this legislation 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.
This is not a radical idea. In fact, from 1941-1976, the top estate tax rate was 77% on estates worth more than $50 million. According to the Joint Committee on Taxation, this bill would raise $430 billion through 2031.
Under this bill:
- The Walton family, the owners of Walmart, worth would pay up to $85.8 billion more in taxes on their $221.5 billion fortune.
- The family of Jeff Bezos, the founder of Amazon, would pay up to $44.4 billion more in taxes on his $178 billion fortune.
- The family of Elon Musk would pay up to $40.4 billion more in taxes on his $162 billion fortune.
- Facebook CEO Mark Zuckerberg’s family would pay up to $25.3 billion more in taxes on his $101.7 billion fortune.
Tax Dodging Prevention Act would raise over $2.3 trillion in revenue by
preventing corporations from shifting their profits offshore to avoid paying
U.S. taxes. It would also restore the top corporate tax rate to 35% – where it
was before Trump became president.
Today, corporations are paying as little as nothing on profits they claimed to make overseas. The situation has become so absurd that one five-story office building in the Cayman Islands is the “home” to about 20,000 corporations.
A year after Trump’s Republican tax bill was signed into law, over 90 Fortune 500 companies not only paid nothing in federal income taxes, they actually received billions of dollars in tax rebate checks from the IRS. For example, in 2018:
- Amazon received a $129 million check from the IRS after making $10.8 billion in profits.
- Delta received a $187 million check from the IRS after making $5.1 billion in profits.
- Chevron received a $181 million check from the IRS after making $4.5 billion in profits.
This would change under the Corporate Tax Dodging Prevention Act as it stops corporations from sheltering profits in tax havens like Bermuda and the Cayman Islands, and would end rewards for companies that ship jobs and factories overseas with tax breaks. Additionally, this bill would reform the tax code by:
- Ending the rule allowing American corporations to pay a lower or zero percent tax rate on offshore earnings compared to domestic income;
- Closing loopholes allowing American corporations to shift income between foreign countries to avoid U.S. taxes;
- Repealing the “check-the-box” and “CFC Look-Thru” offshore loopholes;
- Preventing multinational corporations from stripping earnings out of the U.S. by manipulating debt expenses; and
- Preventing American corporations from claiming to be foreign by using a tax haven post office box as their address.
to the Joint Committee on Taxation, just the offshore loophole closing portions
of this bill would raise over $1 trillion billion through 2031.
The For the 99.5% Act
• Read the bill, here.
• Read the bill summary, here.
• Read the JCT score of the bill, here.
• Read the letter of support of over 50 national organizations, here.
The Corporate Tax Dodging Prevention Act
• Read the bill, here.
• Read the bill summary, here.
• Read JCT score of the offshore portion of the bill, here.
Next Article Previous Article