Zaraki KenpachiSenate 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.”
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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.
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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 2024, 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.”
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Those proposals are likely to reignite a familiar battle between centrist Democrats and the demands of the party’s progressive base that Sanders represents.
That fight was on display in the last reconciliation fight when Democrats failed to pass a $15 federal minimum wage. Just 42 Democrats voted for Sanders’ plan to increase wages, and his long-term plans for wealth redistribution and cutting fossil fuels are certain to meet similar objections.
When it comes to the minimum wage, Sanders says part of the challenge will be demonstrating that the Democratic Party is with him on the policy.
“There is not unanimity within the Democratic Caucus,” he said. “And my job is to rally the American people and to create a strategy.”
Some of that will involves creating pressure and spreading a message from the budget committee.
When it comes to taxes, part of that message is that tax increases help pay for all of the spending Democrats have passed or plan to approve in the future.
“I do worry about the deficit that we have and the national debt that we have,” Sanders said. “And I worry that we have a tax system, which is in many ways extremely rigged. So you have large, profitable corporations over the years pay zero in federal income tax. ”
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Some, like Sanders, have suggested increasing taxes to help pay for that spending. Reshaping the tax code is part of his broader effort to redistribute wealth in the country.
“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 of taxes,” he said. “At the end of the day, we need massive tax reform in this country, so that we end the tax loopholes and the giveaways that the wealthy and large corporations.”
As for when and how that gets done, Sanders says he isn’t making any specific demands. But passing tax hikes outside of reconciliation creates a familiar problem for Democrats — they simply do not have enough votes to do something like that in the Senate where most legislation requires 60 votes to overcome a filibuster.
That’s why Sanders says it’s time for the filibuster to end.
“As the Republican Party moves further and further to the right, their main task is obstructionism,” Sanders said. “And what we have got to say is that majority rules, when the American people want something when the House wants something, we cannot have just a minority of senators preventing us from moving so yes, I do support at this point, repealing the filibuster.”
But that’s another issue where Democrats aren’t unanimous — and they would need to be if they’re going to make a change.
Sanders himself used to be cautious about the ending filibuster. Doing away with the 60-vote requirement to pass legislation would give Republicans the chance to reverse policies and pass their own priorities if they controlled the Senate again.
“I think, in the best of all possible worlds, I would like to see a Senate where you can debate for long periods of time, etc., etc.,” he said. “But we’re not in the best of all possible worlds.”
Asked if this new chairmanship and the influence it affords means he is done running for president, Sanders laughed.
“Well,” he said. “I am very content being the chairman of the budget committee and Vermont senator right now.”
Hugh Hay
