July 26, 2013
Sen. Bernie Sanders on Friday laid out tax reform proposals in letters to Sens. Max Baucus and Orrin Hatch. He declined an offer by the chairman and ranking member of the Senate Finance Committee to keep his proposals secret. The leaders of the tax-writing committee solicited suggestions as part of a push to simplify the tax code. They also pledged to keep senators' suggestions secret for 50 years at the National Archives. Sanders said he has nothing to hide. "Given the fact that my suggestions represent the interests of the middle class of this country and not powerful corporate special interests, I have no problem with making them public." To read Sanders' letters, click here and here and here.
"Everyone understands that our current tax code is too complex and must be simplified, but at a time when the American population is aging and investments in our crumbling infrastructure are desperately needed, we must not provide more tax breaks to profitable corporations and wealthiest Americans who already are doing phenomenally well and in some cases pay nothing in federal income taxes," Sanders wrote to Baucus and Hatch.
Sanders is a member of the Senate Budget Committee and helped draft a resolution that the full Senate passed in March calling for $975 billion in new revenue over the next decade by closing tax loopholes that benefit the wealthy and large corporations. "That was a good start. I would go further," Sanders wrote in letters that spelled out specific proposals to:
- Stop profitable Wall Street banks and corporations from sheltering profits in the Cayman Islands and other tax havens to avoid paying U.S. taxes. Closing that tax loophole would reduce the deficit and create jobs that millions of Americans need.
- Establish a Wall Street speculation fee to ensure that large financial institutions pay their fair share in taxes. A fee of 0.03 percent on the sale of credit default swaps, derivatives, options, futures, and large amounts of stock would reduce gambling on Wall Street, encourage the financial sector to invest in the productive economy, and reduce the deficit by $352 billion over 10 years, according to the Joint Committee on Taxation.
- End tax breaks and subsidies for oil, gas and coal companies to reduce the deficit by more than $113 billion over the next 10 years. The five largest oil companies in the United States have made more than $1 trillion in profits over the past decade. Exxon Mobil is now the most profitable corporation in the world. Large, profitable fossil fuel companies do not need a tax break.
- Tax carbon and methane emissions that cause global warming. A bill by Sanders and Sen. Barbara Boxer (D-Calif.), the Senate environment committee chairman, would apply fee at coal mines, oil refineries, national gas processing plants and other sites. Imported fuels would be subject to equivalent carbon fees. Some of the revenue would be returned to consumers and some would pay for investments in energy efficiency, sustainable energy, worker training and deficit reduction.
- Tax capital gains and dividends of the wealthiest 2 percent at the same rate as ordinary income to yield about $500 billion over the next decade. Today, the wealthy obtain most of their income from capital gains and dividends taxed at a much lower rate than work. The top marginal income tax for working is 39.6 percent, but the top tax rate on corporate dividends and capital gains is only 20 percent. That is not fair.
Enacting all of these proposals would raise more than $1.8 trillion in new revenue over the next decade. "I look forward to working with you to reform the tax code in a way that protects the middle class, working families, and the most vulnerable while making sure that the wealthiest Americans and most profitable corporations pay their fair share," Sanders wrote to Baucus and Hatch.