The Sanders Corporate Tax Reform Plan

In the recent post, "How The Clinton and Sanders Infrastructure Plans Measure Up," I mistakenly wrote that candidate Bernie Sanders does not yet have a corporate tax proposal:

"Clinton's infrastructure plan says only that it will be paid for through 'business tax reform.' It does not detail the nature of the reforms that would pay for this spending. Similarly, Sanders does not yet have a specific individual and corporate tax proposal, but he has proposed a financial transaction tax and says he will close loopholes."

Oops. It turns out that Sanders does have a detailed corporate tax plan to pay for his infrastructure plan. He introduced the plan as a Senate bill shortly before announcing his run for the Democratic nomination for President. It is called the Corporate Tax Dodging Prevention Act. So let's take a look at it.

Elizabeth Warren's Principles For Corporate Tax Reform

First, though, that infrastructure post references Elizabeth Warren's speech in which she laid out some criteria for evaluating the candidates' plans. Summarizing:

1) Increase the share of revenue that corporations pay. ... any "revenue neutral" plan leaves the country with too little money to fund basic services.

2) Level the playing field between small and big businesses. The business tax code is rigged against small businesses, making it harder for them to compete.

3) Promote investment and jobs in the U.S. Lower tax rates and loopholes for hiding profits overseas encourages more outsourcing of jobs and investment.

Also, there is the question of how the candidates treat the huge stash -- more than $2.1 trillion -- of corporate profits being hoarded in tax havens. Do they propose that these corporations pay the taxes they owe? Or do they offer these companies cash reward for having dodged taxes, if only they would please let We the People have some of the revenue we are owed?

Sanders' "Corporate Tax Dodging Prevention Act"

Senator Bernie Sanders Corporate Tax Dodging Prevention Act is summarized in an April 14 Senate Budget Committee blog post, (Sanders is the ranking member of that committee.)

1) Ending the rule allowing American corporations to defer paying federal income taxes on profits of their offshore subsidiaries.

This would immediately bring in up to $620 billion of federal tax revenue currently owed on "offshore" profits but deferred. (It would also make available in the US more than $2 trillion of corporate profits that have been kept offshore, which could be reinvested or distributed to shareholders.)

Additionally, this would increase federal tax revenue by as much as $90+ billion each year thereafter.

These amounts are based on a report from Citizens for Tax Justice (CTJ) and the U.S. PIRG Education Fund, titled "Offshore Shell Games."

A second look at the amounts owed by these companies, detailed in a letter to Congress titled, 24 International Tax Experts Address Current Tax Reform Efforts in Congress sets the amount this would bring in at ... "about $900 billion over 10 years."