What Does Sanders’ Proposed Law Mean for the Estate Tax?
In late March of 2021, Senator Bernie Sanders (I-VT) proposed two bills in the United States Senate. The first bill would return the corporate tax rate to 35%, which is where that rate had stood before the Republicans’ 2017 tax law. The current corporate tax rate is 21%, and it has only been that low for less than four years. Already, however, the U.S. Treasury has lost a great deal of revenue to depleted corporate taxes.
The other bill is a progressive estate tax. This tax is aimed at the wealthiest families in the U.S. No estates below $3.5 million would be impacted. For estates between $3.5 million and $10 million, it would begin with a 45% tax. For estates worth more than a billion dollars, that estate tax rate would go up to 65%. For married couples, nothing below $7 million would be subject to this tax.
“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 enjoy,” said Sen. Sanders in an NPR interview. “In other words, look at the major issues facing our country and focus a spotlight on them.”
That progressive estate tax is aimed at only the top 0.5% of US family fortunes, according to Sanders.
As chair of the Budget Committee, Sanders oversees the use of reconciliation. Already this year, Senate Democrats used reconciliation to pass the $1.9 trillion bill concerning spending for coronavirus relief. Usually, the Senate can only use reconciliation once in any fiscal year, but since Trump did not pass a budget in 2020, the Senate has two reconciliation chances to use this year.