First implemented by the United States during the first and second World Wars and the Korean War, Sen. Bernie Sanders’ legislation models the tax rate that reached 95 percent in WWII to ensure that companies could not profiteer off the war. The legislation, which was introduced in the Senate on Friday, would impose a 95 percent windfall tax on the excess profits of major companies.
The temporary emergency measure, which is part of Sanders’ Ending Corporate Greed Act, “could raise an estimated $400 billion in one year from 30 of the largest corporations alone and would apply only in 2022, 2023, and 2024,” according to a press release. Sanders said it will combat rising inequality, inflation, and corporate profiteering.
“We cannot allow big oil companies and other large, profitable corporations to continue to use the war in Ukraine, the COVID-19 pandemic, and the specter of inflation to make obscene profits by price gouging Americans at the gas pump, the grocery store, or any other sector of our economy,” Sanders said.” During these troubling times, the working class cannot bear the brunt of this economic crisis, while corporate CEOs, wealthy shareholders, and the billionaire class make out like bandits.”
According to Bernie Sanders: U.S. Senator for Vermont website, the Ending Corporate Greed Act would:
- Maintain the existing 21 percent corporate tax on a company’s profit equal to or less than pre-pandemic levels.
- Establish a 95 percent windfall profits tax on a company’s profits that are in excess of their average profit level from 2015-2019, adjusted for inflation.
- Apply only to large companies with $500 million or more in revenue annually.
- Be limited to 75 percent of income in the current year.
- Be a temporary emergency measure, applying only in 2022, 2023, and 2024.
While the 95 percent windfall profits tax is on profit, not revenue, “companies would still be able to make a reasonable profit compared to previous years,” according to a press release. Companies who raise prices for “legitimate reasons” such as rising expense won’t be affected by the legislation, but companies that are in pursuit of “profiteering” would be subject to a tax of up to 95 percent on their windfall profits.
“The American people are sick and tired of the unprecedented corporate greed that exists all over this country,” Sanders said. “They are sick and tired of being ripped-off by corporations making record-breaking profits while working families are forced to pay outrageously high prices for gas, rent, food, and prescription drugs.”
Sen. Ed Markey (D-Mass.) is cosponsoring the legislation in the Senate, while Rep. Jamaal Bowman (D-N.Y.) will introduce joint legislation in the House of Representatives.
“The time has come for Congress to work for working families and demand that large, profitable corporations make a little bit less money and pay their fair share of taxes,” Sanders said.
To read the full bill text, click here.