Sen. Bernie SandersBernie SandersManchin suggests pausing talks on .5 trillion package until 2022: report Yarmuth and Clyburn suggest .5T package may be slimmed Sanders calls deadly Afghan drone strike 'unacceptable' MORE (I-Vt.) on Thursday offered legislation aimed at preventing corporations from avoiding U.S. taxes.
"The truth is that we have a rigged tax code that has essentially legalized tax-dodging for large corporations," Sanders said during a press conference.
The bill comes as President Trump and congressional Republicans aim to pass tax reform legislation this year that lowers the corporate tax rate.
Sanders criticized Trump for saying during his address to Congress last week that U.S. corporations are taxed at one of the highest rates in the world. The senator said that most corporations pay less than the statutory corporate tax rate of 35 percent.
A report from the liberal Institute on Taxation and Economic Policy released Thursday found that Fortune 500 companies that were profitable each year between 2008 and 2015 had an average effective tax rate of 21.2 percent.
Sanders's bill would end the ability for corporations to defer paying U.S. taxes on their foreign earnings until the money is repatriated. Profits from U.S. companies that are currently held overseas would be taxed at a rate of 35 percent, and U.S. businesses would still be allowed to get tax credits for the taxes they pay to other countries.
The bill also includes provisions designed to limit the tax benefits of corporate inversions — transactions in which U.S. companies merge with foreign companies and then reincorporate overseas. Additionally, the legislation would prevent U.S. companies from claiming to be foreign companies if their management and operations are based in the U.S.
The House Republicans' tax reform blueprint takes a very different approach to corporate taxes than Sanders's bill. The blueprint would move to a "territorial" tax system that doesn't subject U.S. companies' foreign earnings to U.S. taxes. Additionally, it would lower the corporate tax rate to 20 percent.
Sanders previously introduced his bill in 2015. Sen. Brian Schatz (D-Hawaii) is co-sponsoring the legislation, and Rep. Jan Schakowsky (D-Ill.) offered a version of the bill in the House.
A summary of the bill states that the measure would likely raise at least $1 trillion over a decade.