On Friday, Sen. Bernie Sanders (I-Vermont) introduced a bill that would capture nearly all of the excess profits being raked in by major U.S. corporations as they exploit ongoing crises to pad shareholders’ and executives’ pockets.
The Ending Corporate Greed Act would levy a 95 percent tax on excess profits for corporations that make more than $500 million in yearly revenue until 2024, and would apply to about 30 top companies. The bill, cosponsored by Sen. Ed Markey (D-Massachusetts) and introduced by Rep. Jamaal Bowman (D-New York) in the House, would raise an estimated $400 billion in one year.
Unlike recent windfall tax proposals, Sanders’s bill would target not only the oil and gas industry but all other large corporations in the country, including Amazon, Starbucks, Blackstone and Pfizer.
The legislation is inspired by windfall profits taxes that were enacted during the first and second World Wars and the Korean War; during WWII, the tax rate reached 95 percent in order to prevent war profiteering. As Sanders’s press release on the bill points out, the U.S. enacted a windfall profits tax on oil and gas companies in the 1980s after the government temporarily implemented price controls on oil during the energy crisis of the 1970s.
“The American people are sick and tired of the unprecedented corporate greed that exists all over this country. 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,” Sanders said in a statement.
“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,” he continued.
Profits that are higher than average profits from pre-pandemic years would be subject to the tax, and wouldn’t be subject to revenues to ensure that companies aren’t punished for raising prices for legitimate reasons.
Last year, major corporations like Chevron, Apple and Moderna made tens of billions of dollars more than they did in pre-pandemic years; between 2015 and 2019, Amazon made an average of $6.9 billion in profits a year, but the company’s profits skyrocketed to $38.2 billion in 2021.
The bill would discourage companies from raising prices in order to pad profits, a practice that has run rampant in recent years as companies take advantage of the COVID economy and the Russian invasion of Ukraine.
Sanders’s bill is similar to previous Democratic proposals in that it targets corporate windfall profits as those profits are soaring, but it goes much further in its scope and size.
Previous bills have only targeted oil and gas companies; one proposal by Rep. Peter DeFazio (D-Oregon) would tax Big Oil’s income in 2022 at only 50 percent above companies’ average pre-pandemic incomes. Rep. Ro Khanna (D-California) and Sen. Sheldon Whitehouse’s (D-Rhode Island) windfall tax bill would subject crude oil barrels imported or produced to a 50 percent tax on the difference between current prices and average pre-pandemic prices.
Progressive advocates and economists say that Sanders’s bill is necessary to protect customers from being fleeced by companies that are seeking to fill executives’ and shareholders’ wallets. The bill has been endorsed by organizations like the Economic Policy Institute and the Sunrise Movement.
“The Covid pandemic, and now war in Europe, have caused immense suffering — but also prosperity for a few giant corporations,” said University of California, Berkeley economist Gabriel Zucman. “In the past, the United States has successfully used excess profits taxes to remedy this unfairness. Senator Sanders’s bill reconnects with this distinguished tradition, for the benefit of us all.”