Sen. Bernie Sanders, I-Vermont, and Ed Markey, D-Massachusetts, are introducing legislation in the Senate to impose a 95% windfall tax on the excess profits of large corporations that are overcharging for the products they sell.
The Ending Corporate Greed Act would have raised an estimated $300 billion in 2023 from 10 of the largest corporations alone. A companion bill was introduced Friday in the House by Rep. Jamaal Bowman, D-New York.
The legislation is modeled after the windfall profits tax levied by the federal government during World War I and II and the Korean War. During World War II, the tax rate reached 95% to deter companies from engaging in war profiteering. The U.S. also enacted a windfall profits tax on oil and gas companies during the mid-1980s. The tax aims to deter companies from blaming inflation as an excuse for overcharging consumers.
The bill would maintain the existing 21% corporate tax on a company's profit equal to or less than pre-pandemic levels. It would also establish a 95% windfall profits tax on a company's profits that are in excess of their average profit level from 2015-2019, adjusted for inflation. The windfall profits tax would apply only to large companies with $500 million or more in revenue annually and would be limited to 75% of income in the current year. It would be a temporary emergency measure, applying only in 2024, 2025 and 2026.
"The American people are sick and tired of being ripped-off by large corporations that continue to make record-breaking profits by charging outrageously high prices for gas, rent, food, and prescription drugs," said Sanders in a statement Friday. "Enough is enough. We cannot continue to allow large corporations to make obscene profits by price gouging Americans in virtually every sector of our economy. If corporate CEOs and their masters on Wall Street will not end their greed, we must end it for them. It is time for Congress to enact a windfall profits tax."
