President Joe Biden has proposed at least $2 trillion in tax hikes to finance his new spending proposals. However, he has said that he is open to additional and alternative tax increase.

Budget Committee Chairman Bernie Sanders (I-VT) is now pushing for the administration to go further and raise taxes by trillions more and has introduced a pair of bills which would raise the corporate tax rate to 35 percent and raise the death tax to a top rate of 65 percent. 

Echoing other progressives, Sanders has said that he doesn’t think President Biden’s infrastructure plan “goes far enough in terms of climate.” Because Biden’s spending plan will be done through the legislative process known as budget reconciliation, Sanders will have a significant role in shaping the legislation. 

Sanders is proposing to raise the corporate income tax rate to 35 percent, which would create a combined corporate tax rate of 38.9 percent after state taxes. While Sanders claims to be a champion of workers, this tax hike would disproportionately harm American workers and families.   

Numerous studies have found that between 50 percent and 70 percent of the corporate tax is borne by workers with the remaining being borne by shareholders. This is because capital is highly mobile, while labor is the least mobile factor in structuring ways to pay for higher corporate taxes. Thus, there is nowhere else for the cost of the corporate tax to land on than the American worker.

A corporate income tax hike would also make the United States’ corporate tax rate the highest rate in the developed world, as European countries have continually lowered their corporate tax rates in recognition of the competitive edge they receive from this tax cut.  

The average OECD corporate tax rate is 23.51 percent. Because of the 2017 tax cut, the United States’ combined tax is now 25.8 percent. Though it is still higher than the OECD average, it was a significant improvement. Under Bernie Sanders’ plan, the United States’ combined corporate tax rate would be over 60 percent higher than the OECD’s average. This would make the U.S. significantly less competitive.

study by Ernst and Young found that, under the 35 percent corporate tax rate, American companies suffered a net loss of almost $510 billion in assets between 2004 and 2017. A net of $1.7 trillion in assets were lost because of the high U.S. rate, compared to if the U.S. rate was competitive.

Senator Sanders also wants to increase the death tax to 65 percent.

The Death Tax is fundamentally unfair and is bad tax policy. It is levied on assets that have been taxed previously through income taxes, capital gains taxes, and the corporate income tax.  

In addition, this tax disproportionately impacts family-owned businesses like farmers and ranchers especially, that tend to be asset rich but cash poor. Not only will people have difficulty paying the tax, but compliance with the tax is difficult as well: compliance may require liquidation, families may encounter difficulty figuring out the value of assets, etc.  

The wealthy often evade the death tax through loopholes and armies of lawyers and accountants, which inheritors of small businesses, farms, and ranches do not have the same access to. Further, the wealthy’s use of tax avoidance mechanisms is inefficient and bad for the economy at large. 

Numerous studies have found that repealing the death tax would grow the economy. For instance, a 2017 study by the Tax Foundation found that the US could create over 150,000 jobs by rolling back the estate tax. Similarly, a 2012 study by the Joint Economic Committee found that the death tax has destroyed over $1.1 trillion of capital in the US economy. The economic growth created by repealing the Death Tax would produce $221 billion in federal revenue because of increased wages and more jobs. 

This tax should be repealed, not strengthened and expanded.  

To be clear, these tax hike proposals are just two of the countless tax hikes Bernie Sanders has come out in support of. Other proposals include a wealth tax, a financial transaction tax, a carbon tax, and trillions of dollars in other tax hikes for Medicare for All. 

President Joe Biden has already said that he wants trillions of dollars in higher taxes. Bernie Sanders is using his influence to push for even higher taxes. Biden’s tax hikes would prolong the economic downturn–Bernie’s would exacerbate this economic damage. If these tax hikes are included in budget reconciliation, and passed, the result would be a painfully slow economic recovery.