Sen. Bernie Sanders (I., Vt.) and several Democratic senators introduced legislation on Thursday to restore the corporate tax rate to 35% — undoing a central piece of the 2017 Republican tax cuts.

Sanders, chairman of the Senate Budget Committee, says the legislation is part of his effort to end the "rigged tax code," and make corporations and the wealthiest Americans pay more. NPR first reported the bill.

“Unbelievably, the United States today has more income and wealth inequality than almost any major country on Earth,” said Sanders in a statement. “This inequality has only deepened with the economic crisis brought on by COVID and by a tax system that allows for billionaires to pay less in taxes than working people across the country."

The Corporate Tax Dodging Prevention Act would also end several rules that companies can use to reduce their taxes by moving operations offshore. The new bill is sure to face fierce opposition from Republicans.

In 2017, Republicans and President Trump cut the corporate tax rate to 21% down from 35% arguing the move made American companies more competitive. The Joint Committee on Taxation says a 35% corporate rate would raise an additional $1.3 trillion over a decade.

Sanders' plan highlights a division among progressive and more moderate Democrats. Democrats generally agree that the wealthy need to pay more, but they have not worked out specific policy yet. President Biden campaigned on the idea of raising the corporate rate to 28%, and Sen. Joe Manchin (D., W. Va.) has suggested 25% would be appropriate.

[Read more: America's broken tax system]

Republicans have already started sounding the alarm about potential tax hikes, as the Biden administration gets ready to propose its long-term economic recovery plan. The plan is expected to include a massive infrastructure investment and some form of tax increases to pay for it. Biden is expected to roll out his plan next week.

Reducing income and wealth inequality was one of the central pieces of Sanders' presidential campaigns. Now, he's using his role as Budget Committee chairman to highlight those same issues. While his committee doesn't have jurisdiction over the tax code, Sanders told NPR he wants to take a broad look at economic issues facing Americans.

On Thursday, the Senate Budget Committee is holding a hearing about raising taxes on the wealthy and corporations, featuring testimony from Abigail Disney — who has advocated for higher taxes on the wealthy.

Sanders also introduced a bill to revamp the estate tax and last week, he introduced a bill to penalize companies that pay their CEOs more than 50 times their median worker pay.

Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.

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