Congressional Record, Volume 158 Issue 54 (Monday, April 16, 2012)

[Congressional Record Volume 158, Number 54 (Monday, April 16, 2012)]
[Senate]
[Pages S2289-S2293]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

IMPOSING A MINIMUM EFFECTIVE TAX RATE FOR HIGH-INCOME TAXPAYERS--MOTION
TO PROCEED

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of the motion to proceed to S. 2230,
which the clerk will report.
The legislative clerk read as follows:

Motion to proceed to Calendar S. 2230, a bill to reduce the
deficit by imposing a minimum effective tax rate for high-
income taxpayers.

The ACTING PRESIDENT pro tempore. The Senator from Rhode Island is
recognized.
Mr. WHITEHOUSE. Mr. President, on a late spring day 27 years ago,
President Ronald Reagan addressed a group of high school students in
Atlanta, GA. Many of the students in that audience that day were about
to join the workforce, and President Reagan spoke about the
``strange''--to use his word--tax system that would soon claim a
portion of their paychecks.
In his speech President Reagan pledged:

We're going to close the unproductive tax loopholes that
have allowed some of the truly wealthy to avoid paying their
fair share.

He went on to note that under the country's complex tax rules, it was
``possible for millionaires to pay nothing, while a bus driver [pays]
10 percent of his salary.'' President Reagan called this inequity with
millionaires paying lower rates than bus drivers--to use his word--
``crazy.'' He said, ``It's time we stopped it.''
One year later, President Reagan signed into law bipartisan tax
reform that closed many of the loopholes and ensured that the highest
earning Americans paid a fair share. The 1986 tax reform deal set the
tax rate on investment income--overwhelmingly earned by those at the
very top of the income ladder--at the same rate as regular wage income.
Unfortunately, in the years that followed, lobbyists have been all
over Congress, and Congress has restored many of the loopholes
President Reagan cut. It has repeatedly reduced tax rates on investment
income. The capital gains tax rate has gone from 28

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percent in the bipartisan Reagan tax reform to 15 percent today. Once
again, those at the very top of the income spectrum have opportunities
to cut their tax bills that are not available to regular middle-class
families.
Let's look at where we are today, a quarter century after the last
major overhaul of our tax system.
In this photo is a building that has stories to tell. This is the
Helmsley Building on Park Avenue in New York City. Because this
building is large enough to have its own ZIP Code, we know from public
IRS information gathered by ZIP Code that the very wealthy and
successful individuals and corporations that call this building home--
with an average adjusted gross income of $1.2 million each--paid, on
average, a 14.7-percent total Federal tax rate in the last available
year for which we have information. A 14.7-percent total Federal tax
rate is less than the rate the average New York City janitor, the
average New York City doorman, or the average New York City security
guard pays. The system is upside down.
It is not just in the Helmsley Building. Each year, the IRS publishes
a report detailing the taxes paid by the highest earning 400 Americans.
Last May, the IRS published the most recent data on the top 400
taxpayers--for the year 2008. They had an average income of $270
million each. That is not bad. In fact, that is wonderful. That is part
of what makes America great.
But here is the ``crazy'' part--to quote President Reagan. On
average, these 400 extremely high earning Americans--making $270
million in 1 year--actually paid an average Federal tax rate of just
18.2 percent on adjusted gross income. We have spent a fair amount of
time in the Senate debating whether the top income tax rate should be
35 percent or something else--for example, 39.6 percent, as it was in
the Clinton boom years. But the ultra rich get around this top rate
through a variety of tax gimmicks.
We looked at what level of income a single filer would have to make
to start paying 18.2 percent or more in Federal taxes. It is $39,350.
If we look at the Department of Labor levels, that is about what a
truckdriver, on average, earns in Rhode Island. Mr. President, $40,200
is what an average truckdriver, according to the Bureau of Labor
Statistics, earns in Rhode Island--more than the $39,350--which means
they are probably paying a higher tax rate as a single truckdriver in
Providence, RI, than a millionaire who made $270 million in the last
year.

That is just not fair, not right, and that is not the progressive tax
system we have always had. I recently heard from one such truckdriver
in Rhode Island. Mike Nunes, who is a member of Teamsters Local 251,
joined me for a roundtable discussion on tax fairness in Cranston, RI.
Mike said:

I've been a middle-class worker here in Rhode Island since
I was in my early twenties. My wife and I pay our taxes, and
it's frustrating to hear that multi-millionaires are getting
special treatment to pay a lower rate.

Mike is right. I hear the same as I travel around my State. I know my
colleagues hear the same as they meet with their constituents across
the country. They all agree with President Reagan that a tax system
that allows many of the highest income earners among us to pay less
than a truckdriver must be fixed.
The problem goes beyond the top 400 income earners in the country.
The Congressional Research Service confirms that roughly one-quarter of
$1 million-plus earners--about 94,500 taxpayers--pay a lower effective
tax rate than over 10 million moderate-income taxpayers. Reuters
reported this:

Taxpayers earning more than $1 million a year pay an
average U.S. income tax rate of nearly 19 percent.

The story goes on:

About 65 percent of taxpayers who earn more than $1 million
face a lower tax rate than the median tax rate for moderate
income earners making $100,000 or less a year.

Let me read that again:

About 65 percent of taxpayers who earn more than $1 million
face a lower tax rate than the median tax rate for moderate
income earners making $100,000 or less a year.

Our tax system is supposed to be progressive. The more one earns, the
higher the rate one pays. That is not class warfare; that is tax
policy. It has been that way for decades, if not even generations. We
undermine that principle when we allow the highest income Americans to
pay a lower tax rate than a truckdriver pays. It is no wonder that so
many of the Rhode Islanders with whom I have spoken have lost
confidence that our tax system gives them a straight deal.
With the top 1 percent of Americans earning 23 percent of our
Nation's income and controlling 34 percent of our Nation's wealth--more
than one-third--it would be difficult to argue that our system is too
progressive.
Let's look at this other graphic. Of all of our Nation's wealth, the
top 5 percent of Americans own over 60 percent of it. Of all of our
Nation's wealth, the top 5 percent own more than 60 percent of all the
wealth in the country. The top 1 percent control over one-third of it.
The 400 families at the very top--the 400 I talked about earlier--own
almost 3 percent of all America's wealth just among those 400 families.
These are proportions we have not seen since the Roaring Twenties, and
they are getting steadily worse.
We are not going to overhaul the Nation's tax laws this evening, but
in a few hours we will have a chance to advance legislation to restore
some fairness into our tax system. This long overdue bill--the Paying a
Fair Share Act of 2012--would implement the so-called Buffett rule,
after Warren Buffett, who has famously lamented that he pays a lower
tax rate than his secretary. To correct this glaring tax inequity, this
bill would ensure that those at the very top pay at least the tax rates
faced by middle-class families.
I thank Senators Akaka, Begich, Leahy, Harkin, Blumenthal, Sanders,
Schumer, Reed of Rhode Island, Rockefeller, Boxer, Durbin, and Levin
for cosponsoring this measure.
I ask unanimous consent to add Senator Lautenberg as a cosponsor.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. WHITEHOUSE. The structure of our bill is simple: If your total
income--capital gains included--is over $2 million, you calculate your
taxes under the regular system. If your effective rate turns out to be
greater than 30 percent, you pay that rate--the same rate you would pay
without the bill.
If, on the other hand, your effective tax rate is below 30 percent--
like the 11 percent tax rate Warren Buffett paid in 2010--then you
would pay the fair share tax of 30 percent instead.
Taxpayers earning less than $1 million--which is more than 99.8
percent of Americans--would not be affected by this bill at all. For
taxpayers earning between $1 million and $2 million, the fair share tax
gets phased in. Ultimately, when you earn over $2 million, you are
subject to the full 30-percent minimum rate.
The one exception the bill makes to the 30 percent minimum is to
maintain the incentive for charitable giving. Under the bill, taxpayers
are permitted to subtract the same amount of contributions allowed
under the regular income tax from their taxable income. The reason for
this one exception should be self-evident: charity benefits others and
taxpayers should be encouraged to give.
Some say, given our fragile economic recovery, now is the wrong time
to raise taxes on anyone. While middle-class families continue to
struggle through the recovery, it seems the boom times have already
returned for those at the very top.
According to a recent analysis by University of California at
Berkeley economist Emmanuel Saez, 93 percent of the income growth in
2010 went to the top 1 percent of income earners. Even more astounding,
37 percent of the income growth in that year went to the few thousand
taxpayers in the top 0.01 percent. With so much income growth at the
very top and with looming budget deficits, it is hard to argue that
people with 7-, 8-, 9-, or even 10-figure incomes can't afford to pay a
reasonable tax rate.

To be clear, it has been said on this floor this is a tax on
investment and this is a tax on job creation. That is wrong. This is a
tax on one thing: income.
Republicans have criticized the amount of revenue that would be
generated by the bill. The ranking Republican on the Senate Finance
Committee called the $47 billion the Joint

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Committee on Taxation has estimated a meager sum. Well, in Rhode
Island, we don't consider $47 billion to be a meager sum. It is enough
money, for instance, to permanently keep subsidized student loan
interest rates from jumping from the current 3.4 percent to 6.8 percent
in July, which they will do unless we act. If we could use this bill to
offset the cost of keeping student loan interest rates low, then there
are millions of students out there who would call that benefit
something other than meager.
We could use the $47 billion on badly needed infrastructure projects
and create 611,000 jobs nationwide. In Rhode Island, we have 11 percent
unemployment and a long backlog of transportation infrastructure
projects. At the top of that list is the viaduct bridge on Interstate
95 through Providence. This critical link along the northeast corridor
running up through Rhode Island has wooden boards inserted between the
I-beams underneath to prevent the concrete in the roadway from falling
in on the traffic below. Also, where the Amtrak rails go underneath,
there are wood planks to keep the roadway from falling in on the trains
as they pass below. I don't think repair of this bridge and others
would be meager at $47 billion worth, particularly if we put it into an
infrastructure bank and leverage it for even more jobs.
It is worth noting this legislation would generate far more revenue
than the $47 billion the Republicans complain of if the Republicans
were to succeed in their quest to extend the very high-end Bush tax
cuts. If the Bush tax cuts for people in this bracket continue, the
revenue from the bill jumps from $47 billion to $162 billion over a 10-
year budget horizon. Operating as a backstop, the Buffett rule can
ensure those at the top pay a fair share no matter what loopholes, no
matter what special treatments Congress adds to the Tax Code in the
future.
Finally, the Senate Republican leader has described the bill as yet
another proposal from the White House that won't create a single job or
lower the price at the pump by a penny. Well, the minority leader is
absolutely right. The aim of this bill is not to lower the unemployment
rate or the price of gasoline. However, if you put the $47 billion into
infrastructure, you could create 611,000 infrastructure jobs and a lot
of good infrastructure as well. And if you put the $47 billion into
LIHEAP, you could help millions of Americans pay their energy bills.
But let me add an additional point. The Republicans are claiming this
bill, which is a tax fairness bill, not a job-creating bill, will not
create a single job. Of course, if you spent the revenue, it would, but
that is a separate discussion. At the same time they are making that
point, the Republicans in Washington are sitting on our highway bill
which creates 3 million jobs and they won't call it up on the House
side because they do not want to rely on Democratic votes. Three
million jobs are awaiting action in the House on the bipartisan Senate
highway bill that had 75 Senators supporting it, and they won't call it
up--the Republicans won't call it up--because they do not want to use
Democratic votes.
What kind of Washington insider logic is that? People across this
country who will go to work on those roads and bridges don't think that
makes any sense. For Republicans now to be talking about jobs on this
bill, while they have a jobs bill that creates 3 million jobs they are
blockading in the House, the word ``jobs'' should turn to ashes in
their mouths.
There are plenty of things this narrow tax fairness bill won't do. It
will not bring world peace, it won't save endangered whales from
extension, it won't cure the common cold. It will do none of that. It
will restore the confidence of middle-class Americans in our tax system
by assuring those at the very top of the income spectrum are not paying
lower rates than regular families do.
In addition to restoring fairness to the Tax Code, the bill will
generate considerable revenue to cut the deficit or invest in job
creation and critical programs. I happen to think that tax fairness and
tens of billions of dollars in revenue or deficit reduction are reasons
enough to pass the bill. And if the Republican leader wishes to work
with us on taxing other issues, I am wide open to that. But today's
vote is about tax fairness. It is about undoing a gimmick in the Tax
Code that allows people earning over $\1/4\ billion a year to pay lower
tax rates than truckdrivers.
Unfortunately, this has become a partisan issue, which is surprising,
because the principle of a progressive Tax Code has always been a basic
American tax policy principle. The arguments we are making today about
paying a fair share were made exactly by Ronald Reagan. But things have
changed and so there is this squabble. Even business owners support
this bill. A recent poll conducted by the American Sustainable Business
Council, the Main Street Alliance, and the Small Business Majority
found that 58 percent of business owners said those making over $1
million a year are not paying their fair share in taxes and 57 percent
supported increasing taxes for those at the top. That is out of the
small business community.
These business owners know it is simply fair for the most fortunate
and successful Americans to pay a larger share of their income in taxes
than less successful families do. That is what a progressive tax system
is supposed to do. That is what it has always done. Sadly, over the
past few decades, as income has soared at the very top, the effective
tax rates have plummeted.
This chart, prepared by Budget Committee chairman Kent Conrad, shows
the effective Federal income tax rate for the top 400 income earners
since 1992. As you can see, there has been a dramatic drop from 1995 to
2008. These rates are for Federal income tax. If you add in the small
amount of payroll taxes paid by those at the very top--which is a
separate discussion, but they fall 100 percent on the income of middle-
income families but only on a small portion of the income of super-
high-end income families--the total Federal tax rate for 2008 goes up
to 18.2 percent, counting in that withholding. That is, again, the
effective Federal tax rate of that truckdriver in Providence. The trend
in falling tax rates for those making seven figures in income or more
has eroded the confidence of ordinary Americans who do pay their fair
share.

I will conclude with one more quote. This is another quote from
President Reagan's 1985 speech on tax fairness. This is President
Reagan, the man whom so many conservative Republicans revere. He said:

What we're trying to move against is institutionalized
unfairness. We want to see that everyone pays their fair
share, and no one gets a free ride. Our reasons? It's good
for society when we all know that no one is manipulating the
system to their advantage because they're rich and powerful.

That was President Reagan in 1985. Today, his party is defending that
manipulation.
In the 27 years since that speech, the American playing field has
been skewed ever more toward the rich and powerful. From bankruptcy
reform, which favors big corporations over people, to the Citizens
United decision, which has allowed corporations and billionaires to
spend unlimited cash to influence American elections, to this lower tax
rate for ultra-high income earners, the American people have simply not
been getting a straight deal from Washington.
Many are calling the vote we will have on the Buffett rule bill today
a test vote, because it is on a procedural motion, and the pundits
don't expect it to pass. I agree. This is a test vote. But it is a test
of a different sort. This is a test of Washington, DC, to do something
that is simple, to do something that is right, and to do something that
is fair for the middle class. If we proceed to and pass this bill, it
will show the American people that Congress is capable of standing by
their side, that Congress is capable of being on their side, that
Congress is capable of saying no to a powerful and well-funded special
interest. If we fail, it will indicate exactly what President Reagan
feared--that the rich and powerful are able to manipulate the system to
their advantage and we in Congress will do nothing about it.
One of the things America stands for in this world is that we are
fair with each other; we get a straight deal and we give each other a
straight deal. That is one of the ways in which America stands as an
example to the rest of the world. There are plenty of countries where
the internal political and

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economic systems amount to a racket--a racket that is rigged for the
benefit of the rich and powerful and against farmers and workers and
small businesses and ordinary families. Some of those countries are so
bad we call them kleptocracies. But that has never been America. That
is not the America of the Founding Fathers. It is not the America of
Ronald Reagan. It is not the America that shines its light into the
four corners of the world as an example to the rest of the world. That
is not the America we are here to serve.
We must be vigilant in protecting the ideals that make this country
what it is. I urge my colleagues, Democrats and Republicans alike, to
heed the words of President Reagan and to support this legislation,
which will ensure that a favored segment of the highest earning
Americans once again do something as simple as pay their fair share in
taxes. Let us show the American people that our Nation does stand apart
as an exemplar of fairness and of equal opportunity and of equal
responsibility under the law.
I thank the Chair. I see colleagues in the Chamber, and I yield the
floor.
The ACTING PRESIDENT pro tempore. The Senator from Ohio.
Mr. PORTMAN. Mr. President, we stand here today, the day before tax
day--the day when all Americans have to get their income taxes
together--and we also stand here in the middle of the weakest economic
recovery since the Great Depression--a time when economists across the
spectrum agree there is an urgent need for us to take our Tax Code and
make it more efficient, to reform our Tax Code to help grow our economy
and add jobs. And instead of an administration or leadership in this
body proposing serious tax reforms that will actually get people back
to work, we are spending this week debating a political proposal that
no one can credibly argue will create a single job, except maybe some
tax accountants because it adds more complexity to an already way too
complex Tax Code. Unfortunately, this has become ``tax gimmick week''
here in Washington.
It is particularly disappointing because as a Nation we are stuck in
an historically weak economy with high unemployment, record long-term
unemployment, and anemic economic growth. This recovery we are in is
different, sadly. We are still millions of jobs down from where we were
at the start of the recession, which was about 4 years ago. It is
interesting to compare it to other recoveries.
In 2001, the so-called jobless recovery, at this point in the
recovery about 4 years after the recession, the Nation had not only
brought back all the jobs that were lost in the recession but we had
added hundreds of thousands of new jobs.
Even in 1981, considered the deepest recession in modern history
before the most recent one, at this time 4 years after the recession we
had added 6 million new jobs to the economy.
Unfortunately, today, as we stand here, we are still down 5.5 million
jobs. So instead of adding 6 million jobs, as we had during the Reagan
administration after the 1981 deep recession, today as we stand here we
are still trying to find how to add back the jobs we lost in the
recession, 5.5 million jobs, 5.5 million families across this country
who continue to look for hope and opportunity.
So in the midst of this weak recovery, the weakest since the Great
Depression, I think it is reasonable to expect that the President of
the United States and the U.S. Congress would focus on real solutions
to create jobs; in particular, real solutions to reform our
inefficient, complex, and outdated Tax Code, because there is a
consensus out there we need to do that.
To make the Tax Code more pro-jobs, to encourage work and savings and
investment requires broad-based reform, and everybody knows it. The
President's own commission, called the Simpson-Bowles commission,
recommended it. Most recently, the President's own Jobs Council
recommended it.
We need a proposal taken up by this Senate that is driven by good
economics. Instead, what we are getting this week is one that is driven
by campaign rhetoric. My colleagues on the other side of the aisle will
soon bring to the floor President Obama's proposed new tax targeting
investment income, the Buffett tax, named after businessman Warren
Buffett, which imposes a 30-percent minimum tax on anyone earning over
a certain amount--$1 million. Interestingly, for all of the chest
thumping about this is going to reduce our deficit, this new tax will
bring in less than one-half of 1 percent of the annual individual
income taxes that are paid. By the way, this will be enough to pay 1
week's interest on our $15 trillion national debt. That is it. So it is
certainly not about deficit reduction at a time of trillion-dollar
deficits.
The President also says his new tax on investments on American
businesses is necessary to, as he said, invest in what will help the
economy grow. This apparently means this will result in more government
spending. Private enterprises that actually create jobs apparently are
not the ones that will be making the investments. Instead, it will be
investments through government spending.
I think the Buffett rule is bad economics, I think it is bad fiscal
policy, and I think it is a distraction from the broader bipartisan
effort underway to achieve fundamental tax reform that is necessary to
unleash a true economic recovery--the proposals built, by the way, on
this notion that I heard from my colleague a moment ago that the Tax
Code is not progressive. We can argue about what progressive means, but
here are some statistics:
According to the Tax Policy Center, the top 1 percent of income
earners in this country pays a 28-percent Federal tax rate. By
contrast, Americans with incomes between $60,000 and $100,000 pay a 19-
percent tax rate. Those earning between $35,000 and $60,000 pay a 14-
percent tax rate.
Another way to look at this is that the top 1 percent of taxpayers
now pays 39 percent of all Federal income taxes. The top 10 percent now
pays 86 percent of all Federal income taxes. Those below the 50-percent
mark now pay 1 percent of Federal income taxes. Is that progressive or
not? I would say it is progressive.
To my colleagues who are saying the income tax is not progressive, I
don't think that is the concern here. I think the concern is we have an
income tax code that has too many preferences, deductions, credits,
exemptions--by the way, mostly taken advantage of by wealthier
taxpayers. We ought to reform the Tax Code.
But because the Tax Code is already so progressive, as we talked
about, this proposal from the President works primarily by increasing
the tax a lot of wealthy people pay on investment income, primarily
what is known as long-term capital gains. Capital gains have
historically been taxed in this country at a lower rate for
individuals, and they are taxed at a lower rate for good reason:
Capital gains are the return on longer term investments and enterprises
that create jobs. That is something that we have always wanted to
encourage in this country. A lower tax on capital gains drives job-
creating investment. According to the nonpartisan Congressional
Committee on Taxation, it increases wages over the long run. So by
having a lower rate for capital investments, long-term investments in
job creation, it will increase wages in the long run.
By the way, that is why Presidents Kennedy, Reagan, Clinton, and Bush
all backed capital gains rate cuts. As President Kennedy said so well:
A rising tide lifts all boats.
Second, we should realize that raising the capital gains rate doesn't
translate directly into higher revenues. Why is that? It is because it
is an elective tax. Think about it. You only pay it when you choose to
sell an asset, when you choose to realize what is called a gain when
you sell something. So you don't have to incur this tax. Common sense,
economics, and experience teach that a higher capital gains rate causes
some investors to hold assets rather than sell them, just as a lower
capital gains rate will encourage more people to sell an asset because
the rate will be lower. And this is what has happened: After every
recent capital gains rate cut, in 1981, 1997, and 2003, capital gains
revenues actually increased.
So you had a cut in the rate in 1981, 1997, and 2003, and what
happened? The revenues actually increased: Lower rate, higher revenues.
How could that be? Well, because with the lower rate people sold more
assets and created more economic activity.

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Capital gains tax rates increased between 37 and 114 percent over 4
years, and that is after inflation. By contrast, after a capital gains
rate increase took effect in 1987--that was talked about a moment ago--
capital gains revenues actually dropped 55 percent over the next 4
years.
So we can debate what the rate ought to be, but the fact is to say
that there is going to be a direct correlation between raising that
rate and more revenue simply is not borne out by historical experience
or by common sense.
Third, unlike other types of income, capital gains are often double
taxed. Think about a typical capital investment, someone buying
corporate stock--that is the most typical one, holding that stock for
over 1 year--you have got to hold it for over 1 year--and then selling
it for a profit. That gain has already been subject to a 35-percent
rate at the corporate level. It is then followed by the capital gains
rate, now at 15 percent, when the shareholder sells, for a combined 45-
percent tax on that capital investment.
By the way, with global competitors such as Canada, Japan, the United
Kingdom, and others moving to cut their corporate tax rates in order to
create jobs, this new tax on capital investment would move the United
States farther backward in terms of being competitive in the global
economy. Our corporate tax rate is already higher than all of our major
foreign competitors. As of April 1, Japan lowered theirs, making us No.
1 in the world in something you don't want to be No. 1 in, which is the
highest corporate rate. We don't need new barriers to growth and job
creation, and that is what would result.
Instead of an election year gimmick that won't help the economy, it
is time to focus on fundamental tax reform to make American businesses
and workers more competitive again, as the President's own Simpson-
Bowles commission has recommended and as the President's own Jobs
Council has recommended.
I agree with what former Clinton Budget Director Alice Rivlin said
about the Buffett tax, which is the way to fix the Tax Code is to fix
the Tax Code, not to add another complication at the margins. The
Buffett tax is an election year distraction from serious reform. Why
not focus on the elephant in the room--an outdated and complex Tax Code
that is hurting our economy, weighing down our economy, making it
harder for us to get out of the kind of doldrums we are in right now
with this weak recovery.
I believe there is a consensus among economists and serious thinkers
across the political spectrum, Republicans, Democrats, and Independents
alike, that with an increasingly competitive global economy, we have to
reform our Tax Code to help us get out of this rut we are in, this
historically weak recovery that leaves too many people vulnerable, too
many parents wondering if the future is going to be brighter for their
kids and grandkids, as it was for them.
I believe there is also a growing bipartisan consensus about how to
do it, which is that we ought to do it by broadening the base--meaning
getting rid of some of these growing credits and deductions and
exemptions I talked about earlier, lowering the marginal rates on
American families and on our businesses to be able to create jobs. That
will ensure that those who can afford to pay more will pay their
share--their fair share. And the economy will grow, a rising tide
lifting all boats, truly helping families who are worried, for good
reason, about their economic future.
The American people don't deserve more gimmicks, as we will see this
week in Washington. They deserve real leadership.
Mr. President, I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Rhode Island.
Mr. WHITEHOUSE. Mr. President, it is interesting that my Republican
colleagues tend to refer to this as a tax gimmick. It was referred to
as tax gimmick week because we are considering having people earning a
quarter of a billion dollars pay a rate equal to what a truckdriver
pays. That doesn't sound very gimmicky to me. That sounds like pretty
Main Street fairness to me.
But the bottom line is there is a gimmick at stake. It is the gimmick
in the Tax Code that allows for that to take place, that allows for a
hedge fund billionaire to claim a lower rate than a truckdriver. So if
there is a gimmick here, it is the gimmick we are trying to remove. It
is not a gimmick that we are trying to pursue.
It has been said this is a tax on investment, a tax on job creation.
It isn't. It is a tax on income, when it is declared as income. And if
our purpose should be how to add back the jobs lost in the recession,
we just passed a highway bill with 75 Senators supporting it, only 22
opposed--which, as we know around here in this partisan environment, is
a landslide. It came out of the Environment and Public Works Committee
unanimously. It had 40 amendments accepted, and now 3 million jobs are
bottled up on the other end of this hallway in the House of
Representatives because the Republican Speaker doesn't want to use
Democratic votes. If you want to do something about jobs, tell the
Republican Speaker to pass the Senate highway bill. It is as simple as
that, 3 million jobs, bipartisan. So when we talk about jobs, I have a
good recommendation: Pass the big highway jobs bill that is being kept
bottled up here.
The other point I wanted to make on the question of whether the tax
system is progressive, the IRS and the Federal Reserve point out that
the top 1 percent in America in terms of wealth controls 33.8 percent
of the Nation's wealth, but the top 1 percent in taxes pays only 28.3
percent of the taxes when all taxes are taken into consideration. The
top 5 percent controls 60 percent of the Nation's wealth, but the top 5
percent in taxes only pays 44.7 percent. So if you want to take numbers
sort of without context, you can make it look as if it is very
progressive, but when you measure against the wealth inequality in this
country and the income inequality in this country, it is hard to say we
actually are running a progressive tax system. And that is why, as
Reuters reported, about 65 percent of taxpayers who earn more than $1
million face a lower tax rate than the median tax rate for moderate-
income earners making $100,000 or less a year, according to the
Congressional Research Service.

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