[Congressional Record (Bound Edition), Volume 158 (2012), Part 4]
[Senate]
[Pages 4695-4699]
[From the U.S. 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 No. 339, 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 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.

[[Page 4696]]

  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 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

[[Page 4697]]

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 
extinction, 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 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.

[[Page 4698]]

  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.
  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

[[Page 4699]]

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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