[Congressional Record (Bound Edition), Volume 158 (2012), Part 4]
[Senate]
[Pages 4699-4712]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      MATT RUTHERFORD'S SOLO SAIL

  Mr. HARKIN. Mr. President, before the Easter recess, I came to the 
floor to talk about a truly remarkable American--a visionary, a 
dreamer, an adventurer, and, most importantly, a young man who has 
devoted himself to service to others far above and beyond the call of 
duty. The young man's name is Matt Rutherford, an Ohioan. He turned 31 
about a week ago.
  Here is what he has done in almost the last year. On June 13 of last 
year, this then-30-year-old young man got onboard a 36-year-old, 27-
foot-long Albin Vega sailboat, a small sloop-rigged sailboat, and he 
set out on one of the most audacious adventures ever contemplated by 
any sailor.
  He set out to circumnavigate the Americas, solo and nonstop. Here is 
what he did. On June 13 of last year, he left Annapolis on this small 
27-foot sailboat. He sailed out of the Chesapeake Bay, he sailed up 
around Nova Scotia, Newfoundland, Labrador, all the way up by 
Greenland--all by himself--and then sailed the Northwest Passage, all 
the way through the Northwest Passage here.
  If I remember right, he has been certified by the Scott Polar 
Institute in Cambridge, England; he has been recognized as the first 
person in recorded history to make it through the fabled Northwest 
Passage alone and nonstop in such a small sailboat. He came through the 
Northwest Passage, rounded Alaska, went from Alaska all the way down to 
Cape Horn.
  Again, if you know anything about the treacherous waters of Cape 
Horn, you know someone in a small 27-foot boat probably doesn't have 
much chance of making it, but he did it. He went around Cape Horn, all 
the way up the coast of South America, up through the Caribbean, and 
today as I stand here and speak, he is just outside of the mouth of the 
Chesapeake Bay, off the coast of Virginia, the North Carolina-Virginia 
border, and is going

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to make landfall this Saturday in Annapolis, 313 days after he 
started--solo, nonstop, never touched land. This is one of the most 
historic adventures ever undertaken by a human being, solo, nonstop, 
around the Americas--313 days in treacherous waters. He has not set 
foot on dry land for the entire journey. He has not stopped.
  I have had the privilege of talking to Matt. I never met the young 
man--not yet--but I had the privilege of talking with him on his 
satellite phone just last week, when he said to me it would probably be 
the last phone call he would make because all of his equipment is now 
starting to fail. He said: It is like the boat is talking to me, and it 
knows the journey is almost over. His solar panels have died, his wind 
generator is gone, his engine doesn't work, and he is out of power. He 
is only under sail, he has no engine any longer, and he says that when 
big waves hit, the boat creeks and groans. He is just about to make it 
into the mouth of the Chesapeake Bay. What a tremendous adventure. 
Right now he is about 15 miles off of Kitty Hawk, NC. So 313 days after 
he began, he will make landfall this Saturday at the National Sailing 
Hall of Fame dock in Annapolis, MD. That will be the first time he will 
set foot on dry land in 313 days.
  I am in awe of Matt's courage, his character, and his audacity to do 
this. He is in a class with a tiny group of explorers and adventurers, 
pathbreakers who defied odds to accomplish greatness. I think of Joshua 
Slocum, the first person to sail singlehandedly around the world. It 
took him 3 years. He covered 46,000 miles. He made many stops, but he 
did it between 1895 and 1898--the first known solo circumnavigation of 
the Earth. I think of Sir Francis Chichester, who sailed from Plymouth, 
England, in 1966, the first person to achieve a true circumnavigation 
of the world solo, from west to east, via the great capes. He did so in 
226 days with one stop in Australia. I think of Dick Rutan and Jeana 
Yeager and their Voyager aircraft--now hanging in the Smithsonian--in 
1986, the first to fly around the world nonstop without refueling. I 
think of the extraordinary feats of physical endurance and courage of 
Robert Peary in 1909, the first person to reach the North Pole; Roald 
Amundsen in 1911, the first person to reach the South Pole; and Sir 
Edmund Hillary in 1953, the first person to climb Mount Everest. Matt 
Rutherford now finds himself in this very exclusive company and club of 
audacious adventurers.
  However, I would say Matt Rutherford has in important ways surpassed 
the feats of, say, Slocum and Chichester because Slocum and Chichester 
made stops during their voyages. Matt is accomplishing his voyage solo, 
nonstop, on a small 36-year-old boat, 27 feet long, best suited for 
weekend sailors who do not want to venture outside of the Chesapeake 
Bay. As I said, the Scott Polar Institute in England has already 
recognized him as the first person in recorded history to make this 
sail solo through the Northwest Passage in a small sailboat.
  Here, again, is where Matt is in a class by himself. Why is he doing 
it? Yes, he is going to set a very fantastic record. It has never been 
done before. But he is doing it to raise money for Chesapeake Region 
Accessible Boating--CRAB for short. It is an Annapolis-based 
organization that provides sailing opportunities for physically or 
developmentally disabled persons. You can see now why I am so 
interested, as the lead sponsor of the Americans With Disabilities Act. 
I am deeply impressed by the fact that Matt has undertaken this 
historic voyage in a cause larger than himself to make it possible for 
more people with disabilities to have the opportunity to experience and 
enjoy boating and sailing. One of the fundamental goals of the 
Americans With Disabilities Act is that people with disabilities should 
be able to participate fully in all aspects of society, and that 
includes recreational opportunities such as sailing, which can be 
exhilarating and empowering for children and adults with a wide range 
of disabilities.
  I salute Matt for his courage. He is almost home. He will be here 
this Saturday. Here is the young man sitting on his boat. I assume that 
picture was taken when he was up in the Northwest Passage because he 
looks pretty cold, but he is a young man with extreme courage. What an 
audacious undertaking. People advised him no, that he could never do 
it, that the odds of him surviving through all these treacherous waters 
were very small, but he decided to do it nonetheless. He is setting a 
tremendous record. I salute him for wanting to share his love of 
sailing with the disability community, for using his adventure to raise 
awareness and expand access to sailing to Americans with disabilities.
  I say to all, if you want to learn more about Matt and the mission, 
you can go to his Web site. It is very easy to remember; it is just 
solotheamericas.org, www.solotheamericas. You can go back and follow 
him through this entire journey around the Americas--
solotheamericas.org.
  I applaud Matt Rutherford for his vision and spirit. I wish him safe 
passage during this final leg of this epic journey. I hope to have the 
honor of meeting him and thanking him upon his return. Matt Rutherford 
is one of those remarkable human beings who dream big, driven by big 
challenges, who refuse to accept the limits and boundaries so-called 
reasonable people readily acknowledge, who put aside fear in order to 
accomplish great and good things, not just for themselves but for 
others. That is Matt Rutherford. I again applaud him for his courage 
and for sticking with it. It is one of the great feats of ocean sailing 
that have taken place in the entire history of sailing the great 
oceans. He will be back this Saturday. As I said, we hope he has fair 
winds and a following sea for the next 4 or 5 days.
  The ACTING PRESIDENT pro tempore. The Senator from South Dakota.
  Mr. THUNE. Mr. President, very soon the Senate is going to be voting 
on whether to invoke cloture on the motion to proceed to Paying a Fair 
Share Act of 2012, to enact the so-called Buffett rule. It is ironic 
that we would be debating that subject right now because there is so 
much work we ought to be doing that would actually address the 
fundamental problems our economy is facing right now.
  If you look at the President's focus on this particular issue and you 
look at what his economic record consists of since he became President, 
here is what we are looking at. Gas prices are up 111 percent since 
President Obama took office. There are now 38 months in a row where we 
have had unemployment that exceeded 8 percent. We have seen college 
tuition go up by 25 percent. We have seen health care costs go up by 23 
percent. The number of people on food stamps in this country is up by 
45 percent. The Federal debt we are handing off to our children and 
grandchildren is up by 47 percent. That is this President's economic 
record.
  It is ironic that we are here today talking about something even the 
White House admits is a gimmick that would do nothing to reduce the 
Federal debt, strengthen the economy, or move us toward the fundamental 
tax reform that is sorely needed for this country.
  On April 1, just over 2 weeks ago, America claimed the dubious 
distinction of having the highest combined corporate tax rates among 
advanced economies when Japan implemented its corporate rate tax 
reduction. Yet, rather than debate how best to reform our Tax Code to 
help American companies compete in a global economy, we are instead 
spending our time on a politically motivated measure that everybody 
knows is not going to become law.
  Before we consider why the Buffett rule is bad tax policy, let me 
start by acknowledging just how inconsequential this change in law 
would be. According to the Joint Committee on Taxation, the bill 
offered by Senator Whitehouse would raise tax revenue by $47 billion 
over the next 10 years. This means the legislation, if enacted, would 
raise each year about half of what the Federal Government spends every 
single day. Think about that for just a moment. President Obama has 
been flying around the country touting the importance of a proposal 
that, if enacted, would raise about half of 1

[[Page 4701]]

day's worth of Federal spending. So between now and this time tomorrow 
we will actually spend more Federal tax dollars than what this would 
bring in in an entire year. Put another way, the revenue this 
legislation would raise each year amounts to .03 of 1 percent of the 
$15.6 trillion national debt--.03 of 1 percent of the Federal debt. 
This bill would raise less than 1 percent of the $6.4 trillion in 
deficits projected over the next decade under the Obama 
administration's budget.
  This bill is clearly not about deficit reduction or taking any 
meaningful action to get our fiscal house in order. What then is this 
legislation about? The President and many Democratic Members of 
Congress stated they believe the Buffett rule is about ``tax 
fairness.'' Their view is that wealthy Americans are not paying their 
``fair share.'' Unfortunately for supporters of this legislation, the 
facts simply don't support that view.
  According to the Organization for Economic Cooperation and 
Development, the United States already has the most progressive income 
tax system among its 34 member nations. In fact, in 2009 the top 1 
percent of taxpayers by adjusted gross income paid 37 percent of all 
Federal income taxes even though they only accounted for 17 percent of 
all income. Let's take the top 5 percent of taxpayers. They paid 60 
percent of all income taxes even though they only accounted for 32 
percent of all income. In 2009, taxpayers with over $1 million in 
adjusted gross income accounted for 10 percent of income reported but 
paid 20 percent of income taxes.
  In terms of effective income tax rates, the Congressional Research 
Service recently reported that the average effective tax rate among 
millionaires is already 30 percent. It is true that some millionaires 
such as Warren Buffett pay a lower effective tax rate because they get 
a large percentage of their income from capital gains and dividends. 
The lower tax rate on investment income is not a tax loophole; it is 
the result of a deliberate policy by Congress and past Presidents to 
encourage new investments in our economy.
  In fact, in 1997, Democratic President Bill Clinton signed into law a 
reduction in the capital gains tax rate from 28 percent to 20 percent. 
What was the result of that rate reduction? Taxable capital gains 
nearly doubled over the next 3 years. Unemployment fell below 4 
percent, and the increased Federal revenue from capital gains 
realization held a Federal budget surplus.
  But rather than learning the lesson that lower taxes on investment 
income lead to more investment, the Buffett tax would take us in the 
opposite direction. The Buffett tax is nothing more than a backdoor tax 
on the nearly 60 percent of all capital gains and dividend income 
earned by upper income taxpayers. We can debate about how best to 
encourage new investments in clean energy and high technology or in 
other important sectors of our economy, but I hope we can all agree 
that raising taxes on these investments is not the best way to 
encourage them.
  We should bear in mind that the current U.S. integrated tax rate is 
50.8 percent, the fourth highest among OECD nations. It is bad enough 
that America has the highest combined corporate tax rate. Perhaps some 
supporters of the Buffett tax would also wish us to have the highest 
tax on investment income as well. Simply put, the Buffett tax is a 
solution in search of a problem. Wealthy Americans are already paying a 
huge share of income taxes. And for that small minority of wealthier 
Americans such as Warren Buffett who feel compelled to pay higher taxes 
to the Federal Government, I propose that we make it easier for them to 
do so.
  Last October I introduced the Buffett Rule Act of 2011, which 
currently has 40 cosponsors here in the Senate. My legislation would 
create a box on the Federal tax forms that individuals or businesses 
could check if they wish to donate additional dollars to the Federal 
Government for debt reduction. We should make it as easy as possible 
for those who want to pay higher taxes to voluntarily make those 
payments, but let's not impose a new tax on entrepreneurs and small 
business owners who believe they can spend their own dollars better 
than Washington can.
  Some have attempted to characterize this bill as a step toward 
comprehensive tax reform. When I say this bill, I am talking about the 
bill we are going to be voting on later. Unfortunately, it is exactly 
the opposite. Comprehensive tax reform is needed for many reasons, but 
one major reason is because we desperately need to simplify our 
convoluted tax system. How is a bill that adds a new layer of 
complexity to the Tax Code a step toward comprehensive tax reform? It 
is bad enough that we already have an alternative minimum tax that 
snares millions of American families. The Buffett tax, if it is 
enacted, would become an alternative alternative minimum tax. It would 
be a new layer of unnecessary complexity on top of an already existing 
layer of unnecessary complexity.
  We should not forget that the alternative minimum tax was originally 
put in place back in 1970 to ensure that 155 wealthy Americans paid a 
higher rate of tax. Yet this year over 4 million Americans are going to 
be hit by the alternative minimum tax. In fact, if Congress does not 
act to enact the AMT patch for tax year 2012, the Congressional Budget 
Office projects that more than 30 million Americans will be subject to 
higher taxes due to the alternative minimum tax. Clearly Congress's 
record of targeting tax increases at only the very wealthy is not very 
good.
  The Obama administration has stated that its intent is for the 
Buffett rule to replace the existing alternative minimum tax. Yet 
according to an analysis by the Joint Committee on Taxation, replacing 
the existing AMT with the Buffett tax would add nearly $800 billion to 
the deficit over the next 10 years. It is time for the gimmicks to stop 
and the Senate to get serious about the real tax issues that are facing 
us. The reality is we have a $5 trillion tax increase over the next 10 
years--the largest tax increase in our Nation's history--staring us in 
the face come next year. If we don't act to extend the lower individual 
tax rates, the lower estate tax rates, the lower rates on capital gains 
and dividend and other expiring provisions, our economy will face a tax 
increase of over $400 billion in 2013.
  Allowing 2001 and 2003 tax rates to expire would be an enormous tax 
increase on our economy equal roughly to 2.5 percent of the GDP. 
According to the Congressional Budget Office, allowing the new tax 
increase to go into effect would slow GDP from 0.3 percent to 2.9 
percent. That would mean a loss of at least 300,000 jobs and could mean 
the loss of as many as 2.9 million jobs. This massive tax increase 
could mean the difference between a sustained economic recovery and 
falling back into recession.
  Yet here we are today discussing a bill that would not extend tax 
relief for hard-working Americans. It would not forestall a massive tax 
increase on our economy. The bill before us would do one thing and one 
thing only, and that is target higher taxes on a smaller subset of our 
population in order to serve a political purpose. It is time to end the 
class warfare of pitting one group of Americans against another and 
instead move forward with ensuring that tax relief is there for all 
Americans. I hope that once the cloture motion fails later today, we 
can pivot to what most American people want us to do and that is to 
enact measures that grow the pie, to expand our shared prosperity 
rather than the politics of envy and wealth redistribution.
  The opportunity cost of all of these tax-the-rich proposals offered 
by our Democratic colleagues--whether the millionaire surtax or Buffett 
tax--is that they distract us from what should be our focus, and that 
is fundamental tax reform.
  The former Director of the CBO, Doug Holtz-Eakin, recently released a 
study where he estimated that comprehensive tax reform could raise the 
rate of GDP growth by at least 0.3 percentage points annually. This 
faster rate of GDP growth would result in increased Federal revenues in 
the range of $80 billion to $100 billion each year,

[[Page 4702]]

much more than the Buffett tax is projected to raise.
  So I will say to my Democratic colleagues, if you want tax policies 
that raise more Federal government revenue, broad-based, comprehensive 
tax reform is the way to get there. But, of course, tax reform is going 
to be difficult and it will require Presidential leadership as much as 
it required Presidential leadership back in 1986. It is easier to 
promote measures such as the Buffett tax that do nothing to improve our 
tax or our economy but that make for a good 30-second political ad.
  I understand why some of my colleagues want us to have this political 
debate today, but I hope we can move quickly to real progrowth tax 
reforms. That would be the best means by which to promote real tax 
fairness for all Americans. I believe all Americans want to see this 
Congress working in a way that expands the pie, not redistributes it.
  We should be looking at ways we can grow the economy and make and 
create more jobs for more Americans, raise the standard of living, 
quality of life Americans enjoy in this country. It is clear the one 
way not to do that is to raise taxes on the people who invest and 
create jobs in this country, and that is precisely what this particular 
tax would do. It is the wrong approach. It is clearly motivated by 
political purposes, nothing more than to create a good 30-second 
political ad in an election year. If the American people see through 
this, they understand what plagues Washington, DC, is not a revenue 
problem, it is a spending problem.
  For those who want to pay more, we have a way of doing that. Let's 
enact legislation that allows people in this country who have that kind 
of income to be able to check a box to contribute more in tax revenue 
toward tax reduction, but let's not impose and require and mandate 
these types of taxes on the people in this country who are creating the 
jobs and have an opportunity to help us grow this economy and put more 
people back to work. After all, that is what the American people want 
us to be focused on.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I ask to speak as in morning business.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.


                         Montana National Guard

  Mr. BAUCUS. Mr. President, tomorrow 145 Montana Guardsmen will kiss 
their husbands and wives, hug their children, say goodbye to their 
friends, and get on a plane from Billings, MT to Afghanistan. Two weeks 
from today 95 more Montanans will do the same. Together these 240 
Montana Guardsmen are in the long line of thousands of Montanans to 
deploy since 9/11. More Montanans signed up for service after 9/11 than 
any other State in the country per capita. Since then, 6,668 Montana 
Guardsmen were deployed. Montana's Guard has deployed at among the 
highest rate in the country.
  Each and every deployment requires enormous sacrifices from the 
Guardsmen themselves, their families holding down the fort at home, 
their employers, and entire communities. They make these sacrifices 
quietly. They perform their missions with excellence, professionalism, 
and without bragging. So I want to do a little bragging on their behalf 
and salute each and every one as they prepare for combat.
  The 484th Military Police Company leaving tomorrow is based in Malta, 
Glasgow, and Billings. Their mission will be to help train the Afghan 
national police. They will be immersed in the Afghan culture, working 
hand in hand with the local officers deep in the heart of the city 
precincts. What an incredibly important and challenging task, and they 
are ready.
  They have been training hard for this job for more than a year. Many 
of them will bring invaluable experience in civilian law enforcement 
that will be critical to this mission.
  The 260th Engineering Support Company will also leave Montana April 
30 for a year-long tour in Afghanistan. The unit is from Miles City, 
Culbertson, and Sidney. They will perform the dangerous mission of 
clearing explosives off roads and protecting U.S. convoys from Taliban 
attacks. The 95 members of this unit have received specialized 
explosive training and they are ready to go.
  This past February 60 members of the Bravo Company 1st of the 189th 
General Support Aviation Brigade left Helena for a tour in Afghanistan. 
Their unit flies and maintains six CH-47 Chinook helicopters and has a 
lifeline of supplies, ammunition, food, and water for air troops. They 
help get the troops where they need to go to accomplish their missions 
quickly and safely.
  Last March, 12 Montana Guardsmen returned from duty in Iraq and 
Kuwait. They flew C-12s, getting troops where they needed to go to 
accomplish top-priority missions.
  In 2011, nearly 100 Montana troops deployed again to Iraq. They were 
Charlie Company 1st of the 189th, and they were among the last of the 
combat troops on the ground. They provided medevac support for the 
famous road march that brought our troops out of Iraq from Camp Adder, 
near Nasiriyah, to the Khabari border crossing into Kuwait.
  In 2010, more than 600 Montana Guard troops served in Iraq, and 
thousands more had deployed there in previous years.
  Our Air Guard has been busy. In 2010, 99 members of the Red Horse 
squadron, an engineer unit, spent a year working in Afghanistan. They 
built about every kind of structure you can imagine to support the 
mission on the ground, from fixing airfields, so our troops could land 
and take off safely, to constructing observation towers vital to 
intelligence on the ground, to drilling wells to bring water to some of 
the most dangerous parts of the country.
  At the same time, dozens of Montana airmen have deployed to support 
the Air Sovereignty Alert in the Pacific. They are our first line of 
defense in the Pacific, on call 24 hours a day, 7 days a week.
  On top of all this, 53 Montana Airmen deployed individually to 
support missions over the course of the last year in Bahrain, Cuba, 
Djibouti, Kuwait, Kyrgyzstan, and a number of other locations around 
the world.
  The Guard has their mission at home as well. When flooding hit 
Montana last week, the Montana National Guard troops were some of the 
first folks to respond with a helping hand. When Highway 12 was washed 
out, the town of Roundup basically became an island. The Montana Guard 
was their bridge, carrying supplies back and forth.
  It is an understatement to say these guys are busy. They are 
volunteers, and they are balancing their military service with their 
civilian careers at home. We can't thank them enough for what they are 
doing.
  It is hard to capture the nature of their service unless one has seen 
it firsthand. During my visit to Afghanistan, I was so impressed by the 
service and professionalism of our troops serving there. They were 
remarkable.
  One brief story from a guardsman serving in Iraq in 2011 captures the 
spirit of who those men and women are. Montana Specialist Chvilicek was 
serving as a medic in a convoy near Balad. His convoy hit an IED which 
cut Specialist Chvilicek's arm and ear with shrapnel. Instead of 
attending to his own wounds, Specialist Chvilicek immediately sprang 
into action, providing medical care to his fellow soldiers. That is 
remarkable, but it is not uncommon. That is exactly the kind of spirit 
these troops have.
  Our Nation has been at war now for more than 10 years. These men and 
women represent the 1 percent of our country serving in the military 
who are bearing a very heavy load for the rest of us.
  Montanans do not take these men and women for granted. Friends, 
families, neighbors and communities show up to wish them well when they 
deploy and greet them when they return home. They send care packages 
overseas and fill in as babysitters here at home. They provide hands to 
hold and ears to listen.
  To every Montanan serving as part of that support system and to every 
employer of a national guardsmen: thank you for what you do.

[[Page 4703]]

  Last year I had the honor of attending a deployment ceremony in 
Helena. A mother told me about what it was like when her husband was 
deployed.
  To sum up what she said: It's not easy for these families. For 
months, there is one fewer helping hand around the house to help out 
with the carpools, the homework, the leaky faucets, the lawn mowing, 
and everything else that goes into raising a family day to day.
  Our military families shoulder a heavy load to support the loved ones 
who deploy. But you will never hear them complain. They are proud of 
their service.
  It is our job to do our part to make sure our troops and our families 
are taken care of when they come home. A big part of that is making 
sure they have jobs to come home to. Recent unemployment figures show 
that 9.1 percent of current or past members of the Reserve or National 
Guard were unemployed. In Montana that number is as high as 20 percent 
for our troops returning from Iraq and Afghanistan. We need to work 
hard to bring that figure down.
  I was proud to work on getting a tax credit to help businesses hire 
our veterans.
  And this week I am meeting with representatives from the Military 
Officers Association of America to discuss more ways we can help.
  One important piece is simply getting the word out. With the help of 
the Iraq and Afghanistan Veterans of America the Employer Support of 
the Guard and Reserve, the American Legion, and the Veterans of Foreign 
Wars, we can make sure that both veterans and employers know about it 
and take full advantage of the credit.
  In 1776, Thomas Paine wrote: ``These are the times that try men's 
souls. The summer soldier and the sunshine patriot will, in this 
crisis, shrink from the service of their country; but he that stands by 
it now, deserves the love and thanks of man and woman.''
  The Montana Guardsmen leaving this month, their families and entire 
communities, will face a true trial in Afghanistan. We thank them 
deeply for their service and sacrifice.
  To every Guardsmen deploying tomorrow: Thank you for your service. 
And good luck. Please know you are on our minds and in our hearts each 
and every day.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
  Mr. BARRASSO. Mr. President, I have risen many times over the past 3 
years to talk about the bad policy choices of the Obama administration 
and the harmful effects of these policies on our economy and on the 
American people.
  In many ways, the President's decisions have made things worse in our 
country. The bill before us today would impose what is being called the 
Buffett tax. It is just one more example of a policy that will hurt our 
economy, not help it. This tax will take money from the pockets of 
small businesses that they would use to create jobs. More than one-
third of all business income reported on individual returns would be 
hit by this tax increase.
  Back in September President Obama said this tax hike on American 
families would raise enough money not only to pay for his increased 
spending but it would ``stabilize our debt and deficits for the next 
decade.'' Back then he said: ``This is not politics; this is math.''
  Of course, we now know the Buffett tax is only about one thing: 
politics. The increased tax revenue would amount to about $5 billion 
this year, which is about the same amount of money Washington will 
borrow over the next day and a half. The President would have to 
collect his so-called Buffett tax for more than 200 years just to cover 
the Obama deficit from last year alone. That is not just my math; that 
is the math from the Joint Committee on Taxation.
  The Buffett tax will not fix Washington's debt because Washington 
doesn't have a revenue problem; it has a spending problem. Even one of 
President Obama's top economic advisers finally admits the Buffett tax 
will not ``bring the deficit down and the debt under control.'' Based 
on his record, it is clear the President would not put a single dollar 
raised by his new tax toward the debt. He will just spend it.
  So the President has now changed his story once again. Now he says 
this is no longer a way to pay down the deficit. Now he says it is just 
a matter of fairness.
  President Obama has been using the word ``fair'' in quite a few of 
his campaign speeches lately. It is a word of great appeal to most 
people. Just like ``hope'' and ``change''--the buzz words of the 2008 
Presidential campaign--people can interpret it to fit their own 
meaning. President Obama's idea of fairness doesn't match up with the 
American people's idea of fairness.
  Senator McConnell earlier made reference to an editorial I wrote in 
Investors Business Daily. President Obama thinks it is fair that our 
children and grandchildren will be burdened with debt because of 
Washington's reckless spending, such as borrowing 42 cents of every $1 
it spent so far this year. President Obama thinks it was fair to pile 
another $40,000 of debt onto every household in the United States over 
the last 3 years.
  President Obama thinks it is fair to use college students as props 
for his campaign-style rallies without explaining how his bad policies 
will leave them in debt. President Obama thinks it is fair to force 
hard-working taxpayers to subsidize a wealthy person's purchase of a 
hybrid luxury car because it fits into his idea for American energy.
  President Obama thinks it is fair to hand out hundreds of millions of 
taxpayer dollars to politically connected solar energy companies that 
then go bankrupt. President Obama thinks it is fair to tell thousands 
of workers they will not have jobs because he has blocked the Keystone 
XL Pipeline. Why? To solidify his support with a few far-left 
environmentalists.
  President Obama thinks it is fair that more than half of his biggest 
fundraisers won jobs in his administration. That is right, more than 
half, which has been reported in the Washington Post. President Obama 
thinks it is fair to give important jobs to people who fail to pay 
their own taxes, such as his own Treasury Secretary.
  Apparently, President Obama thinks it is fair that 3 years of the 
Obama economy have left us with more people on food stamps, more people 
in poverty, lower home values, higher gas prices, and higher 
unemployment.
  There are many ways in which the American people's understanding of 
``fairness'' differs from the way President Obama has been using the 
word. To the vast majority of Americans, ``fair'' means an equal 
opportunity to succeed. To President Obama, ``fair'' requires nothing 
less than a total equal outcome regardless of effort.
  To most Americans, fairness allows for the pursuit of their own 
dreams. It also recognizes that no man and no government can provide a 
guarantee of success.
  The waves of immigrants who have come to our shores over generations 
did so for freedom and for a chance to succeed. They did not come to be 
taken care of and to have every decision made for them by the 
government. That is what many of them were leaving behind.
  When President Obama pushes for equal outcomes instead of equal 
opportunity, he is trying to pit one American against another. He is 
telling people it is not fair that someone else has something they 
don't have. That may be a clever campaign tactic, but it is not true, 
and it is bad for our country. One person getting more does not mean 
someone else has to get less. In America, it is possible for all of us 
to prosper. That is what made America different from the very 
beginning--the prospect that all of us can do better--not at the 
expense of our neighbors but by our own effort.
  There is something that threatens to keep all of us from success. It 
is the thing that threatens to keep us all from passing on to our 
children the hope for their own prosperity. It is the crushing debt, 
the debt this administration has been forcing onto the backs

[[Page 4704]]

of American workers. It is the mountain of bureaucracy that stifles 
American opportunity.
  The old maxim says that a rising tide lifts all boats. President 
Obama seems to think it is better to put holes in all of the boats as 
long as that means they are all equal in the end. That is what he 
seemed to be saying in 2008 during one of the Democratic Presidential 
debates.
  Moderator Charles Gibson asked then-Senator Obama why he favored 
raising taxes on capital gains. Our history clearly showed that when 
the tax rate has gone up, government revenues actually went down. 
Senator Obama said he wanted to raise taxes anyway ``for purposes of 
fairness.''
  In the name of achieving what he considers to be fair, the President 
was willing to hurt millions of hard-working families who already paid 
taxes on their income--families who invested some of that income and 
now would have to pay higher taxes again when they decide to sell some 
of those investments. The President didn't even care if Washington 
ended up with less money as a result of his efforts to punish success. 
The only important thing was that he thought it would be more fair.
  That is a pretty extreme definition of what ``fair'' means, and it is 
not one the American people share. In any fair society, doing better 
should be a consequence of one's efforts. To President Obama, fairness 
means getting something for nothing.
  The American dream is about people using ingenuity, ambition, and 
hard work. It is about overcoming obstacles. Americans admire the 
inventor who works long hours in the garage, building and failing and 
trying again and again until this inventor succeeds. Americans speak 
with pride about having worked their way through college washing 
dishes, pouring concrete, flipping hamburgers--whatever it took for 
them to reach their goals.
  Most Americans don't speak with pride about being bailed out by 
Washington or cashing a government check. The idea of people earning 
their success has been a vital part of our Nation's character since our 
founding. It does not come from government. It cannot be redistributed.
  The more government tries to redistribute success, the more strings 
it attaches because a handout from Washington always comes with strings 
attached.
  The President's health care law is a perfect example. It is built on 
shifting millions of people onto Medicaid, a program designed to take 
care of low-income Americans. Putting more people on Medicaid is not 
the same as giving them access to the medical care they need.
  Giving people unemployment benefits and funding short-term stimulus 
jobs is not the same as freeing up employers to hire more workers and 
providing long-term jobs and actual careers. Handing out benefits from 
Washington may provide a safety net in the short run, but when the 
short run turns permanent it robs people of the tools and incentives 
they need to succeed. It does even greater damage to our economy when 
President Obama pays for it by piling more debt on the backs of 
American taxpayers.
  We all recognize the value of the social safety net. None of us--I 
repeat, none of us--wants to eliminate that protection. To be true to 
this country's greatest traditions, it must be a real safety net to 
catch people who are falling. It must never become a net to entangle 
them so they cannot rise nor a comfortable hammock on which they choose 
to recline.
  Somewhere along the way Washington twisted the honorable American 
impulse to care for the most vulnerable among us. That shift now 
threatens to produce a culture of dependency that weakens our society 
and hurts the people it was meant to help.
  A half century ago, John F. Kennedy appealed to the great spirit of 
America when he said:

       ``Ask not what your country can do for you, ask what you 
     can do for your country.''

  Today, the Obama administration is trying to make Washington 
irreplaceable in the lives of Americans. The great irony, the great 
tragedy, is that no one is more trapped by this failed redistribution 
than the poorest--the people the President so often claims to be trying 
to help. That is part of the downside to the culture of dependency. It 
is why Washington can never provide for people as well as people could 
and should provide for themselves.
  President Obama is focused on fixing all of the faults he sees in the 
American people. Republicans are focusing on giving the American people 
the opportunity to succeed using their talents and their hard work. 
When Washington tells people: Don't worry; your government will take 
care of all your needs, it does them no service. It only deprives 
people of their freedoms to make their own choices, to stand on their 
own two feet, and to earn their success.
  The American people don't want Washington to pick winners and losers. 
They want a fair chance to win on their own. That is why they are 
asking for a clear and limited set of rules and the assurance that 
those rules apply to all of us, even those who donate to President 
Obama's reelection campaign. They are asking that the rules not change 
on the whims of some unelected bureaucrat in Washington. They want to 
know they still have the right to control their own choices.
  President Obama says it is fair for Washington to make the decisions 
so that everyone is equal in the end. He says it is fair to take more 
money from hard-working families and small businesses through the so-
called Buffett tax we are debating today.
  Tax increases will not help our fragile economy, and they will not 
put the brakes on Washington's out-of-control spending. Republicans 
want to promote economic growth for everyone, not equality of outcome 
at everyone's expense.
  Despite what President Obama may believe, America is not an unfair 
place. True fairness requires equal opportunity so all may pursue their 
American dream. That is what America was founded on, and that is the 
philosophy that must be allowed to lead us to a more prosperous future 
for all.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Maryland.
  Ms. MIKULSKI. Mr. President, I rise to speak on the Buffett rule. How 
much time is allocated to me?
  The ACTING PRESIDENT pro tempore. There is 18 minutes remaining on 
the Senator's side of the aisle.
  Ms. MIKULSKI. Mr. President, I will take no more than 5 minutes.
  I support the Buffett Rule because I do believe in fundamental 
fairness that if people live in the United States of America, if they 
benefit from the United States of America, both its national security 
and its public institutions, and the public progress because of that--
such as public education, land-grant colleges--they need to pay their 
fair share. This is what America is all about, fairness. And we are all 
in it together.
  I have heard all afternoon about, oh, this hard-working entrepreneur, 
and, oh, this hard-working small business person. Nobody gets to be 
that hard-working entrepreneur without the United States of America. 
They have gone to public schools. They have enjoyed public 
transportation. I could go through a variety of public institutions--
safety in our dams, now cybersecurity, wars that are fought by our 
military for which they will not go or will never go. So we need to 
have a way of paying our bills.
  When we hear the great President John F. Kennedy quoted saying: ``Ask 
not what your country can do for you, ask what you can do for your 
country,'' it is called pay your share.
  Let's talk about what the Buffett rule actually is and what the 
Senator from Rhode Island is advocating--and I salute him for offering 
it. This would ensure that high-earning Americans who make more than $1 
million a year pay at least 30 percent income tax on their effective 
rate on their second $1 million.
  Let me repeat what this is. People's first $1 million they keep at 
the same tax rate it is right this afternoon. What we are talking about 
is changing the tax rate not on their first $1 million but on their 
second $1 million. I do

[[Page 4705]]

not think that stifles entrepreneurship. I do not think it breaks the 
neck of small business.
  I know so many small businesses. They like to make that million bucks 
and then pay that. What the small business needs is not more tax 
breaks; they need more customers, which is about more jobs.
  I think this bill talks about this fairness. It would phase in 
additional tax liability for taxpayers earning between $1 million and 
$2 million to avoid a tax cliff, and they are saying: Oh, well, let's 
keep our money so we can give it to charity. This preserves the 
incentive for charitable giving.
  Quite frankly, from what we are told, the highest earning 400 
Americans make about $270 million each. They are the ones who paid an 
effective tax rate of 18 percent. Just think, they make $270 million. 
That is not exactly the entrepreneur in a garage. That is not exactly 
that small businessperson, a florist, or like my grandmother running 
that Polish bakery or like my father with his little grocery store.
  Mr. President, $270 million each--they pay 18 percent. So here it is 
April 16, they paid 18 percent. That, by the way, is the rule. All we 
are saying is they can pay that 18 percent on their first $1 million, 
but on that second $1 million they have to get into the game and start 
to pay 30 percent.
  I think this is a great idea. I want my colleagues, when we vote for 
cloture, to be able to do this. The Buffett rule supports fairness in 
the Tax Code so executives do not pay a lower rate than the people who 
work in the mail room or on the FedEx trucks delivering their products. 
It does support prosperity and entrepreneurship. As I said, it does not 
kick in until their second $1 million, and then it is phased in slowly.
  A lot of people are saying: We do not want these handouts from the 
Federal Government. It wrecks our entrepreneurship, our get-up-and-go.
  I do not believe that. I do not believe that at all. If that were 
true, then why is it who gets the biggest handouts in our country but 
those who get tax earmarks. We eliminated them in the Appropriations 
Committee, but we are yet to eliminate the tax earmarks in the Tax 
Code.
  Look how hard it was to get rid of the ethanol subsidy. Oh, my God. 
When we wanted to get rid of the oil and gas subsidy, one would think 
we were Darth Vader on the Senate floor.
  So every time we want to take away a lavish tax break that only helps 
a few get more, we are stymied or stifled. Actually if they employed as 
many people in their businesses as they employ lobbyists in Washington, 
we would be able to lower the unemployment rate.
  So the other party was willing to bring us to the brink of default--
remember when we were dealing with the debt ceiling--rather than tax 
billionaires. We continue now to have that same fight. This legislation 
we would pass is a modest downpayment on reforming the Tax Code. We do 
have to make it fairer, but this is a firm way to be able to do it.
  Sure, we have to look at the corporate tax code. We have to look at 
how to bring expatriated money overseas back home. Yes, we have to look 
at rates. Yes, by the way, we have to reward entrepreneurship and 
acknowledge the special challenges of being a small- and medium-size 
business. But that is long range, and under the arcane rules of our 
Senate we are now so stymied in bringing up that legislation.
  We could at least take one giant step forward to make our Tax Code 
fairer by passing the legislation called the Buffett rule, named after 
Warren Buffett, one of our great American people, a guy who gives 
capitalism real meaning in our country. He says: Let me pay, and people 
like me pay, the same rate of taxes as my administrative assistant in 
the front office.
  I think Buffett had a good idea. Let's codify it. Let's pass it in 
the Senate today.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Arizona.
  Mr. KYL. Mr. President, let's ask ourselves a question. What is the 
purpose of taxes? Do we tax people to punish them for their success or 
do we do it to raise revenue for the government? Well, the answer is, 
of course, at least up to now, the purpose of taxes is to raise the 
revenue the government needs to perform its duties and to do that in 
the least harmful way possible.
  President Obama, however, has a different idea about the purpose of 
taxes. He thinks the government should take more from some people just 
because they are rich, even if the tax increases hurt the economy.
  So this week the Senate will vote on what is called the Pay A Fair 
Share Act or, as described by President Obama, the Buffett tax. This 
legislation would create a new 30-percent alternative minimum tax for 
filers who make $1 million or more, which would include many successful 
small businesses. Unfortunately, the legislation would hurt small 
businesses more than it would raise revenue for the government.
  Today I want to talk about why this legislation is fundamentally 
misguided and why it would be harmful to businesses, workers, and the 
economy. The Buffett tax may make for good politics for President Obama 
on the campaign trail, but it is bad policy. It is deeply flawed.
  First, let's start with its premise. There is a key misconception 
about Warren Buffett's tax rate. The notion that Mr. Buffett pays a 
lower tax rate than his secretary is based on a fundamental 
misunderstanding of the Tax Code.
  Mr. Buffett--and, I would add, many older Americans--obtains most of 
his income from investments. That income is taxed at the capital gains 
rate. Mr. Buffett and President Obama would have us believe capital 
gains income gets preferential treatment in the Tax Code, but that does 
not tell the real story.
  Capital income is actually taxed twice. First, it is taxed at the 35-
percent rate that corporations pay on their income--it is taxed; the 
money is paid to the government--and then it is taxed again when the 
distribution of capital gains or dividends is made to the investors, 
when it is passed on to shareholders as dividends or capital gains. 
That means the tax rate is already far higher than 30 percent. It is 
actually not exactly 30 plus 15 percent, but it is higher than 30 
percent, and it is closer to 45 percent.
  President Obama ignores these facts when he says Mr. Buffett pays a 
lower tax rate than his secretary. We have to count it twice, not just 
the second time.
  That leads me to my second point: the fairness of the current Tax 
Code. Does it really favor the wealthy at the expense of others, as 
President Obama argues? Perhaps one could cherry-pick some random 
statistics to show that one person or another pays more or less, but 
the actual tax numbers show the real progressivity of the American 
Internal Revenue Code. Interestingly enough, among all the 
industrialized countries in the world ours is the most progressive.
  In other words, the U.S. income-tax code has the wealthier people 
paying a far higher percentage of income taxes than any other country 
in the industrialized world--yes, even more than Sweden and even more 
than France and even more than the other countries in Europe.
  According to Congressional Budget Office data, the average tax rate 
paid by middle-income Americans is 14.2 percent. In contrast, the 
average tax rate paid by a high-income American is 31.2 percent, more 
than twice as much. So the average tax the secretary or somebody else 
like that might pay is 14.2 percent. The average tax paid by high-
income Americans is 31.2 percent.
  Incidentally, President Obama's effective tax rate this year is 20.5 
percent. Should he be paying more or is that enough? He has a tough 
job.
  Here are some other interesting tax facts. The top 1 percent of 
taxpayers pays 38 percent of total income taxes--actually, I think 
these numbers are dated; it is now closer to 40 percent--and that top 1 
percent of taxpayers only earns 20 percent of the total income.
  So here is the question of fairness: We have the top 1 percent--they 
are the top 1 percent because they earn the top 20 percent of all 
income, the top

[[Page 4706]]

fifth, but they pay almost twice as much in taxes, 38 percent in total 
income taxes.
  How about the top 2 percent of taxpayers? Well, they pay 48.68 
percent--nearly 50 percent, in other words--of income taxes, and they 
earn 27.95 percent of total income. So we have the top 2 percent paying 
almost half of all income taxes. Is that fair?
  The top 5 percent pays 58.7 percent; earns 34.7 percent. The top 10 
percent pays 69.9 percent--let's say 70 percent--so we have the top 10 
percent of taxpayers paying 70 percent of all the taxes, earning 45 
percent of the income.
  Well, those are certainly the wealthy, and they are certainly paying 
a big share.
  How about the less wealthy? Well, the bottom 95 percent--in other 
words, everybody but the top 5 percent--pays 41.3 percent of income 
taxes; earns 65 percent of the income. Is this fair? Maybe it is not 
fair that the top 2 percent pays almost half of all the income taxes. 
How much would be fair? Should they pay 90 percent, 95 percent?
  How about the 50 percent of households that pay no taxes and yet 
receive the same or greater benefits than those who do? Is that fair?
  The Joint Committee on Taxation estimates that 51 percent of all 
households, which includes both filers and nonfilers, had either zero 
or negative income tax liability in 2009. People who do not share in 
the sacrifice of paying taxes have little direct incentive to care 
whether the government is spending and taxing too much. Maybe that is 
why the President has no problem with even more Americans getting a 
free ride.
  Here are a few more statistics. The highest 1 percent of income 
earners have not seen the share of the income tax burden decline. In 
fact, their share of income is essentially the same as it was in 2000, 
but their share of taxes paid is higher. Collectively, only taxpayers 
with incomes greater than $100,000 a year pay a share of taxes that is 
greater than their share of income.
  Actually, I think it is hard to argue that our current Tax Code that 
taxes the wealthy to such a high degree is unfair. While the President 
says it is not fair, I find it interesting that his own Treasury 
Secretary seems to agree that the current system is fair.
  Let me read a portion of the transcript from a Finance Committee 
hearing with Secretary Geithner earlier this year. I asked him: Do you 
think it is fair that the top 1 percent of earners in the United States 
pays just about 40 percent of the income taxes? Secretary Geithner's 
response: I do, because I do not see how the alternatives are more 
fair. Next, I asked him if he thought it was fair that the top 3 
percent pays as much as the other 97 percent of taxpayers in income 
tax. Secretary Geithner responded, ``Again, I do.'' So if we want an 
income tax system that is fair according to the Obama administration's 
own standards, we already have it. The argument that top-tier earners 
are not doing enough just does not hold water.
  The third problem with the Buffett tax is that it would harm many 
small businesses. According to the most recent Treasury Department 
data, 392,000 tax returns reported income of $1 million or more. Of 
those, 331,000 reported business income and 311,000 met the Treasury's 
definition of ``business owner.'' So this is a tax that would 
disproportionately affect small businesses and other job creators.
  Four out of five tax filers that would be affected by the Buffett tax 
are the very businesses we are counting on to lead us back to an 
economic recovery. If enacted, these tax increases would have a 
negative effect on employers trying to create jobs. And this is not 
just my opinion. Take, for example, the International Franchise 
Association, which recently said this: Franchise business owners could 
be significantly challenged to grow and create new jobs as a result of 
the Buffett rule, a tax increase on individuals and small business 
owners.
  It continues:

       Taxing job creators will seriously impede the ability of 
     franchise businesses to expand their operations and to create 
     new jobs, particularly multi-unit franchise operators and the 
     majority of franchise businesses who file their business 
     income on their own personal tax return.

  So these are the very folks the Treasury Department identified as 
paying taxes as individuals but who are, in fact, business owners.
  Under current law, a massive tax increase on income, capital gains, 
and dividends is already set to occur on January 1 of next year. In 
addition, under ObamaCare, some Americans will be hit with a 3.8-
percent investment surcharge beginning next year. Imagine what all of 
these taxes will do to small businesses and startup companies.
  But that is not enough new taxing for President Obama in his war 
against investments and success. According to economist Stephen Entin, 
tax increases on capital are some of the most destructive to the 
economy. He estimates that tax hikes on capital gains, dividends, and 
the top two individual tax rates, which are already scheduled to occur 
in 2013, will shrink the economy by 6 percent, will lower wages by 5 
percent, will decrease capital stock by almost 16 percent, and will 
lose the Federal Government almost $100 billion in tax revenue.
  Adding an additional Buffett tax on capital will only decrease wages 
and economic growth even further. Why is this? Because high taxes on 
income, particularly investment income, depress capital formation. 
There are fewer investments, which damages the abilities of businesses 
to grow, to create jobs, or to pay higher wages.
  I challenge my colleagues to ask a roomful of economists this 
question: Does increasing the cost of capital lead to higher or lower 
economic growth and job creation? Well, the answer is obvious. As 
President Kennedy said when he endorsed a capital gains tax cut, ``The 
tax on capital gains directly affects investment decisions, the 
mobility and the risk flow of capital, as well as the ease or 
difficulty experienced by new ventures in obtaining capital and thereby 
the strength and potential for growth in the economy.''
  It is also important to remember that we are not making tax policy in 
a vacuum. We are competing for capital and investments with every other 
nation on Earth. The President has conceded that our high corporate tax 
rate harms our international competitiveness and has expressed tepid 
support for lowering it. But those benefits would be erased if capital 
gains taxes are increased dramatically.
  As the Wall Street Journal points out, ``Lowering the corporate tax 
rate makes the U.S. more competitive, but the tax change is self-
defeating if it's combined with an even larger rise in the investment 
income taxes on capital gains and dividends.''
  According to a recent Ernst & Young study, the integrated tax rate on 
capital gains is already over 50 percent--50.8 percent to be exact. 
That is more than twice the rate in China, for example.
  If Congress does nothing, capital gains rates will rise again to 56.7 
percent next year. That is the second highest in the world. If the 
Buffett tax increase is layered on top, taxes will consume almost two-
thirds of capital gains, and we will have the highest integrated rate 
by far of any of our international competitors. We have to remember 
that in a mobile world economy, capital is highly mobile. Does anyone 
believe that such a confiscatory capital gains rate imposed by the 
Buffett tax would not lead to less investment in the United States and 
more in other countries? As somebody said, this is not just shooting 
ourselves in the foot, it is shooting ourselves in the head.
  Let me address President Obama's suggestions that the Buffett tax 
somehow constitutes fundamental tax reform and that President Reagan 
would have supported it. I think I can imagine President Reagan 
responding: Well, there you go again.
  The Washington Post has a Fact Checker op-ed, and here is how they 
set the record straight on President Obama's claim that he was pushing 
the same concept--his words--as President Reagan:

       Contrary to Obama's suggestion that President Reagan was 
     specifically arguing

[[Page 4707]]

     for a new tax provision aimed at the superwealthy, Reagan was 
     barnstorming the country in an effort to reduce taxes for all 
     Americans, mainly by cutting rates, simplifying the tax 
     system, and eliminating tax shelters that allowed some people 
     to avoid paying any taxes at all. In other words, Reagan was 
     pushing for a tax cut for everyone, not just an increase on a 
     few.
       Obama and Reagan did use similar anecdotes--and even the 
     phrase ``fair share''--but in service of different goals.

  President Reagan's tax reform should never be confused with a harmful 
political gimmick such as the Buffett tax.
  I would like to show how higher capital gains taxes have a negative 
effect on revenue.
  Ever since the bipartisan capital gains cut in 1978, a pattern has 
repeated itself over and over: Raising the capital gains rate reduces 
revenues. Lowering it has led to revenue increases. That is partially 
because capital gains taxes are an elective tax. The tax is only paid 
when investors sell their assets. And frequently they wait to sell 
their assets for the rates to go down when it will cost them less to 
sell those assets.
  The Wall Street Journal recently produced a chart to this effect, and 
I am just going to summarize it.
  In 1978 President Carter signed an amendment into law that cut the 
capital gains rate from 40 to 28 percent. What was the result? Less 
revenue? No. Revenue from capital gains increased by nearly $3 billion, 
and yet the rate was reduced.
  Congress cut the capital gains rate again to 20 percent in 1981 as 
part of the Reagan tax cuts. As the Journal notes, revenue did not fall 
in 1982. By 1983 capital gains revenues soared to $18.7 billion: Lower 
rate, higher revenue.
  In 1986 the capital gains tax rate was returned to 28 percent as part 
of the tax reform package. Guess what. Revenues soared as investors 
cashed in their gains before the tax increases hit and then plunged in 
1987.
  The point is investors get to play. They get to decide. When the rate 
goes down, they can sell their property with less cost. When the rate 
goes up, they hang on to their property. They do not sell it because 
they will have to pay more when they do.
  In 1997 President Clinton and congressional Republicans cut the rate 
back to 20 percent, and revenues from capital gains doubled by the year 
2000 to $127.63 billion.
  The Journal notes:

       Congress shouldn't be fooled by government forecasters who 
     predict a revenue boost from a higher capital gains rate. 
     They've blown this call every time.

  My last point addresses what the Buffett tax would do for the Federal 
debt. The answer is next to nothing.
  Let's examine the nonpartisan Joint Committee on Taxation's estimate 
of the revenue that would be raised from the Buffett tax. Bear in mind 
that these estimates do not include the effect on economic growth, 
which could dramatically reduce rather than raise Federal revenues, as 
history has shown. But let's take the score at face value. Even without 
counting the negative impact on the economy, the Buffett tax would 
raise a mere pittance in the scope of Federal budgets.
  When President Obama first proposed the tax, he declared that ``it 
could raise enough money to stabilize our debt and deficits for the 
next decade.'' He said, ``This is not politics, it's math.'' Well, 
let's look at the math. The Joint Committee on Taxation estimate shows 
that the Buffett tax would raise only about $1 billion this year. So 
instead of a deficit this year of $1.079 trillion, we would have a 
deficit of $1.078 trillion. That does not exactly raise enough money to 
stabilize our debt and deficits for the next decade, as the President 
said.
  Over the first 5 years, the Joint Tax Committee shows that the 
Buffett tax would collect about $14.7 billion. To put it in 
perspective, that will amount to less than .08 percent of the projected 
national debt in 5 years. And in the year 2014 the proposal is 
estimated to actually lose over $6 billion in revenue. Why is this? 
Again, because capital gains taxes are largely voluntary. The investors 
targeted by the Buffett tax are generally able to decide when to sell 
an asset. They can manipulate their sale to stay below the triggering 
threshold of $1 million in the bill. This produces a lock, in effect, 
on capital as investments stay stagnant. So what is the end result? 
Little if any revenue is actually raised. Business investments decline. 
In turn, wages and hiring decline.
  Again, if the purpose of taxes is to raise needed revenue rather than 
punish people, this bill completely flunks the test. So while this 
proposed tax increase might make some people feel good, it will not 
solve any of our budget problems. It will likely destroy jobs and 
growth, and, as history has shown, depressed economic growth from a tax 
increase will make our budget problems even worse than they are now.
  In conclusion, the economy, as we know, is limping along at an anemic 
growth rate. Gas is $4 a gallon or more, and 20 million Americans are 
unemployed or underemployed. The economic downturn has taken a huge 
toll on American families. They want Washington to focus on legislation 
that will have an impact on jobs and gas prices. Instead, we are 
debating a show bill that has no chance of passing and would not create 
a single American job. What happened to jobs, jobs, jobs? Remember that 
four-letter word, ``jobs''?
  The President claims to be focused like a laser on the economy. 
Instead, it appears that there is only one job that he is focused on 
with this political proposal. I submit that here in the Senate we 
should be focused on jobs and energy legislation that can pass, not tax 
hikes through show votes that are designed to fail.
  Mr. ENZI. Mr. President, I rise today to express my disappointment 
that the administration and my friends on the other side of the aisle 
continue to avoid making the hard decisions to address our Nation's 
significant debt and annual deficits. Instead, they are turning the 
Nation's attention to a talking point, a shell, a sham, a political 
hoax designed to distract this country from our real financial problems 
and the real solutions we will need to get us out of this mess.
  The Paying a Fair Share Act of 2012, dubbed the Buffett rule, that 
they describe as restoring tax fairness does nothing to address the 
fiscal disaster we are facing. The Buffett rule is, by President 
Obama's own admission, a gimmick. My friends, our country can no longer 
afford photo-op governance.
  The national debt has risen to over $15 trillion, or nearly $48,000 
per person in the United States, and this figure keeps rising under an 
administration that consistently fights spending cuts of any kind. We 
must make spending cuts if we are going to solve our fiscal problems.
  Remember the President's debt commission, the Simpson-Bowles debt 
commission the President appointed then summarily ignored? Not everyone 
has ignored it. I continue to work with my colleagues on legislation to 
get the country back on track financially. I have introduced a bill 
called the one cent solution. It is also known as the penny plan or the 
1-percent solution. My one cent solution bill would cut spending by 1 
percent for 7 years and achieve a balanced budget in the eighth year. 
Every family can imagine taking one penny out of every dollar they 
spend. The Federal Government should be able to do the same.
  In February, President Obama submitted his fiscal year 2013 budget 
proposal to Congress. I hope it was the last budget proposal he will 
have the opportunity to submit. Like his budget last year in the 
Senate, the President's Budget in the House this year failed to get a 
single vote. Even Democrats shunned it. It failed 414 to 0. The Buffett 
rule is pulled from the same bag of tricks.
  Despite his promises of fiscal discipline and cutting the deficit in 
half by the end of his first term, President Obama presented the 
American people with another budget that spends too much, borrows too 
much, and taxes too much.
  It is time for a change. Congress should take the lead by passing a 
budget that includes strong deficit reduction provisions and sets the 
country on a path out of our $15 trillion debt.

[[Page 4708]]

When you are in a hole, you stop digging. When you are broke, you stop 
spending.
  Rather than crafting a bipartisan measure to deal with these issues, 
the administration instead has turned its attention to the Buffett 
rule. This bill is symptomatic of a much larger problem plaguing this 
administration--the unwillingness to address the country's long-term 
fiscal imbalance and the diversion of the Nation's attention to a 
provision marketed as enhancing ``tax fairness'' that ultimately could 
impact very few taxpayers and does little to address the Nation's debt 
and deficits. The Buffett rule is estimated by the Joint Committee on 
Taxation to raise approximately $47 billion over 10 years under current 
law. Even if current tax rates are extended past their current 
expiration date of December 31, 2012, the bill is estimated to raise 
approximately $160 billion over 10 years. The Nation's debt level is 
now over $15 trillion, and yearly deficits are running over $1 trillion 
under this administration. This bill is not a significant debt and 
deficit reduction measure; instead, it is simply an attempt to raise 
taxes on owners of capital and job creators when they can least afford 
it. And, no, it is not a step in the right direction because it 
distracts us from real solutions. It is a political stunt.
  The administration is ignoring the fact that four out of five people 
with incomes over $1 million and who would be hit by higher taxes as a 
result of the Buffett rule or any other millionaire tax are business 
owners, and these are the people the country needs to create new jobs. 
A millionaire tax increase like the Buffett rule means that over one-
third of all business income reported on individual income tax returns 
would be taxed more. Particularly for those small businesses with 
narrow profit margins, these additional taxes would take even more 
money out of their businesses and make it more difficult to invest, 
expand, and hire.
  Warren Buffett, for whom this bill is named, generated most of his 
$40 million in taxable income in 2010 from dividends and capital gains, 
which under current law is taxed at 15 percent. Taking into account his 
wages of approximately $100,000 that are taxed at up to 35 percent, Mr. 
Buffett's effective tax rate was approximately 17.4 percent. What if 
Mr. Buffett and other millionaires who are corporate shareholders were 
instead taxed like most small business owners who operate flow-through 
business such as sole proprietorships, partnerships, and S 
corporations, and are taxed immediately on their business profits at 
ordinary income tax rates of up to 35 percent? Mr. Buffett's tax rate 
would have been about 35 percent, double what he is reportedly paying 
now. Given that his share of the corporate profits in any year could be 
much greater than the dividends he currently receives, Mr. Buffett 
himself could be paying significantly more in taxes to the Federal 
Government. I wonder if this would cause Mr. Buffett to reconsider his 
position on tax fairness. My friends, I am concerned that under the 
guise of tax fairness this administration will continue to raise taxes 
in order to support its out-of-control spending binge.
  This administration either fails or chooses not to recognize that the 
current-law alternative minimum tax, or AMT, was put in place nearly 30 
years ago to do exactly what the Buffett rule is intended to do--ensure 
that high-income taxpayers pay at least a minimum amount of U.S. tax, 
regardless of various tax deductions and tax credits that they might be 
able to claim on their tax return. In that regard, this bill simply 
layers on yet another complex tax provision on top of the already 
complex U.S. tax system rather than addressing the underlying problems 
of the overall Tax Code. The country needs and deserves comprehensive 
tax reform that makes the system simpler and fairer for all taxpayers. 
At the very least, the administration should start by focusing on 
fixing the current Tax Code before adding yet another layer of 
complexity to it.
  Those who named this bill want you to think it is an appropriate 
method by which to ensure everyone pays their fair share. We need 
fairness; however, the manner in which that goal is achieved is just as 
important as the goal itself. In that regard, the Buffett rule misses 
the mark for each of the reasons I have just mentioned.
  This bill is yet another missed opportunity for this administration 
to address the most pressing issues of the day, including significant 
tax issues that confront us at the end of 2012. The most notable tax 
issues include the prevention of a massive tax hike on all taxpayers on 
January 1, 2013, as a result of the expiration of current income tax 
rates, the extension of tax provisions that expired at the end of 2011 
and that are scheduled to expire at the end of 2012, providing a patch 
for the AMT for 2012 so that it does not ensnare millions of middle-
income taxpayers, and reforming the estate tax to prevent a significant 
rate hike on January 1, 2013.
  Taking all of this into account, is the President flying around the 
country trumpeting the Buffett rule as the solution to what he 
perceives is a tax fairness problem really the best use of his and the 
country's time? We have more to think about than his reelection. There 
is a better path forward to achieve the desired result of the Buffett 
rule. That path includes comprehensive tax reform that results in a tax 
code that is simple, fair, and progrowth. If we combine that with 
appropriate spending cuts, our country will be able to get out from 
under the heavy weight of our current and escalating debt burden.
  Ms. COLLINS. Mr. President, today I will vote in favor of proceeding 
to the President's latest tax plan because it is essential we begin the 
debate on comprehensive tax reform. I do this despite my disappointment 
that the President has not proposed a serious starting point. Our 
Nation's tax code needs to be overhauled, from top to bottom. The tax 
plan offered by the bipartisan Bowles-Simpson Commission--a commission 
the President himself created--offered a proposal a year and a half ago 
that should have been the foundation for a serious debate for such an 
overhaul. But the President failed to show leadership, and allowed that 
proposal to wallow. Instead, he has asked us to consider a bill today 
that he himself has called ``a gimmick.''
  I believe we should be debating comprehensive tax reform aimed at 
creating a simpler, fairer, pro-growth tax code. Such reform should 
lower rates for job creators and middle-income Americans, while 
increasing the share of taxes paid by the wealthy.
  A key to reform is simplification: just last year, according to the 
IRS, there were 579 changes to a tax code that is already more than 
65,000 pages long. No one can keep up such complexity--it hobbles our 
economy, and exasperates the American taxpayer.
  I have said that multimillionaires and billionaires can pay more to 
help us deal with our deficit, and I have voted for surtaxes on the 
very wealthy in the past. In fact, I have even introduced legislation 
calling for such surtaxes. However, I have maintained that any such 
legislation must include a ``carve out'' to protect small business 
owners who pay taxes through the individual income tax system. Our 
nation's small businesses must not be lumped-in with millionaires and 
billionaires and exposed to the same type of taxes designed for the 
very wealthy. That is why a ``carve-out'' to shield small businesses 
owners from tax increases is so important. These small business owner-
operators are on the front lines of our economy, and of the communities 
in which they live. The income that shows up on their tax returns is 
critical to their ability to finance investment, and grow their 
businesses. Left in their hands, this income will lead to more jobs, 
and will buy the tools that help American workers compete.
  Comprehensive tax reform and simplification is not only a matter of 
fairness, but is essential to laying the foundation for our nation's 
long-term economic growth. There is no contradiction between fairness 
and growth--both can be advanced together. I urge my colleagues to join 
me in seeking true reform that advances both of these goals.

[[Page 4709]]

  The PRESIDING OFFICER (Mr. Blumenthal). The Senator from Vermont.
  Mr. SANDERS. Mr. President, I rise in strong support of the Paying a 
Fair Share Act. I commend Senator Whitehouse for introducing this 
important legislation.
  It is absurd that at a time when our country has a $15 trillion 
national debt and enormous unmet needs, the wealthiest people in this 
country have an effective tax rate that is lower than many middle-class 
workers. It makes no sense that the richest 400 people in our country 
who earned an average of more than $270 million each in 2008 pay an 
effective tax rate of just 18 percent, which is less than many small 
businessmen, nurses, teachers, police officers, et cetera. That is 
wrong from a moral perspective. It is also very bad economic policy.
  The issue we are debating speaks to a much larger crisis that is 
taking place in America; that is, that in many important ways the 
United States is departing from its democratic tradition, which has 
always included a strong and growing middle class, and is moving 
rapidly into an oligarchic form of government in which almost all 
wealth and power resides in the hands of the very richest people in our 
society--the top 1 percent. That is not what America is supposed to be 
about.
  Let me mention a recent study that shows not only why we should pass 
this Buffett rule but why we should go, in fact, much further. An 
economist at the University of California, Professor Emmanuel Saez, 
studying tax returns, found that in 2010, 93 percent of all new income 
generated during that year went to the top 1 percent. Let me repeat 
that. Between 2009 and 2010--the last year we have statistics on this 
issue--93 percent of all new income went to the top 1 percent, while 
the rest of the people--the bottom 99 percent--were able to receive 7 
percent. Even more incredible is the fact that 37 percent of that new 
income went to the top one-hundredth of 1 percent. In other words, of 
the $309 billion in new income gained in 2010, $288 billion went to the 
top 1 percent. Only $21 billion in new income went to the bottom 99 
percent.
  Today the top 1 percent earns over 20 percent of all income in this 
country, which is more than the bottom 50 percent. In terms of the 
distribution of wealth, accumulated income, as hard as it may be for us 
to believe, as a country that believes in mobility, a country that 
believes in equality, today we have a situation where the 400 
wealthiest people in America now own more wealth than the bottom half 
of America--150 million people. Four hundred people here own more 
wealth than the bottom 150 million Americans, and that gap between the 
very rich and everybody else is now wider than it has been in this 
country since the late 1920s. We have, by far, the most unequal 
distribution of income and wealth of any major country on Earth.
  That is where we are as a nation, and it is not a good place to be. 
The richest people and the largest corporations are doing phenomenally 
well, while the middle class is collapsing and poverty increases. This 
is not what democracy looks like; this is what oligarchy and plutocracy 
look like.
  To compound this extremely unfair situation, when millionaires and 
billionaires are paying nearly the lowest effective tax rate for the 
rich in decades, our deficit problems only grow worse. In other words, 
not only are the real and effective tax rates for the rich lower than 
for many middle-class workers, their low effective tax rates are having 
a very negative impact on our deficit. In fact, as a result of the tax 
breaks given to the wealthy and large corporations, revenue as a 
percentage of GDP is at 14.8 percent, the lowest in more than 50 years.
  Let us pass the Buffett rule today, but let us do much more in the 
future. Instead of cutting Social Security, Medicare, Medicaid, 
education, and other programs of vital importance to middle-class and 
working families in this country, as many of my Republican colleagues 
would like to do, let us develop both personal and corporate tax 
policies that are fair and will protect the best interests of our 
country.
  Nobody should be talking about maintaining huge tax breaks for 
millionaires and billionaires and in the same breath talk about cutting 
Social Security, Medicare, Medicaid--the needs of our children and the 
needs of the most vulnerable people in our country. That is wrong and 
that is not what America is about.
  With that, I yield the floor.
  Mr. INOUYE. Mr. President, I come from humble beginnings. We did not 
have a lot growing up but we always had what we needed. My mother and 
father worked very hard to provide for our family and you can be sure 
they paid their fair share of taxes on their living wage. In the nearly 
50 years that I have served in the Senate, I have watched the very rich 
and their supporters in the Congress whittle away at the Tax Code to 
the extent that today the average tax rate paid by the highest earning 
Americans has fallen to the point that one in four taxpayers with an 
annual income greater than $1 million pays less than millions of 
working middle-class families. How is that fair? We are making critical 
decisions about how we cut and spend government funds and it will go a 
long way to reestablishing fiscal fairness in this country if the very 
wealthy pay their fair share to support government services and 
initiatives.
  Mr. LEVIN. Mr. President, one of the unfortunate characteristics of 
the American economy for the last few decades has been the rising gap 
between upper and middle-income Americans. Increasingly, those in the 
upper echelons of income and wealth have seen their fortunes rise, 
while the vast majority of Americans have coped with stagnant income 
and increasing insecurity. In recent decades, most families have had to 
cope with a reduced ability to afford the things middle-class Americans 
once took for granted, a comfortable home, college educations for the 
kids, and a secure retirement. At the same time, incomes have risen 
remarkably for those at the very top of the income scale. Today, by 
some measures, income inequality is greater in our country than at any 
time since just before the Great Depression.
  This should worry us all. It should worry us because a way of life 
has become endangered. That way of life--one in which, if you work 
hard, play by the rules and plan for the future, you and your family 
will prosper came to be known as the ``American way.'' But 
increasingly, the American way has been replaced by one in which the 
very wealthy do well while everyone else struggles. Instead of all 
boats rising together, it is the yachts that have risen--good economy 
or bad--while all the other boats have been stuck in place and taking 
on water.
  Today we have a chance to begin the work of closing that income gap 
between the wealthiest Americans and the middle class. We can, by 
adopting this motion to proceed, begin the debate on how best to 
address the worrisome and growing gap. But that debate cannot begin 
unless our colleagues on the Republican side agree to allow it to 
begin. I, for one, am eager to have this debate--I believe the American 
people want and deserve this debate. Our Republican colleagues have 
very different ideas about this problem, and may even deny there is a 
problem. But the people we represent believe this is a problem, and we 
should respond to their concerns.
  There are some who question whether income inequality is rising. 
These denials melt away in the face of enormous evidence to the 
contrary. To deny rising income inequality is to deny plain facts. Here 
are a few of those facts.
  As of 2008, the richest 1 percent of Americans took home almost 24 
percent of total income. This is up from 10 percent in 1980. Half of 
all income in the United States went to the top 10 percent of 
Americans. And, the vast majority of Americans, the bottom 80 percent, 
received less than a quarter of total income in the United States.
  The nonpartisan Congressional Budget Office issued a report last year 
on changes in income distribution since 1979. CBO's researchers found 
that over that period, after-tax income ``for households at the higher 
end of the income scale rose much more rapidly

[[Page 4710]]

than income for households in the middle and at the lower end of the 
income scale.'' CBO found that for the wealthiest one percent of 
Americans, real after-tax income grew by 275 percent. Those in the next 
19 percent--that is, the top 20 percent minus the one percent at the 
very top--saw after-tax income growth of 65 percent. And for the 60 
percent of Americans in the middle of the income scale, between the top 
and bottom 20 percent, after-tax income grew by just 40 percent. So, 
income for the top 1 percent of Americans grew at a rate nearly seven 
times greater than growth in middle-class incomes.
  There are two striking things about CBO's findings. The first is that 
the biggest driver of growing inequality is the growing gap between 
those at the very top of the scale and everyone else. Even those in the 
top 20 percent of incomes--those doing very well by anyone's 
standards--have fallen behind the top 1 percent.
  The second striking finding is what CBO found about the effects of 
federal tax and transfer policy. In fact, CBO reported that while the 
rise in inequality stems from a number of factors, one significant 
contributor is federal policies--including the decisions we all make 
here in this Congress. For instance, CBO said that the rise in after-
tax income for the top 1 percent may come in part from tax changes we 
made in 1986. Those changes lowered the top personal income tax rate 
below the top corporate tax rate, encouraging many wealthy Americans to 
reclassify corporate income as personal income to qualify for the lower 
rate.
  More worrisome is the fact that CBO found that federal tax policy has 
actually made inequality worse. Inequality of after-tax income is 
higher than inequality of pre-tax income. In part, that is because our 
tax system has shifted away from income taxes--which are progressive, 
asking the wealthier to pay a higher rate--to payroll taxes, a burden 
that falls on all income-earners regardless of how wealthy. These are 
the kinds of changes that have led to billionaire investors and hedge-
fund managers paying a lower tax rate than their secretaries.
  One way that government could fight this rising gap is with transfer 
payments--benefits paid by government to the less wealthy to try to 
counteract difference in income. Some, including some of our Republican 
colleagues, have made the case that transfer payments are growing 
larger, or that government policy is making people increasingly 
dependent on government handouts. The CBO report answers this argument. 
CBO found: ``The amount of government transfer payments--including 
federal, state, and local transfers--relative to household market 
income was relatively constant from 1979 through 2007, ranging between 
10 percent and 12 percent with no discernible trend.'' So, while there 
has been a rising gap in pre-tax income since 1979, and government tax 
policy has widened that gap, federal transfer payments have done 
nothing to balance it.
  These facts are telling. But we should not forget that behind all 
these numbers, all these facts and figures, are real people--and most 
of those people are struggling to get by. They should be uppermost in 
our minds.
  The rise in inequality is not the result of a single factor, and it 
did not happen overnight. So we will not reverse it overnight. It will 
take sustained effort. That effort starts with acknowledging that there 
is a problem, and I hope our Republican colleagues will avoid the 
denialism that is all too prevalent on this issue. But if we can first 
acknowledge the problem, we then can do something about it, beginning 
with this vote today.
  The proposal before us simply says that those at the very top of the 
income ladder, those making more than $1 million a year, will, at a 
minimum, pay a federal income tax rate of 30 percent on their income 
above $1 million. Most Americans consider that simple common sense. The 
fact that wealthy corporate executives pay a lower tax rate than 
construction workers or waitresses or teachers or police officers is 
fundamentally unfair. And at a time when budgets are extraordinarily 
tight, and getting tighter, it makes no sense for government to 
subsidize, through tax policy, the growing income gap between the top 
few and ordinary Americans.
  This bill will not solve all our problems. Even if it passes, there 
will be much more work to do--especially because this problem is, 
through tax policy in particular, a problem Congress has helped to 
create. But that work must start somewhere. The debate must begin--and 
it will begin, if we vote to let it begin. I hope we will begin that 
debate today.
  Mrs. BOXER. Mr. President, I support the Paying a Fair Share Act 
because it will help bring fairness to our Tax Code. In large part 
because of the irresponsible policies of President George W. Bush, the 
very wealthiest taxpayers have seen their tax rates drop by half over 
the last 50 years, even as their incomes have skyrocketed. The Tax Code 
has become so out-of-balance that one in four millionaires pays a lower 
tax rate than do millions of middle-class families, and in 2011 an 
estimated 7,000 millionaires paid no Federal income tax at all.
  Responsible millionaires understand that a fair tax system is in our 
country's best interest. One Californian, Andy Rappaport, told my staff 
that over the past 8 years, his average Federal tax rate has been only 
16 percent after charitable contributions. Meanwhile, working families 
making $60,000 to $100,000 per year pay average Federal tax rates of 17 
or 18 percent.
  Mr. Rappaport said: ``Those of us who are doing unprecedentedly well 
have built our success on a foundation of widespread well being and 
opportunity, not to mention adequate investments in education, 
research, and infrastructure. . . . It's not fair to ask those who make 
less than us to do without or to shoulder more than their share of our 
national investment burden.'' California entrepreneur Garrett Gruener 
wrote in the Los Angeles Times: ``For nearly the last decade, I've paid 
income taxes at the lowest rates of my professional career. . . . For 
the good of the country, we need to tax people like me more.''
  In addition to opposing this common-sense proposal, our Republican 
colleagues want to cut valuable social programs to pay for another tax 
cut for the rich. The House-passed Ryan Budget would give high-income 
taxpayers an additional tax cut of at least $150,000 per year--a tax 
cut equal to three times the median household income, and more than ten 
times the average annual Social Security benefit--while cutting 
programs like food stamps and Pell Grants which provide security and 
opportunity to millions of lower-income Americans. Our Republican 
colleagues seem devoted to the interests of the wealthiest 1 percent 
above all else.
  The Paying a Fair Share Act would only affect the top one-tenth of 1 
percent of taxpayers, those with adjusted gross income over $1 million 
per year. It preserves the incentive for charitable giving, which is so 
important for our religious organizations, nonprofits, and 
universities.
  And these millionaires and billionaires are not the ``job creators'' 
the Republicans say they are, because the vast majority of job creators 
are small business owners who earn far less than $1 million per year. 
In 2009, only 1.3 percent of taxpayers with business income made more 
than $1 million per year. The bill is supported by small business 
groups including the Main Street Alliance, American Sustainable 
Business Council, and the California Association for Micro Enterprise 
Opportunity. It also has the support of AFCSME, AFL-CIO, the 
International Brotherhood of Teamsters, United Auto Workers, the 
National Education Association, and many others. I urge my colleagues 
to support this important legislation, which will bring much-needed 
fairness to our Tax Code.
  Mr. REED. Mr. President, I rise today to join my fellow Senator from 
Rhode Island's effort to restore a basic level of fairness to our Tax 
Code. Senator Whitehouse has done an extraordinary job in fighting to 
return some sense of balance to a broken system.

[[Page 4711]]

  Most Americans agree Senator Whitehouse's legislation is 
fundamentally fair and they want to see it become law because as we all 
know, the Tax Code is riddled with loopholes that benefit the 
wealthiest Americans. It is past time we take this first step towards 
fixing a system that allows millionaires and billionaires to pay a 
lower tax rate than middle-class Americans. This is a defining vote--it 
is about who you stand for and with, working men and women or 
multimillionaires and billionaires. This legislation signals to middle-
class Americans that the government should be focused on helping them, 
by ensuring that everyone pays their fair share to support essential 
government programs that invest in education, infrastructure and our 
nation's future.
  The Tax Code stacks the deck for the wealthy at the expense of the 
middle-class. The middle-class has already been squeezed enough by 
stagnant wages and a complex tax system that does not work for them. 
The revenue raised through this measure is deficit reduction that is 
not taken out on the backs of seniors or working American families. 
This legislation will only impact 0.2 percent of Rhode Islanders that 
earn more than $1 million in income per year.
  Senator Whitehouse's Paying a Fair Share Act would prevent 
millionaires and billionaires from using tax loopholes that allow them 
to pay a lower effective tax rate than a school teacher in Rhode 
Island.
  Of millionaires in 2009, a full 22,000 households making more than $1 
million annually paid less than a 15 percent income tax rate. Our Tax 
Code, riddled with loopholes and special giveaways, leads to lopsided 
and inequitable results. It is past time we correct these glaring 
loopholes and restore some fairness to our Tax Code.
  The 400 highest-income households in 2008, who made on average $271 
million--paid just an 18.1 percent rate. This is nearly half the 29.9 
percent rate those households paid on average in 1995 under President 
Clinton.
  According to the Center on Budget Policy Priorities analysis, the top 
1 percent have seen their after tax income grow by 277% since 1979. The 
middle 60 percent of Americans have only seen a 38 percent increase and 
the bottom 20 percent have only seen an 18 percent increase. This is a 
result of a broken Tax Code that over the past several decades has been 
tilted to benefit the wealthiest Americans and not the middle-class.
  The tax benefits for the wealthiest Americans have contributed to 
staggering deficits. These deficits have increased pressure on our 
budget and motivated Republicans to slash services that benefit middle-
class Americans in the name of deficit reduction.
  This is exactly why I opposed the reckless Bush tax cuts that skewed 
so heavily towards the wealthy, the segment of our society that needed 
the least help. In fact, it is estimated that the House Republican 
budget would give millionaires an additional $265,000 in tax cuts each 
year; unsurprisingly, Republicans want to double down on the misguided 
Bush tax cuts that disproportionately benefited the wealthy.
  We need comprehensive tax reform, but not reform that skews the Tax 
Code even more towards the wealthy while asking for more sacrifice from 
the middle-class. The Paying a Fair Share Act is a first step in 
reversing this trend and reforming the Tax Code by restoring fairness.
  Making sure that millionaires and billionaires don't pay a lower tax 
rate than middle-class Americans will help make our Tax Code fairer 
while addressing our budget deficit. This is common sense and I hope 
Republicans will join us in taking the first step towards restoring 
fairness to our tax laws.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator from Rhode Island has 3 minutes. 
The Republicans have 4 minutes.
  Mr. WHITEHOUSE. It is my understanding there are no further speakers 
on the Republican side. If somebody comes, I will, of course, yield the 
4 minutes.
  The latest report is that there are no further speakers until we move 
on to the judicial nomination.
  I wished to use the time remaining to respond to two of the points 
that have been made. Before I do that, let me just say that as I have 
kept track during the debate, the minority party has discussed debt, 
bureaucracy, Presidential appointments, punishment of success, 
ObamaCare, jobs, fuel prices, picking winners and losers, campaign 
contributions, out-of-control spending, equal opportunity, and massive 
new tax increases.
  The subject at hand is actually much smaller than this; that is, the 
indisputable fact that at the very high end of the American income 
spectrum, people are paying lower tax rates than regular American 
families--whether it is Warren Buffett's self-proclaimed example of 
paying only 11 percent in total taxes or the average of all the 400 
highest income earners in the country being only 18.2 percent. These 
are people earning--in the case of the 400--over one-quarter of a 
billion dollars each in 1 year and paying the rate equivalent to what a 
single Rhode Island truckdriver pays. That is the issue.
  We should have a progressive Tax Code. One of the speakers said we do 
have a progressive Tax Code and that the income tax generates 31.2 
percent of the total income tax revenue from high-income folks versus 
14.2 percent from the middle as their rate. But it is worth focusing on 
the fact that when my Republican colleagues talk about taxes and they 
focus on income taxes, they leave out the payroll taxes, which 
virtually every American pays or a great number of Americans--more pay 
payroll taxes than income tax, I believe.
  If we look at all those taxes and put them together, we find that the 
top 1 percent of Americans do indeed pay 28.3 percent of the taxes. One 
percent pays 28.3 percent of the taxes. That sounds pretty progressive, 
until we realize the top 1 percent in America controls more than one-
third of the Nation's wealth; the top 1 percent holds more than one-
third of the Nation's wealth but pays only 28 percent of the taxes. 
That is not progressive, if we are measuring in what we are usually 
taxing, which is income and wealth, not just the existence of a human 
being on the planet.
  If we go to 5 percent, then the top 5 percent pays 44.7 percent of 
all our taxes, which again is a lot. It is progressive but not when we 
consider that 5 percent owns or controls more than 60 percent of the 
Nation's wealth. We are a country in which more than half the wealth of 
the country--more than 60 percent of it is concentrated in the hands of 
one-twentieth of the population, the top 5 percent. So for them to pay 
a higher rate makes a lot of logical sense. What we find is that they 
actually pay a lower rate all too often.
  The other point I wish to address is the argument that this will take 
money from the pockets of small businesses. If we look at the Office of 
Taxation and Treasury's definition of a small business and look at how 
many would be affected by this bill, it would be 3.3 percent; nearly 97 
percent of small businesses would have zero effect from this bill. Of 
the 3.3 percent that would be affected, it is hard to know how many of 
those are high-income individuals who incorporated themselves for tax 
purposes but don't fit the ordinary definition of a small business.
  When we look at the fact that Americans across the country have spent 
the last week sitting down going through their receipts, filing their 
tax returns, sitting at the kitchen table trying to make sense of it 
all and get it filed on time, for a great number of those folks, what 
they know from Warren Buffett and others is that the people making one-
quarter of a billion dollars a year are paying lower rates than they 
are, and it is not right. It is not just me saying that is not right; 
it is Ronald Reagan saying that is not right. He said it was 
``crazy''--his word--that a millionaire should pay a lower tax rate 
than a busdriver pays.
  The PRESIDING OFFICER. The Senator from Rhode Island has exhausted 
his time. The Senator from Tennessee is here to speak.

[[Page 4712]]


  Mr. WHITEHOUSE. I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee has 1 minute.
  Mr. CORKER. Mr. President, this last March, 64 Senators--32 on each 
side--wrote a letter to the President asking for real tax reform and 
real entitlement reform.
  I think most of us know today's exercise is a political exercise. It 
is not intended to deal with deficits. It is intended to divide.
  Last week, I heard the President speaking at a college in Florida 
about the Buffett tax. In that speech, he was talking about spending 
all that money on things they were interested in. In other words, this 
money is not being used, per the President's speech, in any way to 
reduce deficits.
  I encourage all those on both sides of the aisle--32 Senators on each 
side--who have spoken earnestly and sincerely about progrowth tax 
reform and entitlement reform to not follow this folly of division but 
to hold together, as we need to do something that is great for our 
country.
  It is my hope that by later this year--possibly in a lameduck, 
although I hope something happens sooner than that--all of us who truly 
care about solving problems, not about scoring political points, which 
this bill is about, will come together and do something great for our 
country.
  I yield the floor.

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