Mr. WHITEHOUSE: Mr. President, if we pass the Rebuild America Jobs Act, we will immediately invest $50 billion into our transportation infrastructure and generate hundreds of thousands of good jobs and establish a national infrastructure bank which will generate even more good jobs. We need these jobs during the current period of high unemployment, and upgrading our crumbling infrastructure will spur long-term job growth in addition to the immediate employment benefits. So I strongly support this bill and I hope our colleagues can be brought around as well.
The Rebuild America Jobs Act is one piece of the larger American Jobs Act which, when Leader Reid brought it to the floor, all 47 Senate Republicans chose to filibuster instead of allowing us to begin debating and, if they wished, improving the jobs legislation. That filibuster blocked President Obama's plan to cut payroll taxes for every single American worker, and it blocked his plan to offer business owners generous tax breaks to hire new workers and grow their businesses. Economists estimated that the American Jobs Act would create nearly 2 million jobs--1.9 million jobs. Perhaps for that reason, many pieces of the bill have received wide bipartisan support in the past. Indeed, just last December, similar job-creating provisions were included in the Job Creation and Tax Cuts Act, which received 81 votes in the Senate.
The jobs bill that Republicans blockaded was fully paid for through a 5.6-percent surtax on income in excess of $1 million. In other words, the only tax increase in the bill is a provision that pays for job creation in this country by having millionaires and billionaires who continue to enjoy the record low tax rates brought on by the Bush tax cuts pay a little more and only on their income over $1 million. There is no increase on the first million.
A recent study by Citizens for Tax Justice showed that the surcharge would only apply to the richest one-fifth of 1 percent of U.S. taxpayers, leaving the taxes of more than 99 percent of all Americans--if my math is right, 99.8 percent of all Americans--unchanged.
The Rebuild America Jobs Act, which is one piece of the full jobs bill, is paid for with a much smaller 0.7-percent surtax on income above $1 million. Having one-fifth of 1 percent of the wealthiest Americans pay less than 1 percent more in income taxes, and only on income above $1 million of income, hardly seems unreasonable to support hundreds of thousands of jobs for middle-class families in this economic climate.
As we try again and again to advance jobs legislation in the Senate, the supercommittee we established in the Budget Control Act is at work on recommendations to cut the deficit. Getting the most fortunate and well-compensated Americans to start paying a fair share in taxes ought to be a logical component of any deficit reduction plan--at least under a theory that we should have a progressive Federal tax system. That is a tax system in which we pay higher rates of tax the more money we earn.
In theory, we have a progressive Federal tax system, but, in fact, do we? We are often told that the wealthiest Americans are already shouldering too great a share of our tax burden. Earlier this year, one of the candidates, a leading candidate for the Republican Presidential nomination, told NBC that ``the top 1 percent of income earners pay about 40 percent of all taxes into the Federal Government.''
That sounds like a lot--the top 1 percent pay 40 percent of all taxes. Let's look at some data to see if the theory proves correct. The Urban Institute and the Brookings Institution, two very respected organizations, estimate that the total share of Federal taxes paid by the top 1 percent of taxpayers is, in fact, 22.7 percent--not 40 percent. Remember that for a moment, 22.7 percent is the amount of Federal taxes the top 1 percent of income earners pay.
If we take a look at the long-term trends in income and taxation, it is revealing. According to the Congressional Budget Office, between 1979 and 2006, the total effective Federal tax rate for the top 1 percent of households fell. The tax rate went down almost 6 points, from 37 percent to 31.2 percent. Over the same period, that group, the top 1 percent, went from earning 10 percent of the Nation's income to 22.8 percent. The amount of the Nation's income that the richest 1 percent earn in this country climbed over that period from 10 to nearly 23 percent. They claimed an additional 13 percent of the Nation's income.
Go back to the number. The Urban Institute and Brookings Institution estimate that the total share of Federal taxes paid by the top 1 percent of taxpayers is 22.7 percent, but the share of income the top 1 percent takes is 22.8 percent. That is not a progressive tax system. They may be paying a lot in taxes, but it is proportionate almost exactly to what they are taking out of the economy in income. The relative burden of the extremely wealthy in this country is going steadily down, not up, and it has just crossed to the point where it is no longer progressive.
There is a tale of two buildings that may help explain why. This is the first of the two buildings. This is the Helmsley Building in New York City. It is on Park Avenue. It is a lovely, wonderful place--a great building. Not surprisingly, some very successful and well-compensated people live there.
It is also a big building. It is so big it has its own ZIP Code. Because it has its own ZIP Code and because the Internal Revenue Service calculates and provides information about income by ZIP Code, we can learn quite a lot about the occupants of this wonderful building. What we know from the latest IRS information that I have been able to find is that the very well-compensated and successful individuals and corporations that call this building home actually paid a 14.7-percent tax rate in 2007. That rate is lower than the Bureau of Labor Statistics tells us is what the average New York City janitor or doorman or security guard pays. So at least in this building the fabulously successful and well-compensated occupants of the building who live in those wonderful apartments on Park Avenue are paying a significantly lower tax rate in real life than the actual men and women who are their janitors, who are their doormen, who are their security guards.
It is not just some fluke about the Helmsley Building. We all remember Leona Helmsley saying it is the little people who pay taxes. There is no ghost of Leona Helmsley making that true in this building; it is true across the board. Each year, the Internal Revenue Service publishes a report consolidating the tax returns of the highest income 400 Americans and they publish that data. They do not get around to it very quickly, but in May they published the most recent data on the top 400 taxpayers in America for 2008. In 2008, the top 400 earners took home an average of $270 million each. They earned more than one-quarter of a billion dollars each that year, which is wonderful. That is the kind of country we are. One can make a real fortune here. But where it gets a little sketchy is that, on average, those 400 extremely highly compensated Americans actually paid into the Treasury of the United States at an average Federal tax rate of just 18.2 percent on adjusted gross income--18.2 percent.
We have spent time on the Senate floor debating whether the top income tax rate should be 35 percent or 39.6 percent. That is not what they pay. The top 400 income earners, the $ 1/4 billion-a-year crowd, pay actually, on average, just 18.2 percent. This means the 400 highest earning individuals in the Nation, in 2008, just like the occupants of this Helmsley Building, were paying rates lower than or equivalent to what regular working families pay.
If we went back to the Bureau of Labor Statistics and pulled out the information for the Helmsley Building but about the janitors, the doormen and about the security guards and we look to see who else in America is paying an 18.2-percent tax rate--if a person is a single filer they are paying an 18.2-percent tax rate in this country if they make $39,350 a year. Where I come from in Rhode Island, the Bureau of Labor Statistics says that is about what a truck driver makes--$40,200 is what a truck driver makes; $39,350 is what it takes to put a person in the income bracket where they are paying the same tax rate into our Treasury as the 400 members of the $ 1/4 billion-a-year club.
The choice is very clear. Instead of moving forward on a jobs plan that independent economists agree will create millions of American jobs in the near term, we are facing an opposition that is fighting to make sure people making $ 1/4 billion a year pay lower Federal tax rates than regular working, middle-class American families.
That is the story of the first building, the Helmsley Plaza. This is a different building. This is the Ugland building. It is called Ugland House. It doesn't look like much, but it is near the lovely aquamarine beaches of the Cayman Islands. What is interesting about this little building is that 18,000 corporations claim they are doing business here. That is not a very big building. The notion that 18,000 corporations are doing business out of this building--that gives a whole new meaning to the phrase ``small business.'' But there is no real business going on here. The business that is going on here is funny business, under the Tax Code.
The companies doing business here are not real companies; they are phony-baloney shell corporations that are designed to hide assets and to play games with the tax system. This income never even makes it into the 18.2 percent of the Helmsley Building. This gets hidden away completely.
When our tax system is rigged so it permits billionaires to pay lower tax rates than truck drivers and allows the wealthiest to avoid taxes by hiding assets in phony offshore corporations, something is not right. With multitrillion dollar budget deficits threatening our Nation's prosperity, we have to do something to make our tax system more fair for regular Americans.
I have been working on legislation which would ensure that millionaires and billionaires pay an effective tax rate at least as high as is paid by middle-class families. This would require all taxpayers with income over $1 million a year, indexed to inflation, to pay at least a 25-percent rate. A 25-percent rate is the marginal rate middle-class taxpayers currently pay on income, from about $34,000 of income to about $84,000 of income, depending on the size of the family and the deductions they get.
It seems fair to me to ask people at the highest end of the income spectrum to pay at least the tax rate middle-class families in the $34,000-to-$84,000 range actually pay. It simply doesn't make sense to have the wealthiest abusing these tax gimmicks to pay lower tax rates than middle-class families. So whether it is Leader Reid's surtax or my proposal, I hope we can act to ensure that the most successful Americans actually pay their fair share of our national tax burden to restore our Nation to its economic strength.
I thank my distinguished colleague from Michigan for her courtesy.
I yield the floor.