President Calls for Tax Relief
Remarks by the President to the Tax Relief Coalition
The United States Chamber of Commerce
Washington, D.C.
10:31 A.M. EDT
THE PRESIDENT: Thank you all. Good to see you. Thanks for
coming. Thank you all. Thanks for coming. I heard you were in the
neighborhood -- (laughter) -- so I decided to drop by and say
hello. Thanks for your interest in your country. Thanks for your
concern about the future. Thanks for worrying about somebody who is
wondering whether he or she are going to be able to put food on the
table, to find work. And that's what we're here to talk about.
The Tax Relief Coalition is a broad group, united by the commitment
to the spirit of risk-taking. You understand the free enterprise makes
this economy go. You understand the role of government is not to
create wealth, but an environment in which the entrepreneur can
flourish. (Applause.) You understand that our duty here in Washington
is to set pro-growth policies in place that reward and respect
Americans who work hard and take risks. That's what you understand.
(Applause.)
I appreciate your understanding, and I'm glad you're here because
you're here at just the right time. (Laughter.) You see, Congress is
now considering what to do. Congress is debating the package. They're
trying to figure out what course to take. And I'm glad you're bringing
your voices to the halls of Congress, and can be a loud voice, as both
the Secretary and I understand, and that's going to be important in the
halls of Congress. (Laughter.)
Last Friday, we received some troubling economic news. The
unemployment rate is now at 6 percent. The news ought to serve as a
clear signal to members of the United States Congress that we need a
bold economic recovery plan. (Applause.) Congress will hear from me.
Congress will hear from the Secretary. Congress needs to hear from
you. We need tax relief that creates the greatest number of jobs.
(Applause.) The goal is to create a million new jobs by the end of
next year. I've submitted a good, strong plan that will help meet that
goal. The United States Congress must not only listen to your voice,
but must listen to the voice of somebody looking for work. We need
aggressive action out of the United States Congress now. (Applause.)
I want to thank our Secretary of Treasury, John Snow. He's
experienced; he's capable; he's able. He just as -- he could easily
have looked me in the eye and said, no, I don't want to serve my
country. I think I'm kind of happy where I am in the private sector.
But, no, he said, Mr. President, I want to serve the country. And our
country is better off because John Snow said yes. Mr. Secretary, thank
you. (Applause.)
I want to thank my friend Dirk Van Dongen, who's been a tireless
advocate for policies that help people looking for work. He's the
President of the Tax Relief Coalition. I want to thank all the members
of the Tax Relief Coalition who are here, who have joined us, who
realize that democracy can work if you work at it. And I appreciate
you coming. (Applause.)
I want to thank Tom Donohue, who is the President and CEO of the
Chamber, for lending this fantastic hall and this beautiful building
for -- lending us this for the purposes of making a statement to the
country about our mutual desire to help people find a job.
I want to thank all the entrepreneurs who are with us today, the
risk-takers, the -- really, truly the engine of growth for the
American economy. We've got the Brindley boys here from Vienna,
Virginia. I'm going to say something about them a little later on.
They started what they call Jammin' Java. (Laughter.) The good news
is, Jammin' Java is succeeding. I had a chance to visit with them
before we came in, as I did with the Rickards, as well, who have got
their own business. I'm going to say something about them a little
later on.
The reason I point them out is there are people in this audience
who own their own business, who are part of the ownership society in
America, who are creating new jobs. So, for all the entrepreneurs who
are here with us and all across America, thank you -- thank you for
working hard to realize your dreams. (Applause.)
America is a strong and confident nation. And those qualities are
seeing us through some challenging times. For nearly 20 months we have
waged a relentless campaign against global terror. For 20 months, we
have done what the American people expect, and that is to hunt down the
killers, one at time, so that America is more secure. We are winning
the war on terror. (Applause.)
And as a part of the war against terror, we removed Saddam Hussein
from power in Iraq. (Applause.) Thanks to the skill and courage of
our military and other coalition forces, America is more secure, the
world is more peaceful, and the Iraqi people are now free. (Applause.)
We will continue to meet our responsibilities to secure America.
We will continue to dismantle the al Qaeda network. We will continue
to promote the peace. We will continue to promote freedom, because we
know a free society is one that is more likely to be a peaceful
society. We assume those responsibilities. We'll follow through on
our responsibilities.
And here at home, we have responsibilities. As we press forward on
national security, we must promote job security here in America.
(Applause.) Our goal is a vibrant and growing economy. That's our
goal -- in which the entrepreneur can find new opportunities, in
which every person who wants to work can find a job. That's the stated
goal of this administration. It's I know a goal that you share, as
well.
The American economy has faced one challenge after another over the
past several years. The stock markets peaked in early 2000. The
economy began to slow in the summer of that year. In early 2001, our
economy was in recession. And then we got attacked by the terrorists,
and that affected our capacity to grow. And we've endured the
uncertainty of war. We've seen failures in corporate responsibility
across America. Unfortunately, some of our citizens forgot what it
means to be a responsible citizen of this country. They didn't tell
the truth. (Applause.) They didn't tell the truth to their employees
and their shareholders. They self-enriched at the expense of small
investors and public interests. In every case, we've taken action to
confront these challenges.
Our economy is growing. We've got many strengths in our economy.
First, the economy is growing because interest rates are low. I want
you to know that in spite of all the hurdles and the challenges we
faced, we're still growing faster than nearly all the industrialized
countries. (Applause.) And interest rate -- low interest rates help
because it helps Americans buy a home, or refinance, or remodel a
home. And that helps. That helps create employment opportunity.
Inflation is low, and that helps. Energy prices are now falling.
That's like tax relief on a daily basis when you go to the pumps.
(Applause.)
We've got two great strengths even better than the statistics I
just cited -- one, the entrepreneurial spirit is strong.
(Applause.) And secondly, we've got the best workers in the world in
America. (Applause.) Last year, productivity growth in America was
about 4.8 percent. That's the best annual increase since 1950.
When you're talking about productivity increases, you're really
talking about technology, and more importantly, the human capacity of
the work force. Our workers are great. The best in the world. But
even with the strengths I just outlined, it's important for members of
Congress to hear from you that we've got more work to do, that's there
unmet potential in this economy. It's not growing fast enough. In
spite of the strengths, there's still people looking for work, and
we've got to do more. And that's the message I want you to take to the
halls of the United States Congress. (Applause.)
This isn't the first time I've been talking about this subject.
(Laughter.) Four months ago I sent a jobs and growth package to the
Congress. That was four months ago. And we've seen some progress
since then, and that's good news. First of all, both parties, in both
Houses of Congress, now recognize that tax relief helps create jobs.
(Applause.)
That's important, that both Houses understand that when somebody
keeps more money, they're likely to demand a good or a service, when
they have more of their own money to spend. By the way, when you're up
there, remind them something that you and I know is true; the money we
talk about in Washington D.C. is not the government's money, it is the
people's money. (Applause.)
And so the debate is not if there is going to be tax relief, the
debate now is how much tax relief. And when they ask you, how much do
you think, citizen, what you ought to say is, enough to make sure that
we create a million new jobs by the end of 2004. That's the definition
of the right amount. (Applause.)
The definition of the right amount is not some theory, is based
upon theory, it's based upon the practical application of tax cuts, and
it ought to be based in human terms. The right answer for how big the
tax cut ought to be is a million jobs. That's the right answer. And
that's the package I submitted to the United States Congress.
(Applause.)
The good news is many in this room have already been through the
tax relief exercise in recent history. Many of you in this room were
involved in the spring of 2001 to convince Congress to pass tax
relief. And it's a good thing you were involved, and it's a good thing
they did, because the tax relief helped make the 2001 recession one of
the shortest and shallowest in America history. (Applause.)
The issue we now face results from the fact that Congress phased in
tax relief over 10 years. In other words, they passed tax relief, but
it was going to be incremental. My proposal would get the tax relief
into effect this year. (Applause.) Our motto is this: If tax relief
is good for Americans years from now, it is even better when the
American economy needs it today. (Applause.)
Instead of lowering all tax rates little by little, the Congress
needs to do it all at once, and needs to do it now. (Applause.)
Instead of gradually reducing the marriage penalty, we should do it
now. (Applause.) Instead of slowly raising the child credit from $600
to $1,000, we ought to do it now. And we should send the extra $400
per child to American families this year. (Applause.)
You'll hear all kinds of rhetoric about how this plan is not fair.
Well, let me just describe to you what it means to the family of four
making $40,000 a year. It means their taxes would go from $1,178 a
year to $45 a year. (Applause.) That's what that means. That sounds
fair to me. (Applause.) And it will sound really fair to the family
making $40,000 a year. You see, that's $1,000 not just one year, but
for every year. It's $1,000 of that family's own money coming back
into their personal treasury, so they get to decide what to do with the
money. They get to decide whether to save for a college tuition. They
get to decide whether to prepare for retirement. They get to decide
how to make their family stronger with their own money. (Applause.)
It's also important for your message to understand -- it's
important for your message to understand that this tax relief will help
23 million small businesses create new jobs. Any good tax relief plan
must understand the role of the small business in American economy.
(Applause.)
This plan says loud and clear to the Congress, we understand the
role of the entrepreneur; we understand most new jobs are created by
small business owners. And this plan directly affects small business,
because most small businesses pay taxes at the individual tax rates.
You know why? Because they're either a sole proprietorship, or a
limited partnership, or a Subchapter S corporation. All three of those
entities pay tax at the individual tax rates. So when we reduce
individual tax rates, we help the bottom line of every mom-and-pop
business in America. (Applause.) When we accelerate the tax rate
reduction, it really means we're putting capital into the treasuries of
the small businesses all across America. More capital means more
investment. More investment means more jobs. If Congress is
interested in job creation, if you want to join us in creating a
million new jobs, cut the tax rates on the small businesses all across
the country. (Applause.)
Our tax code should also support small business owners who want to
invest in the future. So today, a small business can deduct $25,000
for investment in new equipment. The proposal that you're advocating
there in the halls of Congress, the proposal I have submitted, says
that we would triple the amount of expensing new equipment, from
$25,000 to $75,000 per year, and index that to inflation. (Applause.)
I mentioned the Brindley boys were with us today, from Vienna.
They -- let me talk about -- they help define the entrepreneurial
spirit in America. They started their business right after September
the 11th, 2001. Those are confident people. (Laughter.) Those are
people that said, we're not going to allow a terrorist attack to
diminish our dreams to have our own business. I appreciate not only
the courage, but I appreciate this -- that they have gone from five
employees to 25 employees. (Applause.)
Here's what Luke says. Luke says, "Buying equipment is something
we need to do in order to grow the business, in order to stay up with
competition. Any break we get obviously encourages us to hire more
people and buy equipment." In other words, tax relief will be used by
the Brindleys to buy new equipment. And when they buy new equipment,
it means their work force becomes more productive. It means they can
compete better in the marketplace. It also means that somebody has got
to make that equipment. And when somebody makes the equipment,
somebody is finding work. In other words, good tax policy ripples
throughout our economy. (Applause.)
And Randy and Harriet Rickard are with us. I cite these examples
because Congress must understand that behind the numbers is just people
that are taking risks for the sake of creating jobs. The Rickards are
here; they started their own business three years ago. It's a home
remodeling business. Randy runs a tight ship. He's got -- he's got
four employees, and he's one of them. He comprises 25 percent of his
work force. (Laughter.) But that's the nature of most small
businesses. People who are working hard, people who are expanding,
people who are providing a good or a service.
This proposal that we've proposed will save him nearly $2,400 every
year. That's enough to help pay health insurance for employees, or
it's enough to add a new truck, to make sure his business is
competitive. He says, anything is helpful. "If the economy does well,
I do well." Well, Randy, this plan is all aimed at making sure the
economy does well, so you can do well. And when you do well, somebody
is going to work. That's the whole basis of the plan. (Applause.)
The jobs and growth plan would encourage investment by ending the
double-taxation on dividends. (Applause.) Taxing profits at the
corporate level is fair. That's fair. Somebody makes a profit, that
profit ought to be taxed. However, when the profits get distributed to
the shareholders, and it gets taxed again, that's unfair. It's
counterproductive. (Applause.) Ending the practice makes the tax code
fair. It makes it fair especially for our seniors, who receive more
than half of all taxable dividend income.
Economists say that this move will boost the stock market. That's
what the economists say. Not all, but a lot of the smart ones say
that. (Laughter and applause.) In other words, there's a wealth
effect that will take place. An increasing stock market means a lot
for many of our fellow citizens, because we are becoming an ownership
society. Many people own stocks directly. Many people own stocks
through their pension plans. Many people will be directly affected by
an increasing stock market. And so getting rid of the double-taxation
of dividends will help an ownership society realize more wealth.
Getting rid of the double -taxation of dividends will be good corporate
reform.
We went through a period where people said, invest in my company
because I happen to have a good story; I may not have any cash flow,
but I've got a good tale to tell. (Laughter.) The problem -- the
new economics sometimes overlooked old accounting. And that is, when
you run out of cash, it doesn't matter what the story is like.
(Laughter.) A dividend-paying society is one that says, I've got a
good story, and oh, by the way, is I'm going to distribute on a regular
basis cash out of my treasury in the form of a dividend. (Applause.)
Getting rid of the double-taxation of dividends will be good
corporate reform. It will make our balance sheets more reliable. It
will be better for small investors. It will also help create new
jobs. We estimate that 400,000 new jobs will be created when we get
rid of the double-taxation of dividends. So when you hear people say
the proposal only helps a certain investor class, they're not telling
the whole story. Ending the double-taxation of dividends will help
400,000 people find work by the end of next year. (Applause.)
The House of Representatives is considering a proposal that would
include all the elements of the growth plan which I just described to
you. It would also significantly reduce the double-taxation on
dividends. It's a positive step. And they're making progress. I'm
going to continue to work both with the House and the Senate, with the
goal of making sure as many people can find work as possible. But the
more the members of Congress here from you, the more likely it is that
this plan is going to pass.
What you need to do is tell them what tax relief will do for our
country; if you own your company, how much it will help your company
grow; how many jobs that you'll be able to create with tax relief.
That's what you need to tell them.
You'll also hear talk about the deficit. And, yes, we've got a
deficit because we went through a recession. You see, a recession
means you get less money coming into your treasury. When the economy
goes down, there's less tax revenues coming to the Treasury.
Secondly, we've got a deficit because we're at war. And one thing
is for certain about this Commander-in-Chief, we will spend whatever is
necessary to win the war. (Applause.) We owe it to every soldier in
the American military to make sure they've got the best pay, best
equipment, best possible training. We owe it to the families of the
military to make sure that they're as well protected as possible. So
our expenditures went up because of the emergency in war, and revenues
went down. That's the ingredients for what they call a deficit.
And there's two ways to deal with that deficit, in my judgment.
One is to hold the line on spending. I submitted a bill to the -- I
submitted a budget to the United States Congress which holds the
discretionary spending to 4 percent. That's a reasonable level. We,
of course, will work with Congress to make sure they stick to that
budget -- control spending on the one hand, and on the other hand, in
order to get rid of the deficit, you boost revenues coming into the
Treasury by encouraging economic growth and vitality. (Applause.)
I'm concerned about the deficit, but not as concerned about the
deficit as I am about people trying to find work. I'm more worried
about the person looking for work. And, therefore, we've got a plan
that is robust and strong, that encourages economic vitality and
growth, so our fellow citizen can get to work and get to work soon.
(Applause.)
You all can make a difference in this debate. Not only the people
present in this room can make a difference, but people who are
listening across the country can make a difference. That's why they've
got emails -- (laughter) -- or telephones, or in some cases,
buses. (Applause.) People on the Hill are responsive to the voice of
their fellow citizens.
So thanks for coming, to be a part of a process that distinguishes
-- that really distinguishes us in many ways from many parts of the
world, a process in which the citizen can make a difference. Part of
the process that says democracy is by far the fairest way for people to
live. And that's what we believe.
We believe strongly in certain principles. We believe in the
dignity of every single human being. (Applause.) That's why we want
to make sure -- that's why we care when we hear somebody can't find a
work. That's why we grieve when a fellow citizen who wants to work
can't find a job, and that's why we've put policies out there that
promote growth and economic vitality. But we not only believe in the
dignity of every American, we believe in the dignity of every person.
See, we believe that freedom is the Almighty God's gift to each and
every person on this -- who lives on this globe. That's what we
believe. (Applause.)
You're representing the best of a free society. The willingness
to speak out really does speak to the great freedoms of America. And
we hold those freedoms dear. We believe in freedom not only for our
own people, but we believe in freedom for those who are enslaved. We
believe so strongly in freedom that we're willing sometimes to take
risk for not only our own freedoms, but the freedoms of others. That's
the great thing about our country. We're a strong country; we're a
confident country; but we're also a compassionate country that believes
in values and principles that will endure the test of time.
Thank you for coming to Washington to exercise your freedom.
(Applause.) May God bless you all, and may God bless America.
(Applause.)