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President Addresses Tax Relief Coalition

The United States Chamber of Commerce

Washington, D.C.

President's Remarks

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10:31 A.M. EDT THE PRESIDENT: Thank you all. Good to see you. Thanks forcoming. Thank you all. Thanks for coming. I heard you were in theneighborhood -- (laughter) -- so I decided to drop by and sayhello. Thanks for your interest in your country. Thanks for yourconcern about the future. Thanks for worrying about somebody who iswondering whether he or she are going to be able to put food on thetable, to find work. And that's what we're here to talk about. The Tax Relief Coalition is a broad group, united by the commitmentto the spirit of risk-taking. You understand the free enterprise makesthis economy go. You understand the role of government is not tocreate wealth, but an environment in which the entrepreneur canflourish. (Applause.) You understand that our duty here in Washingtonis to set pro-growth policies in place that reward and respectAmericans who work hard and take risks. That's what you understand.(Applause.) I appreciate your understanding, and I'm glad you're here becauseyou're here at just the right time. (Laughter.) You see, Congress isnow considering what to do. Congress is debating the package. They'retrying to figure out what course to take. And I'm glad you're bringingyour voices to the halls of Congress, and can be a loud voice, as boththe Secretary and I understand, and that's going to be important in thehalls of Congress. (Laughter.) Last Friday, we received some troubling economic news. Theunemployment rate is now at 6 percent. The news ought to serve as aclear signal to members of the United States Congress that we need abold economic recovery plan. (Applause.) Congress will hear from me.Congress will hear from the Secretary. Congress needs to hear fromyou. We need tax relief that creates the greatest number of jobs.(Applause.) The goal is to create a million new jobs by the end ofnext year. I've submitted a good, strong plan that will help meet thatgoal. The United States Congress must not only listen to your voice,but must listen to the voice of somebody looking for work. We needaggressive action out of the United States Congress now. (Applause.) I want to thank our Secretary of Treasury, John Snow. He'sexperienced; he's capable; he's able. He just as -- he could easilyhave looked me in the eye and said, no, I don't want to serve mycountry. 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 ourcountry is better off because John Snow said yes. Mr. Secretary, thankyou. (Applause.) I want to thank my friend Dirk Van Dongen, who's been a tirelessadvocate for policies that help people looking for work. He's thePresident of the Tax Relief Coalition. I want to thank all the membersof the Tax Relief Coalition who are here, who have joined us, whorealize that democracy can work if you work at it. And I appreciateyou coming. (Applause.) I want to thank Tom Donohue, who is the President and CEO of theChamber, for lending this fantastic hall and this beautiful buildingfor -- lending us this for the purposes of making a statement to thecountry about our mutual desire to help people find a job. I want to thank all the entrepreneurs who are with us today, therisk-takers, the -- really, truly the engine of growth for theAmerican 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 newsis, Jammin' Java is succeeding. I had a chance to visit with thembefore we came in, as I did with the Rickards, as well, who have gottheir own business. I'm going to say something about them a littlelater on. The reason I point them out is there are people in this audiencewho own their own business, who are part of the ownership society inAmerica, who are creating new jobs. So, for all the entrepreneurs whoare here with us and all across America, thank you -- thank you forworking hard to realize your dreams. (Applause.) America is a strong and confident nation. And those qualities areseeing us through some challenging times. For nearly 20 months we havewaged a relentless campaign against global terror. For 20 months, wehave done what the American people expect, and that is to hunt down thekillers, one at time, so that America is more secure. We are winningthe war on terror. (Applause.) And as a part of the war against terror, we removed Saddam Husseinfrom power in Iraq. (Applause.) Thanks to the skill and courage ofour military and other coalition forces, America is more secure, theworld 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 continueto promote the peace. We will continue to promote freedom, because weknow a free society is one that is more likely to be a peacefulsociety. We assume those responsibilities. We'll follow through onour responsibilities. And here at home, we have responsibilities. As we press forward onnational security, we must promote job security here in America.(Applause.) Our goal is a vibrant and growing economy. That's ourgoal -- in which the entrepreneur can find new opportunities, inwhich every person who wants to work can find a job. That's the statedgoal of this administration. It's I know a goal that you share, aswell. The American economy has faced one challenge after another over thepast several years. The stock markets peaked in early 2000. Theeconomy began to slow in the summer of that year. In early 2001, oureconomy was in recession. And then we got attacked by the terrorists,and that affected our capacity to grow. And we've endured theuncertainty of war. We've seen failures in corporate responsibilityacross America. Unfortunately, some of our citizens forgot what itmeans to be a responsible citizen of this country. They didn't tellthe truth. (Applause.) They didn't tell the truth to their employeesand their shareholders. They self-enriched at the expense of smallinvestors and public interests. In every case, we've taken action toconfront 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 wantyou to know that in spite of all the hurdles and the challenges wefaced, we're still growing faster than nearly all the industrializedcountries. (Applause.) And interest rate -- low interest rates helpbecause it helps Americans buy a home, or refinance, or remodel ahome. 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 Ijust cited -- one, the entrepreneurial spirit is strong.(Applause.) And secondly, we've got the best workers in the world inAmerica. (Applause.) Last year, productivity growth in America wasabout 4.8 percent. That's the best annual increase since 1950. When you're talking about productivity increases, you're reallytalking about technology, and more importantly, the human capacity ofthe work force. Our workers are great. The best in the world. Buteven with the strengths I just outlined, it's important for members ofCongress to hear from you that we've got more work to do, that's thereunmet potential in this economy. It's not growing fast enough. Inspite of the strengths, there's still people looking for work, andwe've got to do more. And that's the message I want you to take to thehalls 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 theCongress. That was four months ago. And we've seen some progresssince then, and that's good news. First of all, both parties, in bothHouses of Congress, now recognize that tax relief helps create jobs.(Applause.) That's important, that both Houses understand that when somebodykeeps more money, they're likely to demand a good or a service, whenthey have more of their own money to spend. By the way, when you're upthere, remind them something that you and I know is true; the money wetalk about in Washington D.C. is not the government's money, it is thepeople's money. (Applause.) And so the debate is not if there is going to be tax relief, thedebate now is how much tax relief. And when they ask you, how much doyou think, citizen, what you ought to say is, enough to make sure thatwe create a million new jobs by the end of 2004. That's the definitionof the right amount. (Applause.) The definition of the right amount is not some theory, is basedupon theory, it's based upon the practical application of tax cuts, andit ought to be based in human terms. The right answer for how big thetax cut ought to be is a million jobs. That's the right answer. Andthat's the package I submitted to the United States Congress.(Applause.) The good news is many in this room have already been through thetax relief exercise in recent history. Many of you in this room wereinvolved in the spring of 2001 to convince Congress to pass taxrelief. And it's a good thing you were involved, and it's a good thingthey did, because the tax relief helped make the 2001 recession one ofthe shortest and shallowest in America history. (Applause.) The issue we now face results from the fact that Congress phased intax relief over 10 years. In other words, they passed tax relief, butit was going to be incremental. My proposal would get the tax reliefinto effect this year. (Applause.) Our motto is this: If tax reliefis good for Americans years from now, it is even better when theAmerican economy needs it today. (Applause.) Instead of lowering all tax rates little by little, the Congressneeds to do it all at once, and needs to do it now. (Applause.)Instead of gradually reducing the marriage penalty, we should do itnow. (Applause.) Instead of slowly raising the child credit from $600to $1,000, we ought to do it now. And we should send the extra $400per 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 fourmaking $40,000 a year. It means their taxes would go from $1,178 ayear to $45 a year. (Applause.) That's what that means. That soundsfair to me. (Applause.) And it will sound really fair to the familymaking $40,000 a year. You see, that's $1,000 not just one year, butfor every year. It's $1,000 of that family's own money coming backinto their personal treasury, so they get to decide what to do with themoney. They get to decide whether to save for a college tuition. Theyget to decide whether to prepare for retirement. They get to decidehow to make their family stronger with their own money. (Applause.) It's also important for your message to understand -- it'simportant for your message to understand that this tax relief will help23 million small businesses create new jobs. Any good tax relief planmust understand the role of the small business in American economy.(Applause.) This plan says loud and clear to the Congress, we understand therole of the entrepreneur; we understand most new jobs are created bysmall 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 alimited partnership, or a Subchapter S corporation. All three of thoseentities pay tax at the individual tax rates. So when we reduceindividual tax rates, we help the bottom line of every mom-and-popbusiness in America. (Applause.) When we accelerate the tax ratereduction, it really means we're putting capital into the treasuries ofthe small businesses all across America. More capital means moreinvestment. More investment means more jobs. If Congress isinterested in job creation, if you want to join us in creating amillion new jobs, cut the tax rates on the small businesses all acrossthe country. (Applause.) Our tax code should also support small business owners who want toinvest in the future. So today, a small business can deduct $25,000for investment in new equipment. The proposal that you're advocatingthere in the halls of Congress, the proposal I have submitted, saysthat 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 entrepreneurialspirit in America. They started their business right after Septemberthe 11th, 2001. Those are confident people. (Laughter.) Those arepeople that said, we're not going to allow a terrorist attack todiminish our dreams to have our own business. I appreciate not onlythe courage, but I appreciate this -- that they have gone from fiveemployees to 25 employees. (Applause.) Here's what Luke says. Luke says, "Buying equipment is somethingwe need to do in order to grow the business, in order to stay up withcompetition. Any break we get obviously encourages us to hire morepeople and buy equipment." In other words, tax relief will be used bythe Brindleys to buy new equipment. And when they buy new equipment,it means their work force becomes more productive. It means they cancompete better in the marketplace. It also means that somebody has gotto make that equipment. And when somebody makes the equipment,somebody is finding work. In other words, good tax policy ripplesthroughout our economy. (Applause.) And Randy and Harriet Rickard are with us. I cite these examplesbecause Congress must understand that behind the numbers is just peoplethat are taking risks for the sake of creating jobs. The Rickards arehere; they started their own business three years ago. It's a homeremodeling business. Randy runs a tight ship. He's got -- he's gotfour employees, and he's one of them. He comprises 25 percent of hiswork force. (Laughter.) But that's the nature of most smallbusinesses. 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 everyyear. That's enough to help pay health insurance for employees, orit's enough to add a new truck, to make sure his business iscompetitive. He says, anything is helpful. "If the economy does well,I do well." Well, Randy, this plan is all aimed at making sure theeconomy does well, so you can do well. And when you do well, somebodyis going to work. That's the whole basis of the plan. (Applause.) The jobs and growth plan would encourage investment by ending thedouble-taxation on dividends. (Applause.) Taxing profits at thecorporate level is fair. That's fair. Somebody makes a profit, thatprofit ought to be taxed. However, when the profits get distributed tothe shareholders, and it gets taxed again, that's unfair. It'scounterproductive. (Applause.) Ending the practice makes the tax codefair. It makes it fair especially for our seniors, who receive morethan half of all taxable dividend income. Economists say that this move will boost the stock market. That'swhat the economists say. Not all, but a lot of the smart ones saythat. (Laughter and applause.) In other words, there's a wealtheffect that will take place. An increasing stock market means a lotfor many of our fellow citizens, because we are becoming an ownershipsociety. Many people own stocks directly. Many people own stocksthrough their pension plans. Many people will be directly affected byan increasing stock market. And so getting rid of the double-taxationof dividends will help an ownership society realize more wealth.Getting rid of the double -taxation of dividends will be good corporatereform. We went through a period where people said, invest in my companybecause 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 -- thenew economics sometimes overlooked old accounting. And that is, whenyou 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 agood story, and oh, by the way, is I'm going to distribute on a regularbasis cash out of my treasury in the form of a dividend. (Applause.) Getting rid of the double-taxation of dividends will be goodcorporate reform. It will make our balance sheets more reliable. Itwill be better for small investors. It will also help create newjobs. We estimate that 400,000 new jobs will be created when we getrid of the double-taxation of dividends. So when you hear people saythe proposal only helps a certain investor class, they're not tellingthe whole story. Ending the double-taxation of dividends will help400,000 people find work by the end of next year. (Applause.) The House of Representatives is considering a proposal that wouldinclude all the elements of the growth plan which I just described toyou. It would also significantly reduce the double-taxation ondividends. It's a positive step. And they're making progress. I'mgoing to continue to work both with the House and the Senate, with thegoal of making sure as many people can find work as possible. But themore the members of Congress here from you, the more likely it is thatthis plan is going to pass. What you need to do is tell them what tax relief will do for ourcountry; if you own your company, how much it will help your companygrow; 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 adeficit because we went through a recession. You see, a recessionmeans you get less money coming into your treasury. When the economygoes down, there's less tax revenues coming to the Treasury. Secondly, we've got a deficit because we're at war. And one thingis for certain about this Commander-in-Chief, we will spend whatever isnecessary to win the war. (Applause.) We owe it to every soldier inthe American military to make sure they've got the best pay, bestequipment, best possible training. We owe it to the families of themilitary to make sure that they're as well protected as possible. Soour expenditures went up because of the emergency in war, and revenueswent 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 -- Isubmitted a budget to the United States Congress which holds thediscretionary spending to 4 percent. That's a reasonable level. We,of course, will work with Congress to make sure they stick to thatbudget -- control spending on the one hand, and on the other hand, inorder to get rid of the deficit, you boost revenues coming into theTreasury by encouraging economic growth and vitality. (Applause.) I'm concerned about the deficit, but not as concerned about thedeficit as I am about people trying to find work. I'm more worriedabout the person looking for work. And, therefore, we've got a planthat is robust and strong, that encourages economic vitality andgrowth, 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 peoplepresent in this room can make a difference, but people who arelistening across the country can make a difference. That's why they'vegot emails -- (laughter) -- or telephones, or in some cases,buses. (Applause.) People on the Hill are responsive to the voice oftheir 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 theworld, a process in which the citizen can make a difference. Part ofthe process that says democracy is by far the fairest way for people tolive. And that's what we believe. We believe strongly in certain principles. We believe in thedignity of every single human being. (Applause.) That's why we wantto make sure -- that's why we care when we hear somebody can't find awork. That's why we grieve when a fellow citizen who wants to workcan't find a job, and that's why we've put policies out there thatpromote growth and economic vitality. But we not only believe in thedignity of every American, we believe in the dignity of every person.See, we believe that freedom is the Almighty God's gift to each andevery person on this -- who lives on this globe. That's what webelieve. (Applause.) You're representing the best of a free society. The willingnessto speak out really does speak to the great freedoms of America. Andwe hold those freedoms dear. We believe in freedom not only for ourown people, but we believe in freedom for those who are enslaved. Webelieve so strongly in freedom that we're willing sometimes to takerisk for not only our own freedoms, but the freedoms of others. That'sthe great thing about our country. We're a strong country; we're aconfident country; but we're also a compassionate country that believesin 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.) END 11:04 A.M. EDT Printer-Friendly Version Email this page to a friend IssuesBudget ManagementEducationEnergyHealth CareHomeland SecurityHurricane RecoveryImmigrationJobs & EconomyMedicareNational SecurityPandemic FluPatriot ActRenewal in IraqSocial SecurityMore Issues