[Public Papers of the Presidents of the United States: GEORGE W. BUSH (2001, Book I)]
[February 5, 2001]
[Pages 52-53]
[From the U.S. Government Publishing Office www.gpo.gov]
[[Page 52]]
Remarks Announcing the Tax Relief Plan and an Exchange With Reporters
February 5, 2001
The President. Good morning. I want to thank the families for being
my guests here at the White House. I'm honored to host the Peterson
family, the Claytor family, and the Gordon family, to talk about the
economic challenges they face. Their circumstances are different, but I
strongly believe they deserve to keep more of their own money, and so
does every family in America, deserve to keep their own money.
And we're talking to these families here--I think they like the
idea. Despite the prosperity of the past two decades, many American
families feel squeezed. They sometimes carry a lot of consumer debt. In
1998 the average family credit card debt was more than $4,000. At the
same time, every American family is facing higher energy costs.
Under the plan I'll be sending to Congress later this week, every
American who pays income taxes will get tax relief. And the average
relief for a family of four with two children will be $1,600. This is
real and practical help, when at this time many Americans need it.
Sixteen hundred dollars will pay the average mortgage for a month.
Sixteen hundred dollars will pay for a year's tuition at a community
college. Sixteen hundred dollars will pay the average gasoline costs for
two cars for a year. And $1,600 will buy the average California family
24 months' worth of electric power.
My plan addresses the struggles of American families and respects
their judgment. It doesn't tell families how to spend their money. It
doesn't single out some Americans for relief, while leaving others out.
It's tax relief for everybody who pays taxes. That's what the times and
basic fairness demand.
Here's how it will work. Under the existing law, Americans are
grouped in five income tax brackets: 15 percent, 28 percent, 31 percent,
36 percent, and nearly 40 percent. My plan would reduce that to four
lower brackets: 10 percent, 15 percent, 25 percent, and 33 percent. In
other words, we'd begin the simplification of the code.
Each of the families with me today would benefit from these lower
taxes. Most families will get a $1,000-per-child tax credit. Everybody
who pays income taxes will get some relief, but the biggest percentage
cuts will go to the families who need it most. The Peterson family, for
example, will get a 100 percent cut in their income taxes, saving almost
$1,100 a year. Paul and Debbie and their two beautiful girls would appreciate that.
All of the income tax rates should be cut. Most families over a
lifetime will move through a couple of different tax brackets. Many
families will move through all four as they move up the ladder of
economic success and then back down as they retire and leave the
workforce. Our Tax Code should not punish success at any stage of life.
With the top Federal income tax rate at almost 40 percent and with State
income taxes on top of that, people can sometimes feel like the junior
partner in their own lives. That's why we set the top rate at 33
percent. I believe it's an important principle that no American should
pay more than a third of his or her income to the Federal Government in
Federal taxes.
And Government shouldn't block the way into the middle class for
hard-working people who are trying to get there. The single mother
earning $25,000 a year manages to earn $1,000 by getting a promotion;
the Federal Government takes about half of it away from her. That's a
higher marginal tax rate than a lawyer earning $250,000. That's not
right, and that's wrong. And my plan addresses this inequity.
This is my approach: tax relief for everybody, in every bracket,
averaging $1,600
[[Page 53]]
per family, while still reducing our national debt and funding important
priorities.
I'm asking all Americans to examine this plan, and I'm asking for
your support. The Constitution charges the Congress with the
responsibility to write our tax laws, and I respect that responsibility.
But it is my obligation to lead, and that's what I'm going to do. My
plan is good for the long-term health of our economy. It is good for the
businesses that create jobs. It is good for America and for the American
families that make our country so unique and strong.
Thank you for coming.
Q. Mr. President, do you think the tax cut should be retroactive to
the first of the year?
The President. A lot of Members of Congress have talked to me about
that. And I do. And we look forward to working with Congress to expedite
money into the pockets of the American people. I strongly believe that a
tax relief plan is an important part of helping our country's economy
recover. And I think expediting money into people's pockets is going to
be a key ingredient. I look forward to working with Congress, Members of
both parties, to accommodate the budgetary needs and, at the same time,
help get money into people's pockets quicker.
Q. Mr. President, Democrats in Congress think that this plan, as
it's structured now, is weighted too heavily to the higher income
brackets. Are you willing to work with them to perhaps change the ratios
a little bit, if that's what it takes to get their support?
The President. I believe the plan, strongly believe the plan that I
have submitted is structured the right way. I've heard all the talk
about class warfare and this only benefiting the rich. I think when
people take a good, hard look at the rate reduction and who benefits and
the fact that our plan erases inequities in the Tax Code or eases
inequities in the Tax Code and that the biggest--the bottom end of the
economic ladder receives the biggest percentage cuts, people will come
to realize it. I think it's important to cut all tax rates.
Yes.
Q. Mr. President, in addition to making the tax cut retroactive,
your economic adviser said yesterday you would also support bringing
more of the benefits forward to the first year of the plan. Is that
correct?
The President. What I'm referring to is enhancing the cashflow of
the taxpayer as quickly as possible, and that's what we're going to work
on. I also saw some comments which I thought made a lot of sense, that
some in Congress view this as an opportunity to load up the tax relief
plan with their own vision of tax relief. I want the Members of Congress
and the American people to hear loud and clear: This is the right size
plan; it is the right approach; and I'm going to defend it mightily.
Q. There is no family, sir, representing the last tax bracket, the
bracket that would get the highest dollar return. Why is that?
The President. Well, I beg your pardon, I'm representing--
[laughter]--I got a little pay raise coming to Washington from Austin.
I'll be in the top bracket. [Laughter]
Former President Clinton
Q. Mr. President, on another note, sir, it appears the Clintons may
have taken some gifts that were actually given to the White House. Do
you feel that they should return any of these gifts?
The President. It's important for all the facts to be laid out on
the table, and I'm confident that the President--the former President
and First Lady will make the right
decision.
Thank you all.
Note: The President spoke at 10:18 a.m. in the Diplomatic Room at the
White House.