[Weekly Compilation of Presidential Documents Volume 37, Number 6 (Monday, February 12, 2001)]
[Pages 271-273]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Transmitting Proposed Tax Cut Plan to the Congress

February 8, 2001

    Thank you very much for that warm welcome. It's good to see so many 
friends here in the Rose Garden. This is our first event in this 
beautiful spot, and it's appropriate we talk about policy that will 
affect people's lives in a positive way in such a beautiful, beautiful 
part of our national--really, our national park system, I guess is, as 
you would want to call it.
     This is the land of economic miracles, and we are experiencing one 
here in our country. Latino businesses are growing faster than the 
Government can count. Back in 1997 there were 1.4 million Latino-owned 
businesses. Since then, the number has been growing by an estimated 25 
percent. No one is entirely sure of the total. Your success has left all 
statistics behind, and America is better off for it.
    The businesses you have built prove the continuing power of the 
American ideal, a promise of advancement to men and women of every 
background. This country appreciates you. We appreciate your vision, 
your hard work. And I congratulate you for your success.
    To succeed, Latino-owned businesses need the same things all 
businesses need: moderate regulation, a sensible legal system, and a 
growing economy. For several months, however, our economic growth has 
been in doubt. And now, it may be in danger.
    Americans are hearing, and some feeling, the economic slowdown. 
Americans hear about the news--many are beginning to actually feel what 
it means to be in an economic slowdown. Consumer confidence has slumped. 
Many business leaders are worried. A warning light is flashing on the 
dashboard of our economy. And we just can't drive on and hope for the 
best. We must act without delay.
    My job is to lead. A President should not wait on events. He must 
try to shape them. And the warning signs are clear. All of us here in 
Washington, the President and the Congress, are responsible to confront 
the danger of an economic slowdown and to blunt its effects.
    Today I am sending to Congress my plan to provide relief to all 
income taxpayers, which I believe will help jump-start the American 
economy. We must give over-charged taxpayers some of their own money 
back. We must give low income families fairer treatment. We must give 
small businesses a better chance to grow and to hire. For all these 
reasons, I urge Congress to help me strengthen our economy by lightening 
the tax load, the tax burden on the American people.

[[Page 272]]

    Here's how my tax relief plan will work. We will simplify our tax 
code, reducing today's five brackets to four lower ones: 10 percent, 15 
percent, 25 percent, and 33 percent. Families with children will also 
receive a tax credit of $1,000 per child. We will end the death tax, 
reduce the marriage penalty, and expand tax incentives for charitable 
giving.
    My plan is directed toward individuals and small businesses. It 
offers relief for everyone who pays income taxes, and it keeps our 
national commitments to Social Security and debt reduction. These are 
the details. But it is the results that will matter most.
    If we pass this tax relief plan in a timely manner, three important 
things will happen: First, we will return $1,600 to the typical American 
family with two children. Working families earning between $35,000 and 
$75,000 will keep anywhere from $600 to $3,000 more each year. With this 
tax relief, families can save or pay off debt or pay for higher energy 
bills. This $1,600 is good for a family. Multiplied by millions of 
families, it is good for our Nation's economy. It means greater demand 
for your goods and your services at a time when demand may be slowing. 
I'm committed to accelerating economic growth. Lower interest rates will 
certainly help, but they need to be reinforced with tax relief as well.
    There is talk in Congress of bringing this relief even quicker by 
making it retroactive to the beginning of this year. I strongly support 
that idea. We need tax relief now. In fact, we need tax relief 
yesterday. And I will work with Congress to provide it.
    Our economy faces this challenge: Investors and consumers have too 
little money, and the U.S. Treasury is holding too much. The Federal 
Government is simply pulling too much money out of the private economy, 
and this is a drag on our growth.
    Over the past 6 years, the Federal share of our GDP has risen from 
18 percent to 21 percent, about as much as our Government took during 
World War II. President John Kennedy faced a similar situation in the 
1960's. He warned then against storing up dollars in Washington by 
taking away more than the Government needed to pay its necessary 
expenses. ``High tax rates,'' he said, and I quote, ``are no longer 
necessary. They are, in fact, harmful. These high tax rates do not leave 
enough money in private hands to keep this country's economy growing and 
healthy.''
    Forty years later our Treasury is full, and our people are 
overcharged. Returning some of their money is right, and it is urgent.
    The second effect of my plan is to substantially reduce the 
taxpayers that bar too many Americans from the middle class. Our new 10-
percent rate, along with the child credit, will cut Federal marginal tax 
rates by 40 percent on many struggling taxpayers.
    I've talked about this problem for over a year, and I'll talk about 
it until we fix it. Under current law, say a waitress is working hard to 
get ahead, and she may have two children, earning $25,000 a year faces a 
higher marginal tax rate than a successful lawyer earning 10 times as 
much. That is not right, and that is not fair. The Government would take 
from her nearly one-half of every extra dollar she earns. Her hardest 
hours are taxed at the highest rates.
    Today, tax codes are sending--our tax code sends this message to 
this woman: Stay where you are; you'll never get ahead. But that is not 
the message of America, as far as I'm concerned. And it must not be the 
message of our tax code. Our tax system must reward the dreams of a 
better life.
    My plan dramatically reduces the marginal rate on many low income 
earners, rewarding overtime or a hard-won raise, encouraging Americans 
on their path to the middle class. Six million families, one out of 
every five families with children, will no longer pay Federal income 
taxes at all under our plan.
    This country has prospered mightily over the last 20 years. But a 
lot of folks feel as if they've been looking at somebody else's party, 
that they've been looking from the outside. It's time to open the door 
and welcome everyone in.
    And finally, this tax relief plan will be good not just for the 
short-term needs of our country and for our economy but for the long-
term health of our Nation. Every big business began as a small business. 
Many of the great companies of our time were founded when the maximum 
tax rate on small businesses was only 28 percent. Today, many small 
businesses are paying a tax rate as high as 40

[[Page 273]]

percent. Thousands of sole proprietors, people with dreams, pay high, 
high rates. That's not how one encourages innovation or job creation or 
expansion.
    My tax relief plan reduces the marginal rates that many small 
businesses pay. We want you to have a fighting chance in a difficult 
economy. We also want people to have more funds to reinvest and to grow 
their businesses. We want to make sure that the next generation of 
success stories continues far into the future. I hope all of you will 
help me in this task. We have minds to change, and we've got some laws 
to pass. Our course is set, and I believe our case is strong.
    This week I've been meeting with Americans of all backgrounds--young 
families, leaders of large companies, entrepreneurs, single moms. All 
are worried about the direction of our economy. All are agreed that 
action is needed. And today I'm acting, for your sake.
    I urge the Congress to pass my tax relief plan with the swiftness 
these uncertain times demand. I will now sign a letter of transmittal 
and soon hope I'll be signing the needed tax relief.
    Thank you for coming.

Note: The President spoke at 10:15 a.m. in the Rose Garden at the White 
House.