[Weekly Compilation of Presidential Documents Volume 39, Number 19 (Monday, May 12, 2003)]
[Pages 544-549]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks to the Tax Relief Coalition

May 6, 2003

    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,

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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 risktaking. You understand that 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. 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.
    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. 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. 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.
    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.
    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.
    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 
risktakers, 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.
    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 a time, so that America is more secure. We are winning 
the war on terror.
    And as a part of the war against terror, we removed Saddam Hussein 
from power in Iraq. 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.
    We will continue to meet our responsibilities to secure America. We 
will continue to

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dismantle the Al Qaida 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 assumed 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. 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. 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 mean, 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. 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.
    We've got two great strengths even better than the statistics I just 
cited: One, the entrepreneurial spirit is strong; and secondly, we've 
got the best workers in the world in America. 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 workforce. 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 there's 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.
    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 4 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.
    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, DC, is not the Government's money; it is the 
people's money.
    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.
    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 new jobs. That's the right answer, and 
that's the package I submitted to the United States Congress.
    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

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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 American history.
    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. 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.
    Instead of lowering all tax rates little by little, the Congress 
needs to do it all at once and needs to do it now. Instead of gradually 
reducing the marriage penalty, we should do it now. 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.
    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. That's what that means. That sounds fair to me. 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.
    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.
    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. 
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.
    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 in new equipment from $25,000 to 
$75,000 per year and index that to inflation.
    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 5 employees to 25 employees.
    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 workforce 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.

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    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 risk for the sake of creating jobs. The Rickards are 
here. They started their own business 3 years ago. It's a home 
remodeling business. Randy runs a tight ship. He's got four employees, 
and he's one of them. He comprises 25 percent of his workforce. 
[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.
    The jobs-and-growth plan would encourage investment by ending the 
double taxation on dividends. 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. 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] 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 cashflow, 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, part of my story is, I'm going to distribute on a 
regular basis cash out of my treasury in the form of a dividend.''
    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, you know, 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.
    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 with both 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 hear 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

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whatever is necessary to win the war. 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.
    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.
    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 e-
mails--[laughter]--or telephones or in some cases, buses. 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. 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.
    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. May God 
bless you all, and may God bless America.

Note: The President spoke at 10:31 a.m. in the Hall of Flags at the U.S. 
Chamber of Commerce. In his remarks, he referred to Luke and Daniel 
Brindley, owners, Jammin' Java; and former President Saddam Hussein of 
Iraq. The Office of the Press Secretary also released a Spanish language 
transcript of these remarks.