Background: Economic Rx
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KWAME HOLMAN: The solution for turning around the economy, according to the president, is to put more money in the pockets and pocketbooks of Americans. And the fastest way to do that is not to tax it away in the first place.
PRES. GEORGE W. BUSH: I am proposing that all the income tax reductions set for 2004 and 2006 be made permanent and effective this year. (Applause)
KWAME HOLMAN: The president refuted critics who charge his tax cuts primarily benefit the well-to-do.
PRES. GEORGE W. BUSH: This tax relief is for everyone who pays income taxes, and it will help our economy immediately. 92 million Americans will keep this year an average of almost $1,100 more of their own money. A family of four with an income of $40,000 would see their federal income taxes fall from $1,178 to $45 per year. (Applause) And our plan will improve the bottom line for more than 23 million small businesses. You, the Congress, have already passed all these reductions and promised them for future years. If this tax relief is good for Americans three or five or seven years from now, it is even better for Americans today. (Applause)
KWAME HOLMAN: The president again called for eliminating the tax on corporate dividends.
PRES. GEORGE W. BUSH: It is fair to tax a company’s profits. It is not fair to again tax the shareholder on the same profits. (Applause) To boost investor confidence, and to help the nearly ten million seniors who receive dividend income, I ask you to end the unfair double taxation of dividends. (Applause)
KWAME HOLMAN: The after-speech reactions in Statuary Hall on the president’s tax proposals were strictly partisan. Ohio’s Deborah Pryce is a new member of the House Republican leadership.
REP. DEBORAH PRYCE: Grow the economy and our troubles are gone. This is what the stimulus growth package is meant to do. The sooner we get that enacted into law the better off our country will be.
KWAME HOLMAN: And Rahm Emanuel, a freshman Democrat from Chicago, was a domestic policy advisor to Pres. Clinton.
REP. RAHM EMANUEL: A dividend tax cut to the wealthiest 1 percent; it doesn’t produce jobs, it produces good deficits but not jobs. We need a tax cut focused on middle class families focused on the priorities of middle class families face, making sure they have the healthcare they need. It also produces a kick, jump starts the juice that the economy needs so the jobs start to grow.
KWAME HOLMAN: The battle over tax cuts is expected to dominate the debate in congress in the months ahead.