print-only banner
The White House Skip Main Navigation

Ask the White House
Privacy Policy  

Welcome to "Ask the White House" -- an online interactive forum where you can submit questions to Administration officials and friends of the White House. Visit the "Ask the White House" archives to read other discussions with White House officials.

John Snow
John Snow
Treasury Secretary
April 15, 2004

John Snow
It's great to be here on tax day! I know that Americans don't look forward to April 15, but this tax day is really hurting less this year, thanks to the President's tax cuts. As always, I look forward to taking your questions.

Mark, from Santa Fe writes:
How have the tax cuts for the rich promoted a record federal deficit?

John Snow
First of all, it is important to note that the President’s tax cuts were not “for the rich” – they were for every American who pays income taxes, and tax rates were reduced in every tax bracket, top to bottom.

In fact, higher income individuals are now paying a higher percentage of the total individual income. Before the President’s 2001 and 2003 tax cuts, the top 1% paid 30.5% of individual income taxes. Now they pay 32.3%.

Before the cuts, the top 10% paid 62.6%. Now they pay 64.8%. And on the other end, the bottom 50% paid 4.1% of all individual income taxes before the cuts, and now they pay 3.6 %. Which means that taxpayers that rank in the top 50% pay 96.4% of all individual income taxes.

As far as the deficit goes: it’s too high and it’s unwelcome. But it is understandable, given the extraordinary circumstances of recent history.

Remember that we are fighting a type of war that we have never fought before. We are fighting an enemy that requires a much broader variety of government resources than anything we’ve ever confronted. And we began this fight when we were economically wounded.

We believe that we can achieve what the President’s budget calls for: reducing the deficit by half over the next five years. Making the tax cuts permanent is an important part of deficit reduction because lower taxes have stimulated our economy so effectively.

A growing economy leads to increased Treasury receipts, and when combined with restrained spending, deficits can be shrunk.

consuela, from California writes:
Why is money green?

John Snow
When the Treasury started printing notes in 1862, green ink was the most plentiful. That is why they are called “greenbacks”.

Michael, from Powell, TN writes:
Do you have an idea of what our plans are to help the people of Iraq restart their economy?

John Snow
It is important to note that we were making plans to restart the Iraqi economy before the conflict began. There have been a number of specific and broad initiatives that have helped the Iraqi people. For instance, we have shipped frozen former Iraqi regime assets to Iraq, where they have been used for the benefit of the Iraqi people, including payment for civil servants and pensioners. The transfer of assets was important to keep the government running after the war and to help jump start the economy.

Second, we have focused on rebuilding economic and financial institutions. We wanted to make sure that the Central Bank of Iraq, the Ministry of Finance and the state-owned banks were open for business right after the war. We have had technical advisors in these institutions since last April providing advice to Iraqis on key decisions. We helped establish the Trade Bank of Iraq, which assists Iraqis in importing much needed capital goods. These goods include medicine for hospitals, books for schools and reconstruction equipment.

In addition, we have helped to implement sound financial and economic policies. A new currency was introduced so that the Iraqi people could have one unified currency accepted by the whole country. We are working with the Iraqis to develop good policies to insure that Iraqi people continue to have confidence in their new currency.

The US Government has also taken other steps to lay the foundations for a vibrant economy in Iraq. For example, we have been working with countries from around the world to repair Iraq’s infrastructure, such as its electricity and telecommunications systems. This is not only an important initiative for both the Treasury and the Administration but an important initiative for people from around the world. We also want to ensure that small businesses have ample opportunity to start up, grow and prosper in Iraq.

Thanks again for your question, Michael, and if you would like to learn more on Iraq’s economic and financial reconstruction, please visit .

Bryan, from Olney, MD writes:
Do you have any opinions on the flat tax?

John Snow
I think that the idea of a flat tax has a lot of merits, as do other ideas, like consumption-based taxes. I look forward to the discussion about what type of system we could switch to that would be simpler as well as fair.

Austin, from Mashpee, MA writes:
Dear Mr.Secretary, Good Morning I wanted to know how will I know if I am getting money from the goverment this year?

John Snow
Hello, Austin. I don't know if you are receiving a tax refund - that depends on your income and how much you've paid in taxes over the course of the year - but I do want to remind you that any money you receive is NOT the government's money.

It's YOUR money.

A tax refund is the same thing as receiving change after your make a purchase at a store. It means you paid too much for what you received (in this case, government services), so you are owed money back.

Paul, from Lincoln, NE writes:
When are we going to abolish the IRS and move to a truly fairsimple system of taxation, such a flat rate, or a consumption tax?

John Snow
I wish I could tell you when we will achieve a system that is significantly more simple while also being fair, but it is hard to say right now, since there are so many different types of plans that could be considered (like the two you've mentioned here).

Remember that the IRS is not really the source of the problem - they are simply doing their job by collecting tax payments.

The system is complicated because the tax code has become so complicated... And changes to the code start in Congress.

If you feel strongly about this issue, please don't forget to send letters to your representatives in Congress about it.

Duane, from Savannah, TN writes:
What is the average length of time between filing your tax return and receiving your refund? Also, do President and Mrs. Bush have to pay income tax while in office, and do they get an extension on filing their return?

John Snow
Duane, if you file electronically - something that I recommend doing - and use direct deposit, you get your refund in two weeks or less.

If you file with paper, particularly right at the deadline, the average refund time can be six to eight weeks.

And, yes, the President and First Lady pay income taxes just like everyone else. They actually file early since their tax information is released to the press.

In fact, their taxes were reported in the press yesterday. The President pointed out in a speech today that the people expect that type of disclosure from their public servants, and he is happy to comply.

Alex, from Mission Viejo, CA writes:
What would it take to overhaul the tax code, and what happened to the president's pledge to do so? Incremental "improvemnets" seem to have only made the code more complicated over time.

We appreciate your services to our nation and country during this time of war.

John Snow
Thank you for your question, Alex. I appreciate your point about incremental improvements to the tax code.

Every time we do anything with taxes, we inevitably increase the length of the code, and sometimes the complexity as well. We are certainly in need of more fundamental reform that would lead to increased simplification.

The President is dedicated to simplification and wants to see the issue discussed broadly among the American people before deciding on what type of plan would be the most fair.

Caleb, from Crawfordsville,IN writes:
Hello Mr. Snow. I am a senior in high school and right now we are discussing the Federal Reserve System. My question is this: How does the Treasury Department interact with the Fed? Thank you and have a good day.

John Snow
From a policy standpoint, we at the Treasury respect the independence of the Fed on monetary policy.

They operate independently, and that works very well. That said, we enjoy a close working relationship with the Fed.

For example, I meet weekly with Fed Chairman Alan Greenspan, for whom I have the deepest respect.

Robert, from Sparta, TN writes:
How many hours do you typically work each day? Also, what do you like best about being the Secretary of the Treasury?

John Snow
Thank you for asking this question, Robert. It is an honor to serve my country and to work for President Bush, and I'm really on duty in that capacity 24 hours a day, 7 days a week.

I typically spend 10-12 hours at the office each day, but also spend a great deal of time traveling the country, meeting with business leaders and taxpayers, talking about our economy.

Come to think of it, I really don’t have a “typical” day; I deal with an enormous variety of issues. But without a doubt, my favorite part of this job is having the opportunity to serve the American people, and to contribute to their prosperity.

John, from North Carolina writes:
In the constant search for efficiency and budget dollars, has there been a serious consideration towards eliminating the penny?

John Snow
There is an ongoing discussion about this issue, and your question is an interesting one. Ultimately, this is a decision for Congress, and the U.S. Mint will mint whatever Congress tells us to.

Carl, from Texas writes:
What is the adminstrations position on taxing of the internet?

John Snow
The Administration favors permanent extension of the Internet Tax Freedom Act, which bars virtually all taxes on Internet access.

., from . Lee, Mass writes:
Quite frankly, I don't know if I buy the suggestion that tax cuts are responsible for the economy slowly getting better. I think that this is the same type of failed thinking which occurred during the Reagan administration. We are the wealthiest country in the world and we can afford to tax citizens to improve services. This didn't work under Reagan and it isn't working now.

John Snow
It is actually a widely-accepted fact that President Reagan's policies turned our economy around and ultimately led to some of the best economic times in our nation's history.

Today, I see President Bush's tax cuts having an economic impact that is dramatic as well. In the last half of 2003 we saw a growth rate of 6.2 percent - that's the strongest in 20 years (since Reagan was President!).

Without the tax relief, it is estimated that real GDP would have been 3.5 to 4 percent lower.

We are a wealthy country because we are one that strives to let the people keep as much of their own money as possible; we would not be able to maintain our wealth if the government took too much away from the people who earned it.

Matt, from Idylwild writes:
Mr. Snow,

What I get really bothered with is the constant drumbeat for lower taxes. So, the President finally gets them and quite frankly, the benefit is miniscule. Maybe if I were a CEO or a millionaire it would be substantial. But for the average person, these tax cuts aren't very much.

John Snow
I have to say I disagree, Matt.

Rates in every single tax bracket have been lowered, and altogether 111 million individuals and families have received an average tax cut of $1,586 in 2004 because of the tax cuts made in 2001 and 2003. And nearly 5 million Americans, 4 million of them with children, will have their income tax liability completely eliminated in 2004.

If you pay your taxes through paycheck withholding, you may not have noticed your own lower taxes as much, but the amazing thing about tax cuts is that the economy feels them, and responds to them.

Look at our good economic news over the past several months, and you can see how much the whole country has felt the benefits of the tax cuts. Make no mistake: this economy is much stronger today and more people have jobs because of the President’s tax cuts.

Pete, from Naperville writes:
I can't afford to pay taxes this year, and I'm thinking about not filing. What are the chances I will get caught? I'm not asking for your sign-off on ducking taxes -- but if you were a gambling man, do you think I'll get caught? Thanks.

John Snow
Pete, banish the thought! That would be a terrible mistake! I know paying taxes can be tough, but it is the law and your duty as an American citizen to do so.

The government is extremely tough on those who don't pay their taxes and the risk of getting caught is simply not worth it.

Go ahead and file today even if you cannot afford the total payment - the IRS offers payment plans, where you can pay what you owe in installments. Please go to to find out more about payment plans.

Finally, you might be pleasantly surprised by how little you owe, and you might even receive a refund. President Bush's tax cuts are lowering the tax bill for every American who pays income taxes.

John Snow
Thank you so much for asking all of these great questions. I'm looking forward to participating in "Ask the White House" again soon.