For Immediate Release
February 26, 2003
President's Remarks to the Latino Coalition 02/26/03
Click here for full transcript.
And so I welcome you all here. You come to America today during times of great challenges. There are some challenges which face us. But there's no hurdle big enough for the American people not to cross. This is -- we've got some mighty challenges -- to make sure the country is more prosperous and more hopeful, and the world more peaceful. But sin duda, we're going to achieve what we need to achieve, porque este pais es un gran pais, with great values and great hope and great strength.
The first challenge we have is to make sure people can find work. We want everybody working who wants to find a job. The challenge was created, really, because of a recession, and an attack on America, and the fact that some of our fellow citizens didn't realize that they needed to tell the truth all the time when it came to the numbers on their balance sheets. All three of those circumstances has created a challenge for the country. And the challenge is how to make sure the entrepreneurial environment is strong and steady, so that people are confident in taking risk; that small businesses are willing to take risks to expand.
And so I put out an economic plan that addresses the challenges that we face. First, I want to remind you we responded to the recession by tax relief. We believe that if a person has more money in their pockets, they're likely to demand a good or a service. And when they do so, in the marketplace, somebody is likely to produce the good or a service. And when that happens, somebody is more likely to find work. That's the premise of the economic policy we laid out in '01. I worked with the Republicans and Democrats to get the tax plan through.
We responded to the attacks on September the 11th, 2001. We had a terrorism insurance bill passed to encourage construction programs to go forward. We dealt with the airline issue. We got the stock market opened up quickly. And, of course, then we liberated Afghanistan as we sought to bring justice to the killers of the thousands of Americans and others.
We dealt with the corporate scandals by passing the law that clearly says that if you lie, cheat or steal, that if you defraud a shareholder or an employee, there is going to be certain consequences.
And so we made progress. But the economy still needs more work as far as we're concerned. And so I've gone to Congress, and I want to share with you quite quickly, quite briefly what I am asking Congress to do.
First of all, I think it's very important for us to focus on small business growth. We're interested in job creation. The first thing -- the first fact that Congress has got to understand is most small -- most jobs are created by small businesses, most new jobs. And so, therefore, any package ought to be focused on small business in America. And this package is. It basically says, we're -- we've asked Congress to cut rates; they did. But they phased in the tax rate cuts over three, five or seven years. Well, if the economy is not doing as well as it should today, and if Congress has one time seen the wisdom of letting people keep more of their own money, then step one is they ought to accelerate the tax relief plan to this year. All tax cuts in the future ought to be accelerated to this year. If they're good enough five years from now, they're good enough today. (Applause.)
Most small businesses are sole proprietorships, or limited partnerships, or sub-chapter S corporations, which means that they pay tax at the individual income tax rate. And so, therefore, when you accelerate rate cuts, you're really accelerating capital to be invested by small businesses. And that's what Congress must understand. The rate reduction package is good for the small business sector of the American economy. (Applause.)
As well, we believe we ought to increase the amount of expensing available to small businesses from the current limitation of $25,000 to $75,000 a year. This will encourage capital expenditure. (Applause.) It will provide incentive for people to expand their businesses. Capital expenditure equals jobs, and the more capital accumulation and capital expenditure we can encourage, the more likely it is somebody is going to find work.
And so this plan focuses on boosting the amount of money consumers have to spend, strengthening demand for products. But it also focuses on capital accumulation, capital formation, particularly at the small business sector of the American economy.
Furthermore, I believe we ought to eliminate the double taxation on dividends, and I will tell you why. If capital equals jobs, the double taxation of dividends means there is less capital in the private markets for investment. It's fair to tax a company's profits. It is unfair to tax that profit again when it's distributed to one of the shareholders. (Applause.) And so our plan encourages capital formation. Our plan addresses the needs of the 10 million seniors who have dividend income; it is beneficial for those seniors not to have to pay a tax on their dividends -- as a matter of fact, it will help them in the later years of their lives.
The dividend plan also is going to have a positive effect on our accounting process. I mean, after all, we went through a period of time when people said, invest in my company even though I may not have any earnings, I've got a good idea, so let's invest -- let's invest in something that may or may not happen.
A society which is focused on dividends says, you know, cash is really what matters. You can't -- you say, invest in my company, I'm going to pay a dividend -- is not based upon some pie-in-the-sky protection; it's based on the reality of cash. The dividend policy, if more companies pay dividends, will have a positive effect when it comes to the balance sheets of America. It will have a reform effect, because you can't project what may be. When you're promising dividends, you've got to project what is. And that's going to be good for investors, and it's going to be good for accountability when it comes to the corporate sector of America.
So this is the plan I'm asking Congress to look at. It's a reasonable plan, it's a stimulative plan, it's a plan that makes sense. And I'm asking for your help. I'd like for you to contact your congressman or your senator and let him know that this plan makes sense for the economic vitality of this country.