|The White House
President George W. Bush
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For Immediate Release
February 24, 2003
President Meets with Nation's Governors
For full transcript click here
What's on my mind is to make sure this country is strong and safe. One way to make it strong is to do everything we can to encourage job growth. My attitude is -- I'm sure you share the same attitude -- is that if somebody is looking for work and can't find a job, it means we've got a problem. And, therefore, to the extent that government influences job creation, we've got to do everything we can to create an environment for the entrepreneur to flourish.
I believe strongly in the notion that if a person has more money in their pocket, I know they're likely to demand a good or a service and when they do so, in a market-oriented economy, somebody is likely to produce that good or service, which means somebody is more likely to find work.
That's the whole principle behind that which I laid out for the country in '01. It's a principle which the Congress listened to -- and passed meaningful tax relief, because we were in a recession at the time. I worked -- we worked with Congress in '01 and they phased-in this tax reduction plan over a period of years.
My attitude is, since the economy is not as good as we like it to be, we ought to accelerate the tax relief which they've already planned. That will put about $70 billion immediately into our economy, since I intend to ask for this plan to be made retroactive to January 1st of this year.
It's got a lot of positive effects in it. First of all, you know, I'm always startled to talk about the marriage penalty in the tax code. I don't know why we penalize marriage in the tax code. It doesn't make sense. It seems like to me we ought to encourage marriage and so we ought to accelerate that aspect of the tax relief. We've increased the child credit to $1,000. It ought to be done this year, and not in the out years.
And as importantly, when you reduce the tax rates at the individual level, you also provide capital for small business growth. See, most companies are -- most small businesses are sole proprietorships or limited partnerships or sub-chapter S's. And, therefore, that entity pays tax at the individual tax rate. And so the reduction of all rates -- not just a selected few -- but the reduction of all rates provides needed capital in the small business sector of our economy.
Secondly, I'm asking Congress to allow for the deduction of up to $75,000 worth of capital expenditure for small businesses, which will have a stimulative effect on our economy. And, thirdly, I believe we ought to get rid of the double taxation of dividends. It's bad for -- when you tax something twice, it's unfair tax policy. It's fair to tax corporate profits; it's unfair to tax the senior who receives the dividend from the corporation you've already taxed.
I think getting rid of the double taxation of dividends will not only help our seniors -- I know it will help our seniors -- it will be stimulative in the sense that it gets $20 billion into our economy this year. But, more importantly, it helps capital formation, in a society which -- if jobs equal capital, we ought to be working on policy to encourage more capital formation.
It's a positive -- it'll also have the positive effect of corporate reform. After all, we went through a period of time when people said, invest in my company because the sky is the limit, see. We may not have any cash flow, but our story is a good one. You know, we may not be able to show tangible assets, but we've got a wonderful story, so buy on us.
When you have a dividend-oriented policy, the only thing you can distribute is cash, not false promises. And so the elimination of the double taxation of dividends will, in itself, serve as a corporate reform measure, which is important.
So this is the plan that I'm asking Congress to pass. And I believe we're going to get a lot of it passed. And I believe it's going to encourage growth. As a matter of fact, you know, these economists predicted in the blue chip forecast that the economy would grow at 3.3 percent if the Congress responded to a stimulative package. If it responded. And so you just need to know that jobs are on my mind, and I'm going to work hard to get Congress to pass the package. And I'm optimistic about it.
In this town, you hear a lot of early noise which sometimes fades when a chief executive starts taking the message to the people. And that's what I intend to do. And I know you do the same things, when you sell your packages at home. It's got a good effect, and I'm just beginning to make the case.