Bush on the Economy: The Basic Tax Message

By January 8, 2008Taxation

From the President’s remarks yesterday in Chicago.

Unfortunately, Americans could be facing higher taxes unless Congress takes action to stop it. You see, in less than three years, the tax cuts that we passed are set to expire. That creates uncertainty. If you’re an entrepreneur thinking about investing, and all of a sudden you’re looking at a horizon where you taxes may be going up, it creates uncertainty. We don’t need more uncertainty in an uncertain market. If Congress allows this to happen we’ll see an end to the measures that have helped our economy grow, including the 10 percent individual income tax bracket, the reductions in the marriage tax penalty, and reduced rates on regular income, capital gains, and dividends.

And one of the interesting things that happens if taxes go up — people say, well, we’re just going to tax the rich. The problem is, many small businesses pay taxes at the individual income tax rate because they’re Subchapter-Ss, or limited partnerships. We don’t need to be running up taxes on small business owners. After all, 70 percent of new jobs are created by small businesses in America. Increasing the tax burden on small businesses will make it less likely people will be willing to create new jobs.

And so I will strongly urge that the Congress keep taxes low. One way to do it is to make sure that all the tax cuts we passed are made permanent. If you’re interested in taking uncertainty — (applause.) One of the other taxes that’s going to return will be the death tax, which is being phased out, and in 2011 it kicks back in, which means it’s going to be hard on estate planning, let me put it to you that way. I hope a lot of people don’t decide to move on just because of the tax cut. (Laughter.) I’m absolutely convinced we can do a better job of having the estate tax put on the road to extinction and then let it pop back up. It makes no sense.

Agreed. Agreed. Agreed. And entirely consistent with the NAM’s White Paper, “A 21st Century Tax Policy to Promote Job Creation and Economic Growth.”

Expect substantive proposals at the January 28th State of the Union address.

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