By April 15th millions of Americans will have filed their income tax returns, honestly and carefully fulfilling their duty as citizens. For most of us, tax day has never been what you would call a cause for celebration, but this year is different. This is the last gasp of the old Tax Code. This April 15th is the last time Americans will pay the higher, complicated rates of the old system. Starting this year, tax reform takes over: Now our tax laws are fairer, and personal income tax rates lower for most Americans. Approximately 80 percent of all taxpayers will be paying less in taxes or will be paying no taxes at all. From now on, April 15th will be a lot easier to take.
There are two stages to tax reform, two major tax rate cuts: one that started January 1st of this year, the next scheduled to take place the beginning of 1988. When tax reform is fully in effect, the personal exemption—the deduction you take for yourself, your spouse, and every dependent in your household—that exemption will be practically doubled. The standard deduction also increases dramatically. Our present 14-rate structure will be collapsed into only 2 rates: 15 and 28 percent. Millions of Americans with low incomes will be dropped from the Federal income tax rolls altogether. Starting this year, America has the sleekest, most modern, most competitive tax structure of all the major industrialized nations. Our economic expansion, already one of the longest on record, is being given another shot of adrenaline. That means more jobs, more growth, more prosperity for all Americans.
That's the good news. The bad news is that some in the leadership of the Democratic Party are suggesting, in effect, repealing tax reform, delaying next year's tax rate reduction and turning it into a mammoth tax increase on the American people. Some have other mischievous schemes for raising your taxes.
Let me put this in plain English: No way! Congress is proving again this year that it will simply spend every cent it takes away from the people, and then it will spend a little more. We will not break our word to the American people. There will be no tax hike; tax rate cuts will go ahead as scheduled. We're cutting tax rates in 1987 and 1988, and they're going to stay that way.