Radio Address to the Nation on Tax Reform
My fellow Americans:
It's autumn in Washington, and as children here and around the country return to school, Congress has returned to complete its work—most importantly, the final passage of our historic tax reform bill. We've come a long way from that day nearly a year-and-a-half ago when I asked Congress to take up the task of reforming our tax code, making it fairer and simpler and putting it on the side of families and growth, rather than on the side of special interests.
You may remember what the Washington pundits said at the time. We heard that there was no way that a simple and fair tax bill could survive the beating it would get as it ran the gauntlet of Washington lobbyists and insiders. Even as late as last April, we were told in the press that tax reform was dead. Well, there's one thing about Washington: There are always plenty of people around to tell you why something can't be done. But what those people always forget is that there's a force in our nation more powerful than all the lobbyists and insiders put together. And that force is the people—you, your neighbors and friends, and people like you across America.
And so, because of you and your support, in the last few months we've seen develop in Congress a broad, bipartisan backing for tax reform. And now, thanks to the leadership of Senator Bob Packwood and Congressman Dan Rostenkowski, the Senate and House are preparing to vote on the final bill. Passage of that bill will mean that for most of you taxes will come down. But even as I'm speaking to you, the special interests are launching their last-ditch offensive. You're going to be hearing a lot from them in the next few days. So, before they get started, let's just set the record straight.
First, let's be clear about what tax reform means to you and your family. One of our important goals in tax reform has been making the tax system better for American families. Well, if you're like 80 percent of Americans, enactment of this bill will mean that your top tax rate will be no more than 15 percent. Your standard deduction will go way up and your personal exemption will almost double to a full $2,000 by 1989. And no one's income will be taxed more than 28 percent. All this means that if yours is like the typical family, when everything is added up, you'll end up with $500 to $800 more a year. Not bad for starters. And tax reform means even more to lower income Americans. This bill is perhaps the greatest antipoverty program in history. It will take 6 million poor people off the income tax rolls entirely.
But what will it do for the economy as a whole? The short answer is: more jobs—2 to 3 million more in the next decade, according to the Treasury Department. The first reason for that is you. You'll have more money, and whether you spend it or invest it, you'll be helping to create more jobs. But that's not all. We're taking the shelter out of tax shelters. No longer will there be fancy schemes and fast angles that produce nothing but tax breaks. Lawyers, accountants, and businessmen will spend more time looking at the reality of supply and demand and less time exploring the never-never land of the tax code. They'll be looking for investments that create real products, real income, and real jobs.
I've said all along that the final tax reform bill had to keep the incentives for American industry to invest in jobs and the future. And that's what this Senate-House tax reform bill does. It keeps the most important incentives for business investment that we won in 1981—our tax bill. And while making sure every business pays a fair-share minimum tax, it brings down the overall corporate tax rate to 34 percent. The other industrial countries of the world know what this means. In almost every one, voices are now saying that the new American tax system will make U.S. businesses more competitive and that maybe they'd better get busy and lower their own tax rates, or lose out to us.
Five-and-a-half years ago, all of us began a long journey to restoring America's strength and greatness. We brought down inflation from some of the highest levels in our history to where it is today, the lowest level in over 20 years. Then we cut tax rates and saw the beginning of the strongest economic growth in 33 years. Since the recovery began, we've created more new jobs than Europe and Japan combined. Today we have a greater percentage of our people employed than ever before in our history, and never before have so many Americans held jobs.
Tax reform will help us continue that growth. I hope you will support our effort to defeat the special interests and win one for the hard-working taxpayers of this country. If your Congressmen and Senators cast their votes for America's future and enact the Senate-House tax reform bill, we can do just that.
Until next week, thanks for listening, and God bless you.
Note: The President spoke at 12:06 p.m. from Camp David, MD. Bob Packwood was chairman of the Senate Finance Committee, and Dan Rostenkowski was chairman of the House Ways and Means Committee.
Ronald Reagan, Radio Address to the Nation on Tax Reform Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/254684