Remarks at a White House Briefing for Members of the Tax Reform Coalition
The President. Thank you all, and welcome to the Old Executive Office Building. It's great to be here with some of the staunchest supporters of tax reform. We've come a long way since that day, nearly a year-and-half ago, when I asked Congress to take up the task of reforming our antiquated tax code.
The first thing we heard was a chorus of voices saying it couldn't be done. There was no way a simple, fair, and progrowth tax reform could survive the treacherous jungles of special interest politics. And they said that the wishes and hopes of the American people counted for very little in this city on the Potomac; what counted was pressure groups, lobbyists, and deals cut behind the scenes. Well, they forgot one thing: America didn't become great by being pessimistic and cynical. We didn't become the leader of the free world and the mightiest economic force on this planet by shrinking from challenges. The doom and gloomers are basically out of touch with the spirit of America—that can-do spirit that sees every problem as an opportunity and every obstacle as a challenge to be overcome.
That positive spirit and your effective support have helped us power through the opposition arrayed against tax reform and win a series of stunning victories in the Congress. In fact, a headline in the Washington Post told the whole story: "The Impossible Became the Inevitable." Well, we're on the threshold of final passage of a revolutionary tax code that—it could open up the floodgates of growth, invention, and enterprise and can make our future as big as our dreams. As I said, we're on the threshold—we're not quite there yet. We should remember, as the great seer and sayer Yogi Berra once said, "The game isn't over 'til it's over." The special interests have massed for a last-ditch effort to kill tax reform before it becomes the tax law of the land.
You know, tax reform has been declared dead so many times by the pundits that I'd be worrying if they weren't predicting trouble ahead. But we can't afford to become complacent. This is the decisive battle, and this is where all we've fought for finally will be won or lost. The special interests realize it's their last chance to stop the bill, because it's the best chance for the American people to get the fair, progrowth tax reform they deserve. In the days ahead, we're going to give it a 100-percent effort—one final all-out push over that goal line.
Let's not forget what is at stake here. First of all, tax reform will mean a tax reduction for most taxpayers. The present 14 rates will be collapsed into 2. Over 80 percent of all Americans will pay the lower rate of only 15 percent or will pay no taxes at all. The top rate will be slashed to 28 percent, the lowest in over 50 years. And we're keeping tax brackets indexed to make sure that inflation never again gives the tax-and-spend crew in Congress a free ride by automatically pushing Americans into higher tax brackets.
One of our primary goals has been fairness for families, and that's why the standard deduction will go way up. And the personal exemption—the one that taxpayers deduct for themselves and each one of the dependents—that exemption will almost double to a full $2,000 by 1989. That means that, when everything is added up, the typical family will end up with at least $200 more in tax savings every year. At the same time, some 6 million working poor will be dropped off the tax rolls altogether, making this one of the best antipoverty programs this country's ever seen.
I've said all along that the final tax reform bill had to keep incentives for American industry to invest in jobs and the future—and this bill does. It keeps important incentives for business investment. And while making sure every business pays a fair-share minimum tax, it brings the corporate rate down to 34 percent. By closing loopholes and lowering rates, we're going to bring America's investment money out from under the shelters and back into the productive economy where it belongs. We will no longer use the tax code to make economic and social policy. Instead, we're going to let market forces shape our economy into a sleek and efficient powerhouse of growth.
With tax reform, America will have the lowest marginal rates and the most modern tax code in the industrialized world—one that encourages risk-taking, innovation, and that old American spirit of enterprise. We'll be refueling the American growth economy with the kind of incentives that have helped create record numbers of new businesses and 11 1/2 million new jobs in 45 months. The Treasury Department estimates that the greater growth, spurred on by tax reform, will create 2 to 3 million more jobs in the next decade. I'll bet Jim Baker told you that already. But tax reform could have an even more profound and important effect on world growth. A British news magazine, the Economist, has described it as the beginning of a "tax revolution" that will "stalk through the West," as our industrialized partners cut tax rates in their own countries in order to remain competitive with the American dynamo.
Most economists agree that America won't be able to grow and prosper indefinitely if the rest of the world economy is sagging behind. We have already seen the slowing effects of our economy, of sluggish world growth. Without faster growth, other countries simply can't afford to buy as many of our goods and services, and that hurts American workers. Tax reform is one of our best chances to convince the other industrialized nations to join us on the growth path, to carry this revolution of hope and opportunity around the world and to create a strong, sound, and growing world economy.
All this is on the line: fairness for families, tax rate cuts for most Americans, one of the best antipoverty programs in history, and 2 to 3 million new jobs for Americans. If Congress votes against this bill, it will be voting against America's families, against America's working poor. It will be thumbing its nose at America's taxpayers, and it would be voting to throw 2 to 3 million new jobs out the window. America is at a crossroads: Either we go the way of fairness and jobs, opportunity and growth, or slink back along the path of politics as usual. Congress should have no doubts, the American people are watching closely. They are counting on us, and we dare not betray their just hopes for a better future. If we let them down, they will never forgive us, and we'll never forgive ourselves. I want to send a message to all the Members of Congress, for this vote especially: Vote your conscience, vote to give the American people the fair-share tax reform they want, deserve, and expect.
And I'd just like to just close with a couple of little historic notes. When the income tax, way back in 1913, was being debated in the Congress, one man very eloquently got up, and plumping for that tax-the income tax—and said, "We must have this tax not for government's needs, but for government's wants." And government wanted a lot. There was one Senator who argued against the measure and was literally ridiculed out of office at the next election. When he, in his debate, made a statement that if that bill were passed—that amendment to the Constitution became law—it was possible, in the future, that someday we might even be taking 10 percent of a man's earnings. So, government had more wants than—he shouldn't have been laughed out of Congress. They should have listened to him.
Well, thank you all very much for listening, and God bless you all.
Mr. Van Dongen. Mr. President, I'm Dirk Van Dongen with the National Association of Wholesaler Distributors. It's my privilege to be here this afternoon on behalf of the more than 1 million members of the Tax Reform Action Coalition—and by extension, the millions of American citizens which you referred to a moment ago.
We are on the verge of a historic event for this country in terms of economic policy and indeed, I think, social policy, because this legislation is major deregulation. It would not have occurred as Secretary Baker and Mr. Regan mentioned in their remarks, clearly, without your leadership, your visionary leadership, your commitment. We would not be standing here today were it not for that. You have been the quarterback of tax reform. You are, indeed, the most valuable player of tax reform. And in recognition of that, we in the Tax Reform Action Coalition would like to present you with this football jersey commemorating- [laughter] —you as the most valuable player of tax reform.
The President. Thank you very much.
Mr. Van Dongen. You're welcome. We have one more memento, Mr. President. In anticipation of what will be an outstanding victory for you in the House and in the Senate, we'd like to present you with the game ball, just a little bit before the game is over. The ball is inscribed, "Win One for America—Tax Reform" and carries your goals for tax reform—"Fairness, Jobs, Opportunity, and Growth." Congratulations, Mr. President.
The President. Thank you. Don suggested throwing it, but I'm afraid you wouldn't throw it back. [Laughter] Well, I want to thank you very much. Having played in the line in all my football years—guard, right guard, that is— [laughter] —I was like every other lineman. We all really thought that the backfielder's job was easy and that we could do it better or as well. And now, at last, I've made quarterback.
Thank you very much.
Note: The President spoke at 2:02 p.m. in Room 450 of the Old Executive Office Building. James A. Baker III was Secretary of the Treasury, and Donald T. Regan was Assistant to the President and Chief of Staff
Ronald Reagan, Remarks at a White House Briefing for Members of the Tax Reform Coalition Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/254805