CNN LIVE EVENT/SPECIAL
Bush Pitches Plan During Visit to Flag Factory
Aired January 9, 2003 - 10:08 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: I want to go now to another one of our top stories, and that is President Bush. He is speaking at this hour. He is in Alexandria, Virginia, speaking at a flag company, talking about his economic stimulus package.
Let's listen in.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... they ought to think it's good enough in '03 to let people keep more of their own money. And the phase-in is in '04 and '06, and all we're asking congress to do is take the law they've already passed and accelerate the tax relief to today. As a matter of fact, when they pass that, I'll then get the Treasury to make it retroactive -- make it retroactive, the Treasury would then account for that retroactivity so that you get immediate money into the economy. You notice the effects of the tax relief quickly.
All people who pay taxes should get tax relief. The tax relief is already in place. If tax relief is good enough three years from now for the American people, given the circumstances of today, it's good enough today, and Congress needs to hear that.
The plan is fair -- and the other thing we're going to do is accelerate aspects not only the tax rate reductions, but the marriage penalty ought to be accelerated, the benefits of the marriage -- reducing the marriage penalty ought to be accelerated. It's a little odd that we had a marriage penalty to begin with.
BUSH: It seems like we ought to not penalize marriage; we ought to encourage marriage. We ought to speed up the increase in the child credit. If you're a mom or a dad, you ought to get an increase in your child credit. And we ought to accelerate the reduction of the lowest tax rate from 15 percent to 10 percent. And these are all items that allow me to tell you that 92 million Americans benefit from this.
You hear a lot of talk in Washington, of course, about, you know, "This benefits so and so," or "This benefits this." They call it the class warfare of politics. Let me just give you the facts: Under this plan, a family of four with an income of $40,000 will receive a 96 percent reduction in federal income taxes. Now, that may not mean a lot of money to some of the big shots; it means a lot of money for the family of four making $40,000.
The income taxes would drop from $1,178 a year to $45 a year. That's real significant money for this family. It's money that family would have to save, invest, to help with the credit card squeeze. It's money that the family would have to make decisions on their behalf. Somebody asked me earlier, why can't Congress see the wisdom of this?
And one of the answers is, is that some in Congress would rather spend the money themselves as opposed to trusting you to spend your own money. At least that's how I view the debate.
This tax relief is real and it's significant. I was with Wayne (ph) and Candy (ph) -- or I was with Wayne (ph) -- they're going to save $2,500 a year. The folks at the so-called roundtable -- it happened to be square, by the way.
BUSH: Anyway, Wayne (ph) was with us. We were talking about his family. Joe (ph) and Kristin (ph), two hardworking Americans. They've got two children. They'll have a yearly savings of $900; an 18 percent reduction in what they pay to the federal government.
This is a fair plan, it is an important plan and it's a plan that will help people find work, because it'll help keep this economy growing.
Secondly, one of the things in the plan is how do we affect the small-business owner? If 70 percent of the new jobs in America are created by small-business, then we ought to be figuring out how to create incentives for small-business to grow. Makes sense.
First thing is, is that most small businesses pay -- file their small-business income on their personal income tax returns. Most are small businesses or limited partnerships -- most small businesses are limited partnerships or sole proprietorships. Al (ph) is not. He's a C Corp, so he pays at the corporate level; but many small businesses are.
So when you reduce the rates on everybody who pays taxes, you're reducing the taxes on small-business owners, which gives that small- business owner more money to invest in the growth of the business which means it's more likely he or she will be able to hire somebody additionally. When you reduce the income tax rates on Americans, you're affecting small business, and that's important for people to know.
It's a fact, and it's a real fact.
As well, I've asked the Congress to raise the deduction from $25,000 to $75,000, the amount that a business can deduct from the investment of equipment, and this makes sense for a company like the National Flag Company. See, it is a capital intensive business. It requires sophisticated machinery to run this business, as the folks who work here know. It's pretty darn sophisticated, isn't it?
BUSH: If this plan were to go through, the company -- Al (ph) tells me, since he is the company -- part of the company, a decision- maker in the company -- says that he would buy two more machines, which would create more job opportunities for people. In other words, this is a plan that says that if you are willing to take risks and invest more, that there's a benefit for doing so.
It's an incentive for small business to increase. It's aimed at small business. It makes sense for small business. And if Al (ph) makes the decision to buy more equipment and to hire more people, imagine all the different Al's (ph) around the country that are making the same decision. It's the accumulative affect of his decision as well as millions of others that will enable me to predict that more jobs will be created, more opportunities -- the people making the machines will have more opportunity, and it'll have a positive affect throughout our entire economy.
The third aspect of this plan is on dividends. Dividend is money that companies gives back to investors out of their profits. Right now this country taxes dividends twice...
KAGAN: We've been listening to President Bush. He is speaking this morning at a flag factory in Alexandria, Virginia, pushing his economic stimulus plan. He's talking about how he believes it will affect the average person.
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