October 3, 1985
Thank you very much, Brad, and thank you all very much, and thanks for the tour of your plant. It was 99 44/100 percent pure fascinating. [Laughter] But I have to say, Ed, I appreciate the introduction because I once had an experience, back in that other life of mine, when I was on television every week. And on a New York street one day, a fellow suddenly, from 30 feet away, says, ``I know you. I see you.'' And he started toward me and everybody on the street stopped. And I'm kind of being stalked by him as he comes toward me. And he's getting a piece of paper and a pen out and got right up to me and told me he saw me all the time and wanted my autograph -- Ray Milland. [Laughter] So, I signed Ray Milland. There was no sense in -- [laughter] -- --
But it's great to be back in the Cincinnati area. I was out here last year, visiting Procter and Gamble during the campaign; didn't get exactly here, though. It hardly seems possible now that there was actually a Presidential candidate back then who promised the first thing he'd do if elected was raise your taxes. Well, the American people held a little referendum on that idea and sent a message loud and clear to Washington that America wants less government, less taxes, and more prosperity. And that's why leaders of the other party have now joined us in our effort to overhaul our nation's creaky tax code and replace it with a streamlined version, one that cuts personal and business tax rates, closes unfair loopholes, and spurs economic growth.
America's fair share tax plan is now working its way through the House of Representatives. It's up to them to send a bill to the Senate as quickly as possible so that we can pass a fairer, progrowth tax plan this year, in 1985. It's a challenge, I know, but I just don't think that America should have to wait for fairness and the increased growth that lower tax rates will bring. And if we have to, we're going to send Mr. Clean down there to keep an eye on them -- [laughter] -- and make sure they do the job right.
From the beginning, Procter & Gamble has been an important ally in our fight for tax reform. I was talking to one of your executive officers earlier, and he had kind of a funny way of talking, but I couldn't have agreed more with what he was saying. He said there's a rising Tide of good Cheer and Joy in the land. [Laughter] We see new Zest in the economy every day. [Laughter] And all we need now is a Bold new Dash to Safeguard the gain we've made already. [Laughter] I said thanks and congratulated him on the Top Job that you're all doing -- [laughter] -- in support of tax fairness.
Well, seriously, this company exemplifies the forward-looking, executive -- or expansive philosophy, I should say, that has made America the number one economic power in the world, the kind of positive thinking behind America's fair share tax plan. Your president, John Smale, testified before the House Ways and Means Committee that, although Procter & Gamble would be affected by our loophole closing, you support the initiative because you know lower tax rates mean greater growth and more jobs. And this company has the vision to look beyond the ledger books and see what's good for America is good for individual businesses and every one of their employees and customers, too.
Let me also take a moment to recognize the contributions of your Congressman, Bill Gradison. He's been an effective, untiring supporter of tax reform in the House. And if every Congressman were as supportive as Bill Gradison, we'd have tax fairness today. Bill and his Ohio colleagues -- Tom Kindness and Bob McEwen, and one who was going to be with us, but then got interrupted by the press of things in the House and couldn't, Del Latta -- they understand one thing that is all too often forgotten in Washington: that a tax overhaul that doesn't make life easier for America's working men and women isn't worth the paper it's printed on. That's why our profamily initiatives are the heart and soul of America's fair share tax plan.
Some people in Washington are saying that people aren't very worked up about tax reform. Well, I think the people just don't know yet what it is we're talking about. We're going to make it affordable to raise children again. You hear a lot about tax shelters, well, the one shelter we approve of is the family home. The truth is, the profamily measures of our tax plan are there to right a great historical injustice. Throughout the great tax explosion of the sixties and seventies, everybody with a paycheck got hit, and hit hard, by taxes; but those trying to raise families got clobbered. Not only did their taxes skyrocket, their personal exemption, the real value of the deduction they were allowed to take for themselves and each one of their dependents, was steadily knocked down by inflation.
Let me insert here just some figures that would give you an idea of how everyone was victimized. In 1977 -- Henry Hazlett, the economist, has done a study of this -- the average median income -- that's the halfway mark, half the people are above it and half the people are below it -- was $189 a week -- 1977. By now its up to $299 a week. And that means, of course, the individual that's making that many more dollars is paying considerably more income tax, has moved up through the tax brackets. But figure out that earnings in 1977 dollars. If the dollar today had the same purchasing power it had in 1977 -- that $299 only has $171 of purchasing power compared to $189 in 1977. But, in addition to that, because the tax is based on the number of dollars, not their value, that individual has moved up through a number of tax brackets and is paying a higher percentage of less purchasing power than he was before. In other words, families were getting a double whammy, double tax hikes. It wouldn't be an exaggeration to say that the colossal growth of government over the last two decades was financed by raiding the dwindling bank accounts of America's families.
If the personal exemption, which was $600 in 1948, had kept pace with inflation, it would be worth $2,700 today. But we plan to almost double the current exemption -- we can't go all the way, but our plan would make it $2,000 to make up for some of what families lost over the years. And to me that is only fair, and what's fair is worth fighting for. I hope you're with me on that. Well, we're also increasing the standard deduction of $4,000 -- or to $4,000 I should say, for joint returns, and this will mean that families as well as the elderly, the blind, or the disabled living at or below the poverty line will be completely scratched from the Federal income tax rolls. The U.S. Government will no longer tax families into poverty.
Our profamily measures will mean that a family of four doesn't have to pay one single cent of Federal taxes on the first $12,000 of income. And because saving is so essential to families but so very difficult with all these expenses, we're expanding the tax-free savings accounts, the IRA's, the individual retirement accounts, so that they are fully available to nonwage-earning spouses. We figure that the housewife is also working a full 40-hour week. Now, you shouldn't have to be affluent to experience the blessings of a home life, and that's a right to which every American is entitled.
I am glad to say that the Democratically controlled House Select Committee on Children, Youth, and Families has rated our tax proposal the most profamily tax proposal before the Congress, more profamily than any other proposal around and light years ahead of the present tax system. Now, this goes beyond economics, and, although, in my opinion, profamily policies are the best economics there is. This gets to the moral core of our nation. America has a responsibility to the future, and our children are our future. We're a nation of immigrants who've labored and sacrificed to give their children a better life. And that's the American dream. And we can't let American tax policies and big government policies kill that dream.
You know, our forefathers got so riled up over a tea tax, among other things, that they started a revolution. And now we have a tax on families, a tax on achievement, success, and aspiration -- a tax on the American dream. I think I know what Thomas Jefferson would have said about that, because Thomas Jefferson only had one line of criticism when the Constitution was adopted. He said, it lacks one important thing: a provision preventing the Federal Government from borrowing money. Well, I think it's time we had another revolution, a peaceful one this time, called America's fair share tax plan. We need your support. Let Congress know that you're progrowth, profairness, and profamily. And America's fair share tax plan is a gift that we owe to our children. And with your help and with this company's support and with these fine Representatives in the House that I've mentioned who are here with me, it's a gift that -- we all do our part -- we'll have wrapped up by Christmastime. And, then, maybe we can sing ``Joy to the World'' with extra feeling.
I mentioned here this -- some people have suggested publicly, lately, that I'm so concerned about the tax plan that I'm not concerned about the deficit, the Federal deficit that we're trying to correct. Well, don't let anybody fool you. Both of these things are important, but there's nothing more important than eliminating the deficit in Federal spending. And right now a few of our Senators and us are talking about a long-range plan -- not just every year trying to whittle a dollar here or a dollar there out, but a plan aimed at a balanced budget. And then we will obey the wisdom of Mr. Jefferson and see if we can't get a provision in the Constitution that says the Government, from then on, can't spend any more than it takes in.
Well, God bless you all. Thank you all. It's been a great pleasure to be here with you.
Note: The President spoke at 12:35 p.m. Prior to his remarks, he toured the plant and had lunch with plant employees in the cafeteria. In his opening remarks, the President referred to Owen B. Butler, chairman of the board of Procter & Gamble.