October 10, 1985
Thank you Chairman Bryan, Governor Thompson, Representatives Porter, O'Brien, Martin, and Hyde -- thank you all. And I just was greeted out at the helicopter by the Deerfield High School student body, and now I see the band is in here also. Well, bless you. And I'd like to recognize also the founder of Sara Lee, Charles Lubin. Charles, you've made it very difficult for a lot of people to stick to their diets.
But it's great to be here in Deerfield and at the Kitchens of Sara Lee. You're the expert when it comes to baking, but I thought I'd bring you a recipe of my own. It's a recipe for tax relief, as you've just heard here from Chairman Bryan, for working families and prosperity for our country, and we call it America's fair share tax plan. Now, the main ingredients are tax rate cuts for individuals and businesses, loophole closings, and a near doubling of the personal exemption for you and every dependent in your family. And all of it adds up to increased incentives for work and achievement, rising real incomes, and a bigger economic pie for our country.
America's fair share tax plan is a plan for a growing, dynamic nation. You know, using that symbol of a pie, economic pie -- for too many years in this country, we've had a lot of people around government that have been trying to say that they want to make someone's share smaller, his slice of pie, so they can make someone else's slice bigger. The simple answer is let's make the whole pie bigger, and everybody gets a bigger slice. Lower, flatter tax rates will give Americans more confidence in the future. It'll mean that if you work overtime, get a raise or a promotion, or if your company does well and raises your salaries, more of your extra earnings will end up where they belong -- in your wallet and not in Uncle Sam's pocket.
Let's get specific: Our very conservative, long-time estimates show that our tax plan will add three percentage points to our gross national product. And that translates into the equivalent of 4 million new jobs and from 600 to 900 extra real dollars of income for every household, every family in America. And the immediate benefits of our plan are even more dramatic: We are hiking the standard deduction and raising the personal exemption, the deduction that the taxpayer can take for himself and every one of his dependents, to $2,000. Now, that'll mean that a family of four wouldn't pay one penny of Federal tax on the first $12,000 of income.
We also know how hard it is these days for families to save, so we're going to make it a lot easier. We're expanding the tax-free savings of IRA's, you know, those are those tax deductible savings that you can deposit for your own retirement some day and no tax to be paid until the payoff day comes. Well, we're now enlarging those so that they will fully cover both spouses working inside or outside the home or members of the Sara Lee team. But we figure that the housewife -- it better be recognized -- she's working too and, therefore, she can take out the money for that.
Now, those are some of the reasons that the Democratic-controlled House Select Committee on Children, Youth, and Families, and I emphasize that it is Democratic-controlled because that committee -- to show you that there are people on both sides of the aisle for this tax plan -- rated our tax plan the most profamily of any of the tax programs that've proposed to the Congress. Our proposals to give families a break from excessive taxation are really the heart and soul of America's fair share tax plan. It's our objective to make it affordable to raise families again. I've been all over this country stumping for tax fairness, and everywhere I go the American people are enthusiastically embracing tax fairness, just as you apparently have. I saw, and was reading as fast as I could, all those signs you were holding up, as well as the larger signs that you have. In fact, it wouldn't be too much of an exaggeration to say, ``Nobody doesn't like America's fair share tax plan.''
But the truth is that many people don't know the real story about our tax overhaul, because for the last month our fair share tax plan hasn't been given much space by the national media. They say that's because they've already reported that I've been saying this -- these things -- so they don't have to report it again. But I was thrilled to see a poll in the paper USA Today this week. It showed that in Cincinnati, where I went to talk about our tax plan last week, support for America's fair share plan among those who had heard the explanation of what the plan does shot up 14 points to an overwhelming 68 percent majority. Now, that's because the local media did its job and did it well. When the people hear all the facts, when they hear the case for tax fairness, as well as the case against it, America's fair share tax plan wins a landslide victory. The American people know a good deal when they see one. Now, I'd like to be able to visit every city and town in this country to talk about our fair share plan. I'd like to be able to go door to door, tell every American how our proposal will benefit them. But there's just not enough time if we're going to pass tax fairness this year, in 1985. So, we've just got to rely on the media to get the information out to the American people. Let them hear the facts and let the American people decide for themselves. A fellow named Thomas Jefferson once said, ``If the people know all the facts, the people will never make a mistake.''
Five years ago, one of the first things we did when we came into office was pass an across-the-board 25-percent cut in tax rates. Those tax cuts saved our economy from shipwreck and put us on a steady course of economic growth with increasing productivity, rising real wages, and declining inflation. And ever since 1984, the first full year that all of our tax elements were in place -- you will remember it came in three installments -- our expanding economy has brought in increasing amounts of revenue to the United States Government. The fact is, you can cut the rates but increase the total revenue because of the increase in prosperity and the number of people working and all those things. In the first months -- 11 months -- of fiscal 1985, revenues grew an astounding 10 percent at the fully reduced rates. The tax rate cuts and profamily measures of America's fair share tax plan are the next necessary steps to prosperity.
But we must also do something about the deficit timebomb that is ticking away, threatening to destroy all the progress that we've made. It's clear that tax hikes are not the answer -- they're like cooking the goose that lays the golden egg; they just slow the economy and shrink revenues. Tax cutting and economic growth are already bringing in, as I mentioned, sizable revenue increases. The problem is, for all the talk about the deficit, some in Congress are still spending and spending like mad. They gobble up that added 10 percent and still want more. The time has come to match all that deficit talk with action. It's time to stop complaining about the deficit and to simply reduce it.
Now, last week I announced my support for a Senate bill -- the Gramm-Rudman amendment -- that will put the force of law behind deficit reduction, locking us into a downward deficit path that will bring the budget into balance by 1990. Yesterday the Senate took a major step toward this proposal and should be commended. But some who've been talking the loudest about deficits would obstruct this bill. It seems that some would do anything not to have to kick their spending habit, even if it threatens the well-being of our nation and undermines the economic security of every American. Well, they may try to obstruct and delay, but I've got news for them -- the American people aren't going to put up with it.
Deficit reduction and America's fair share tax plan -- a sure recipe for a vibrant, surging economy into the 21st century. Chairman Bryan has been one of the most determined and eloquent supporters of our plan in the business community. He's been stumping the country, too, in an all-out effort for tax fairness. And, John, I thank you, and America thanks you. John has the vision to see that what's good for America's working men and women is good for American business and vice versa. America is a team, the best team there is, and if we all pull together, there ain't no stopping us now. And there's something else you all should be proud of. I've heard that you've achieved 68 percent participation in our U.S. Savings Bond drive. Well, congratulations, and keep up the good work.
Now, there's no reason that we shouldn't have a tax fairness bill through the Congress by the end of December. We're urging the House to conclude their work so that the Senate has time to act before the end of the year. Tax fairness will be America's Christmas present to ourselves, and we shouldn't let any Grinch steal our Christmas this year. Give the people in Washington a piece of your mind, and you might let those ladies and gentlemen in the press know how you feel, too -- who are right there with you. [Laughter] Let's do what's right for America. Let's pass tax fairness this year.
And let me just interject something -- in all of the conversation, and we talked about the deficit and all the attempts now going around to try and spread the blame around for who's responsible for the deficit -- oh, I've come in for my share of that. This deficit has been building and growing -- I've been talking out of the mashed-potato circuit 30 years ago. We've been deficit spending virtually every year for the last 50 years. And when some of us spoke up and said, ``We ought to end this; we ought to spend no more than we take in,'' the voices from Washington back over those 50 years said, ``Oh, it's quite all right; a little deficit spending makes for prosperity,'' and that, ``after all, it's all right, we owe it to ourselves.'' Well, let me just tell you what happened with this -- it's built into the structure. And that's why you can't all at once pull the rug out from under it and why we've got a 5-year plan pending to do this and bring it down, then level it off, and then have a constitutional amendment that says from now on government will spend no more than it takes in.
Let me give you a figure that would show you where trying to pin the deficit comes -- 1965 to 1980 -- 15 years. By 1980 the budget was just about 5 times greater than it had been in 1965. The deficit was 50 times greater than it had been in 1965. Well, that's just stupid; that's foolishness. And we're not going to take 15 years; we're going to take 5. And we're going to get the job done for all of you.
Thank you. God bless you all. Thank you, thanks very much.
[At this point, a large Sara Lee pound cake was presented to the President by Thomas MacLeod, president of Sara Lee Corp., and Earl Ritchie, plant manager of the Kitchens of Sara Lee.]
Thank you very much, thank you. I'll obey your instructions. First of all, Nancy wouldn't let me eat it all. [Laughter] But if I could make just one little correction, when I take it up on Capitol Hill, can I use it to blackmail them into doing what we want? [Laughter] All right. Thank you all.
Note: The President spoke at 11:15 a.m. In his opening remarks, he referred to John H. Byran, Jr., chairman of the board of directors and chief executive officer of the Sara Lee Corp., Gov. James R. Thompson, and Representatives John Edward Porter, George M. O'Brien, Lynn Martin, and Henry J. Hyde.