Statement on Federal Income Tax Reductions
April 15, 1981
Today is the last day for filing income tax returns -- a day that reminds us that taxpayers pay too much of their earnings to the Federal Government.
And Americans will continue to pay too much money to the Federal Government until the Congress acts on our proposals to reduce tax rates across the board. Without these reductions, there will be an automatic $200 billion tax increase over the next 2 years.
While April 15 serves as a reminder, the people of the United States truly do not need to be reminded. They are victims of inflation, which pushes them into higher tax brackets. They are robbed daily of a better standard of living. They are discouraged from work and investment.
There are a few other alternative tax proposals now before the Congress, but compared to our proposals, they will result in higher taxes for the American people. In fact, these alternatives are not the answer; they are the problem.
Taxes are much too high to deal in half measures. In 1965 less than 6 percent of all taxpayers faced marginal rates of 25 percent or more. Today, more than one of every three taxpayers is in at least the 25 percent bracket. In addition, since 1965 the marginal tax rate for a median-income family of four has jumped from 17 percent to 24 percent in 1980. And under current law it would grow to a crushing 32 percent in 1984. We simply can't allow our already overburdened and demoralized taxpayers to suffer this unacceptable increase.
By comparison, our tax reduction program will reduce the marginal tax rate to 23 percent in 1984, a very important step in the right direction; a step that will play a significant role in rejuvenating the economy.
Our plan treats Americans at all income levels evenly and fairly. Three-fourths of the tax cuts will go to middle-income taxpayers. Under present law, these middle-income citizens -- who make between $10,000 and $60,000 -- pay 72 percent of all income taxes and will receive 73 percent of the benefits of our proposal.
The choice before us is clear. I strongly feel that the great majority of Americans believe that nothing would better encourage economic growth than leaving more money in the hands of the people who earn it. It's time to stop stripping bare the productive citizens of America and funneling their hard-earned income into the Federal bureaucracy.
Today is a day when the people reaffirm their commitment to our system by contributing a portion of their income to the Government. Americans have always been prepared to pay their fair share, but today they should make it clear to all elected officials that government has gone beyond its bounds and that the people will not tolerate the ever-increasing tax burden they have experienced in recent years.
I ask all Americans to join me in changing our tax system so that next April 15 we shall begin to celebrate tax reductions instead of simply one more predictable and painful tax increase.
Note: Secretary of the Treasury Donald T. Regan read the statement at 1:55 p.m. at a news conference with regional reporters, editors, and news directors in Room 450 of the Old Executive Office Building.