August 1, 1985
I've kept you waiting long enough. [Laughter] I know I'm late, but thank you very much, and welcome to the White House. I know all of you've already heard the wisdom of Vice President Bush and Don Regan and Manley Johnson. Somehow I don't think they had in mind that they were saving the best for last. [Laughter]
Seriously, I want to take a moment to first thank so many of you for keeping me in your prayers when I was in the hospital. A number of you sent some very kind words of encouragement, and I'm truly grateful.
May I take a few minutes of your time today to lay out some of the thinking that went into our tax reform proposals, some of the philosophy behind it. When you talk about taxes, you're talking about the movement of money in the United States -- what goes to the Government, what stays in the economy and in the pockets of the people. And I want you to know what concerns motivated us as we considered the flow of money. We're concerned about those who would manipulate the system and invest a hundred dollars in a tax shelter to get a thousand dollar writeoff. And it's the system itself that we want to change.
We didn't worry about special interest groups and special interest pleading. We were concerned about the interests of all working Americans, starting with the central entity -- an entity that is itself central to the interests of the entire nation. We were concerned about the family, and so, we created a tax reform proposal that puts the family first. Why? Because there's nothing more important to all of us and nothing more important to our society and our nation and our future than the family. The family is where our children learn a moral view; it's where the values of personal responsibility and loyalty and kindness are taught. And it's not saying too much to say as the family goes, so goes the nation. And there are many people who share this view, and it isn't exactly revolutionary. And yet, in spite of that, in spite of our general agreement in this country that the family is important, the public policy of our nation has, in fact, worked against the interests of the family for decades now. You know the facts; you've heard them repeated today.
But I'll just say that for me the biggest proof of how careless we've been in our support of the family is the personal tax exemption for each child and dependent -- 1948, the amount of that exemption was $600. If we had kept up with inflation, the exemption today would be $2,700. Well, as you know, it hasn't nearly kept up. Administration after administration just hasn't been interested in raising the exemption. They've been more interested in finding new ways to spend each family's earnings. I'm tired of that kind of behavior, and I'm sick and tired of governments that put the family at the end of the line.
We raised the exemption to $1,000 in 1981 and indexed it to inflation so that today it's $1,040. And now, in our tax reform proposal, we're raising the exemption to $2,000 and, again, indexing it to inflation. Now, I'm proud of this, and there's one thing I want to make clear: Our tax reform plan is not static. We're working with Congress so we can put together a plan that we can all live with. But I'll tell you one thing: The $2,000 exemption is the centerpiece of our program. This is a family-first bill, and that $2,000 is very important to us and, I think, to you. Not only are we going to get the exemption up, we're going to get tax rates down in order to encourage economic growth. And it's economic growth that will give new economic power to the family. We're talking about jobs for your children, a future for your children.
Just parenthetically, by the way, I'm learning about a whole new species of animal as I work on tax reform. I call that animal the "I-like-it-but.'' [Laughter] I talk to a politician, I ask him how he feels about our plan, he says, "I like it, but . . . .'' [Laughter] "Well, I think you should increase capital gains,'' he says. I talk to another fellow, and he says, "I like it, but you've got to retain deductibility.'' And it's catching. I listen to them, and I understand why they're saying what they're saying. And they ask if I couldn't just bend on this or that, and I find myself saying, "Well, I like it, but . . . .'' [Laughter] But if I give in to everyone who's protecting their little loophole or their little special interest, the good news is we'll get a bill through Congress, and the bad news is it won't be tax reform.
Well, there are many elements of our plan that benefit the family that you're familiar with, such as our attempt to expend full IRA benefits to those who work in the home, as well as those who work outside it. And the point I want to make is that so often in the past we've met and we've discussed issues that are important to you and important to this administration -- school prayer and abortion, for instance.
But I want to urge all of you and ask all of you to help us also in the area of the tax reform. It has as much to do with how this nation lives its life as any other proposal or initiative put forth in the past decade. It has as much to do with how the family lives and whether it will flourish as any initiative that's proposed in the past decade. It's nothing less than crucial. And so, I frankly ask for your help and your interest. And if there's any more you need to know or discuss, any questions you have, please contact the members of the staff here, and they'll do whatever they can.
I need your help. I'm not embarrassed to ask for it. And I have faith that you'll come through, because you always have. So, that was the last, I guess, on the agenda here after all the other. I hope I've not been repeating too much of what you might have already heard.
But I thank you all for being here. God bless all of you.
Note: The President spoke at 12:11 p.m. in the East Room at the White House. In his opening remarks, he referred to Donald T. Regan, Assistant to the President and Chief of Staff, and Manley Johnson, Assistant Secretary of the Treasury (Economic Policy).