Full text of 2001 address before Congress

The other choice is to let the American people spend their own money to meet their own needs. I hope you will join me in standing firmly on the side of the people. You see, the growing surplus exists because taxes are too high and Government is charging more than it needs. The people of America have been overcharged, and on their behalf, I am here asking for a refund.

Some say my tax plan is too big. Others say it’s too small. I respectfully disagree. [Laughter] This plan is just right. I didn’t throw darts at a board to come up with a number for tax relief. I didn’t take a poll or develop an arbitrary formula that might sound good. I looked at problems in the Tax Code and calculated the cost to fix them.

A tax rate of 15 percent is too high for those who earn low wages, so we must lower the rate to 10 percent. No one should pay more than a third of the money they earn in Federal income taxes, so we lowered the top rate to 33 percent.

This reform will be welcome relief for America’s small businesses, which often pay taxes at the highest rate. And help for small business means jobs for Americans. We simplified the Tax Code by reducing the number of tax rates from the current five rates to four lower ones, 10 percent, 15, 25, and 33 percent. In my plan, no one is targeted in or targeted out. Everyone who pays income taxes will get relief.

Our Government should not tax and, thereby, discourage marriage, so we reduced the marriage penalty. I want to help families rear and support their children, so we doubled the child credit to $1,000 per child. It’s not fair to tax the same earnings twice—once when you earn them, and again when you die—so we must repeal the death tax.

These changes add up to significant help. A typical family with two children will save $1,600 a year on their Federal income taxes. Now, $1,600 may not sound like a lot to some, but it means a lot to many families: $1,600 buys gas for two cars for an entire year; it pays tuition for a year at a community college; it pays the average family grocery bill for 3 months. That’s real money.

With us tonight, representing many American families, are Steven and Josefina Ramos. They are from Pennsylvania, but they could be from any one of your districts. Steven is the network administrator for a school district. Josefina is a Spanish teacher at a charter school. And they have a 2-year-old daughter.

Steven and Josefina tell me they pay almost $8,000 a year in Federal income taxes. My plan will save them more than $2,000. Let me tell you what Steven says: "Two thousand dollars a year means a lot to my family. If we had this money, it would help us reach our goal of paying off our personal debt in 2 years’ time." After that, Steven and Josefina want to start saving for Lianna’s college education.

My attitude is, Government should never stand in the way of families achieving their dreams. And as we debate this issue, always remember, the surplus is not the Government’s money; the surplus is the people’s money.

For lower income families, my tax plan restores basic fairness. Right now, complicated tax rules punish hard work. A waitress supporting two children on $25,000 a year can lose nearly half of every additional dollar she earns above the $25,000. Her overtime, her hardest hours, are taxed at nearly 50 percent. This sends a terrible message: "You’ll never get ahead."

But America’s message must be different. We must honor hard work, never punish it. With tax relief, overtime will no longer be over-taxed-time for the waitress. People with the smallest incomes will get the highest percentage of reductions. And millions of additional American families will be removed from the income tax rolls entirely.

Tax relief is right, and tax relief is urgent. The long economic expansion that began almost 10 years ago is faltering. Lower interest rates will eventually help, but we cannot assume they will do the job all by themselves.

MORE FROM STATE OF THE UNION

State of the Union Section Front

Bush hits the road to sell Social Security ideas Bush urges ‘wise’ reform of Social Security Bush charts course, with rocks ahead Fineman: The power of swagger and a hug For moderates, a chance for subtle protest WP: Retirees would lose some profits WashPost: Issue is toughest domestic battle WashPost: Winning the war of perception Wolk: Bush’s domestic priority Russert: Bush bets presidency on Iraq State of the Union Section Front   Add State of the Union headlines to your news reader: