Statement on Tax Cuts

Wednesday, 15 April 2009 14:51 By President Barack Obama, t r u t h o u t | Transcript | name.

Statement on Tax Cuts
US President Barack Obama spoke in Washington on April 15 and promised Americans that he will rewrite the US tax code. (Photo: Reuters)

    President Barack Obama
    Tax Day Event

    Washington, DC
    Wednesday 15 April 2009

    Good morning. I know that April 15 isn't exactly everyone's favorite date on the calendar. But it is an important opportunity for those of us in Washington to consider our responsibility to the people who sent us here and who pay the bills.

    Across America, families like the folks who have joined me here today have had tough choices forced upon them by this economic downturn. Many have lost a job or are fighting to keep their business open. Many more are struggling to make payments, to stay in their home, or to pursue a college education. These Americans are the backbone of our middle class. They are the workers, innovators, and students who must power our recovery. Their dreams must be our own. And they need a government that is working to create jobs and opportunity for them, rather than simply giving more and more to those at the very top in the false hope that wealth will trickle down.

    That is why my Administration has taken far-reaching action to give tax cuts to the Americans who need them, while jump-starting growth and job creation in the process. We start from the simple premise that we should reduce the tax burden on working people, while helping Americans go to college, own a home, raise a family, start a business and save for retirement. Those goals are the foundation of the American Dream, and they are the focus of my tax policy.

    First, we have passed a broad and sweeping tax cut for 95 percent of American workers. This tax cut was a core focus of my campaign, it was a core component of the American Recovery and Reinvestment Act, and it is the most progressive tax cut in American history. And starting April 1st, Americans saw this tax cut in the extra money that they took home with each paycheck.

    Make no mistake: this tax cut will reach 120 million families and put $120 billion directly into their pockets, and it includes the most American workers ever to get a tax cut. This will boost demand, and save or create over half a million jobs. And the Congressional Budget Office has found that tax cuts like these for American workers are more than three times more effective in stimulating recovery than tax breaks for the very wealthiest Americans.

    This tax cut also keeps a fundamental promise: that Americans who work hard should be able to make a decent living. It lifts more than two million Americans out of poverty. And together with the child tax credit, it ensures that a working parent will be able to support their family.

    Second, we are helping small businesses keep their doors open so they can weather this economic storm and create good jobs. Instead of the normal two years, small businesses are now allowed to offset their losses during this downturn against the income they've earned over the last five years. This could provide a record number of refunds for small businesses, which will provide them with the lifeline that they need to maintain inventory and pay their workers.

    Third, we are helping Americans get the education they need to succeed in a global economy. For years, we have seen the price of tuition skyrocket at the same time that it became more and more important to earn a college degree. That is why we are making college more affordable for every American that needs a hand. That is why we are committed to simplifying the student loan process so more families can get the help they need. And that is why our $2,500 tax credit for all four years of college will help us reach a goal that will help our country lead in the 21st century: by 2020, America will once again have the highest proportion of college graduates in the world.

    Fourth, we are helping more Americans purchase homes that they can afford. Just as we must put an end to the irresponsible lending and borrowing that created the housing bubble, we must restore the home as a source of stability and an anchor of the American dream. That is why we are providing a tax credit of up to $8,000 for first-time home buyers. This will put a home within reach for hard-working Americans who are playing by the rules and making responsible choices.

    Fifth, we know that tax relief must be joined with fiscal discipline. Americans are making hard choices in their budgets, and we have to tighten our belts in Washington as well. That's why we have identified two trillion dollars in deficit-reductions over the next decade. That's why we're cutting programs that don't work, contracts that aren't fair, and spending that we don't need.

    We're also doing away with the unnecessary giveaways that have thrown our tax code out of balance. We need to stop giving tax breaks to corporations that stash profits or ship jobs overseas so that we can invest in job creation at home. And we need to end the tax breaks for the wealthiest 2% of Americans, so that folks like me are paying the same rates that the wealthiest 2% of Americans paid when Bill Clinton was President.

    Finally, we need to simplify a monstrous tax code that is far too complicated for most Americans to understand, but just complicated enough for the insiders who know how to work the system. I've started by asking Paul Volcker and my Economic Recovery Board to do a thorough review of how to simplify our tax code, and to report back to me by the end of this year. It will take time to undo the damage of years of carve-outs and loopholes. But I want every American to know that we will rewrite the tax code so that it puts your interests over any special interest. And we will make it quicker, easier, and less expensive for you to file a return, so that April 15 is not a date that is approached with dread each year.

    The folks I've talked to aren't looking for a free ride. They work hard and deserve a chance to get ahead. They're families like the Kirkwoods, who just want to own their own business and put some money away for their kids' tuition. They're workers like Clark Harrison, who has worked hard and wants to be able to purchase that first home. They're business owners like Alan Givens, who wants his company to sustain itself through the bad times as well as the good.

    For too long, we've seen taxes used as a wedge to scare people into supporting policies that increased the burden on working people instead of helping them live their dreams. That has to change, and that's the work that we've begun. We've passed tax cuts that will help our economy grow. We've made a clear promise that families that earn less than $250,000 will not see their taxes increase by a single dime. We've given tax relief to the Americans who need it and the workers who have earned it. And we're helping more Americans move towards their American Dream by going to school, owning a home, keeping their business and raising their family.

    So on this April 15, we are reminded of the enormous responsibility that comes with handling the people's tax dollars. And we are renewing our commitment to a simpler tax code that rewards work and the pursuit of the American dream.

Last modified on Wednesday, 15 April 2009 15:55