We recognize that nobody can sit in an office in Washington, D.C. and decide to make America prosperous. Our job is to preserve the freedoms that gave birth to this nation, to encourage free enterprise, and to give people confidence that their hard work will be rewarded, not punished. And that begins with leaving more money in the hands of those who earn it.
For that reason, at the start of our administration, President Bush asked Congress to pass significant, broad-based tax relief. The House and Senate responded with historic pro-growth legislation. We reduced taxes for every American who pays income taxes. We doubled the child tax credit, reduced the marriage penalty. And in 2003, we accelerated the rate reductions; we created new incentives for small businesses to invest. And in order to lower the cost of capital, and to encourage firms to expand and hire new workers, we reduced the tax rate on capital gains and dividends.
Now the evidence is coming in -- and the Bush tax relief has proven to be exactly the right policy for our country. If you think of all that's happened in the last six years -- the recession we inherited, terrorist attacks, corporate scandals, natural disasters, a tripling in the price of oil -- it's remarkable how resilient this economy has been. In fact, since 2001, our GDP has grown by 16 percent. Let me just put it in perspective: In only six years' time, the American economy has expanded by an amount greater than the entire economy of Canada. The late Milton Friedman said that "Most economic fallacies derive from the tendency to assume that there is a fixed pie -- that one can gain only at the expense of another." We've shown once again that the right policies can make the pie a lot bigger, and that the gains can be widely shared. We've also disproved maybe the biggest, most persistent fallacy in Washington -- and that's the idea that pro-growth tax cuts are inconsistent with fiscal responsibility.
The fact is that pro-growth tax cuts once again have helped to drive an economic expansion and generated higher than projected revenues. You might also recall that back in 2004, President Bush set a goal of cutting the deficit in half by 2009. This
pledge was greeted with skepticism, to put it mildly. Yet we met that target in 2006, three years ahead of schedule. All told, federal tax receipts have gone up by more than $520 billion in the last two fiscal years. That's the largest two-year increase in history. By now it's time for even the skeptics to admit that a lower federal tax burden is a powerful driver of investment, growth, and new jobs for America's workers. And that increased economic activity, in turn, generates revenue for the federal government... On the revenue side, we're going to keep working on a low-tax policy that promotes growth and keeps government within its proper limits. Under present law, many of the Bush tax cuts are still set to expire over the next few years. We feel strongly that Congress should make all the tax cuts permanent -- and that
includes ending the federal death tax.
I know we've got some Democrats with big ideas for taxes they want to raise. They ought to realize that no nation has ever taxed its way to prosperity. And if they try that, they're going to find out what the rest of America already knows -- that President Bush is a man of principle and a man of his word.
Monday, March 05, 2007
Cheney Sets Out Case for Tax Cuts
On Thursday Dick Cheney spoke at the conference I was attending in Washington. He spoke a bit about tax cuts - he didn't talk about 'sharing the proceeds of growth'. He talked about the benefits of tax cuts to the economy and used concrete examples to show how they have worked.