Remarks on Federal Tax Reductions Following Meetings With Members of Congress

The President. Ladies and gentlemen, thank you very much for being here. I have an announcement to make.

First of all, I'd like to explain—here with me, the Vice President; Don Regan, the Secretary of the Treasury—but with me also are—and I will not attempt to do these in seniority or anything—but Senators Howard Baker, Robert Dole, Bill Roth, Harry Byrd, Lloyd Bentsen, David Boren; and from the House, Barber Conable, Kent Hance, Bob Michel, and Trent Lott.

And the statement that I'd like to make is that last November, the American people sent a clear and resounding message to Washington that the highest order of business before the nation is to restore our economic prosperity. In recent weeks, as votes have been cast on the Federal budget, we, the elected representatives, have tried to send an equally clear message back home that we're listening and we're acting.

Today I'm pleased to announce that we're prepared to move ahead on a second front—to reduce the burden of Federal taxes. And just as we did on the budget, we're moving ahead with a bipartisan coalition in the Congress. We believe that on economic recovery, there can be no Republicans and no Democrats, only Americans. And with me here this afternoon, these gentlemen that I have just introduced, are many of the leaders of the bipartisan coalition that we're building.

In the course of the past several days, we're reached agreement in principle on a tax plan that all of us can support, and the main elements are these: First, the plan provides for a 5-percent cut in the personal income tax rates, across the board, beginning this October. That will be followed by a 10-percent cut in mid-1982 and another 10-percent cut in mid-1983—for a total cut in tax rates of 25 percent over 3 years. Second, the plan provides relief from the marriage tax penalty. Third, it lowers estate and gift taxes. Fourth, it provides incentives for individuals to save and invest. Fifth, it provides for accelerated appreciation for business investment so that we can have more jobs and our products can be more competitive overseas.

Now, these tax cuts, along with others to be incorporated in our plan, are an essential companion to the budget cuts now moving through the Congress. Taken together, tax cuts and budget cuts, this package will put us back on the road to a sound economy, with lower inflation, more growth, and a government that lives within its means. Our goal is a very simple one: to rebuild this Nation so that individual Americans can once again be the masters of their own destiny. Congressmen Conable and Hance will be introducing the tax bill in the House that we fully endorse.

And now let me express a word of special appreciation to those who are with me here today from the Congress. These gentlemen and others that they represent from Capitol Hill are the leaders of a new bipartisan coalition that we're forging on behalf of the American people. We come from different backgrounds. We even come from different parties. But we're united in the belief that we must work together to rebuild this economy. The American people have suffered economically for too long, and we just want to tell them help is on the way.

And now, the great majority of us—as a matter of fact, all but one of us—are going to leave this podium and throw to the kind mercy of all of you for whatever questions you may have of the Secretary of the Treasury, Don Regan.

Reporter. I take it you think you have the votes, Mr. President?

The President. I said we wouldn't take any question— [laughter] —and I'm glad I said it.

Q. I assume you wouldn't be here announcing this if you didn't have the votes?

Secretary Regan. That's correct.