Bush Pushes Economic Agenda, Urges Congress To Extend Tax Cuts

by Mike Godfrey, Tax-News.com, Washington

07 December 2005

President George W. Bush renewed his call for further tax relief for businesses, investors and individuals, and urged Congress to pass new legislation which will extend tax cuts already passed during his administration.

In a speech delivered on Monday to employees of the John Deere-Hitachi Construction Machinery Corporation Kernersville, North Carolina, Mr Bush argued that his economic policies, central to which have been tax cuts, have spurred the United States economy by creating jobs, lowering the unemployment rate to below 5% and allowing the economy to grow on average at 4.3% over the past two years.

"We not only reduced the taxes on individuals and families, we cut the taxes on dividends and capital gains to encourage job-creating investment. I understand most new jobs in America...are created by small business owners," Mr Bush stated.

Despite the federal government's growing expenditure requirements, most notably for regeneration of the Gulf Coast, which has been hit hard by a number of severe weather events, and for ongoing military operations in Afghanistan and Iraq, Mr Bush urged Congress to extend tax relief, arguing that allowing taxes to rise would endanger job creation and investment.

"So we're moving forward with a comprehensive agenda that's going to keep the economy growing to make sure people have got a hopeful future. Keeping this economy growing begins with a commitment to keeping your taxes low, and at the same time being wise about how we spend your money," Mr Bush remarked.

However, the President went on to warn that: "Unfortunately, just as we're seeing the evidence of how our tax cuts have helped the economy, we're hearing some voices in Washington that want to raise your taxes. The tax relief we set -- that we delivered -- is set to expire in a couple of years. In other words, it's not permanent -- it can go away. And unless Congress acts, you're going to get a big tax hike when that happens."

Mr Bush claimed that if tax relief was allowed to lapse, a family of four making $60,000 today would see their federal income taxes eventually go up by more than 50 percent.

Most of the tax cuts passed during Mr Bush's administration are set to expire by 2010, but the cuts in dividend and interest taxes to 15% - the centrepiece of his 2003 growth package - are set to expire in 2008 unless Congress acts. While the House Ways and Means Committee has approved a $56 billion tax cut which extends these tax cuts until the end of 2010, this provision had to be dropped from a Senate bill in order to win approval from moderate Republicans in the Finance Committee. The House could vote on its version of the tax bill on Thursday.

Recommended