Our government should not tax, and thereby discourage marriage, so we reduced the marriage penalty. (Applause.) I want to help families rear and support their children, so we doubled the child credit to $1,000 per child. (Applause.) 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. (Applause.)
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 three months. That’s real money.
With us tonight representing many American families are Steven and Josefina Ramos. (Applause.) They are from Pennsylvania. (Applause.) 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 two-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 two 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. (Applause.) And as we debate this issue, always remember, the surplus is not the government’s money, the surplus is the people’s money. (Applause.)
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 20 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. (Applause.) With tax relief, overtime will no longer be over-taxed time for the waitress. (Applause.) 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. (Applause.)
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.
Forty years ago, and then 20 years ago, two Presidents, one Democrat, one Republican, John F. Kennedy and Ronald Reagan, advocated tax cuts to, in President Kennedy’s words, get this country moving again. They knew then what we must do now. To create economic growth and opportunity, we must put money back into the hands of the people who buy goods and create jobs. (Applause.)
We must act quickly. The Chairman of the Federal Reserve has testified before Congress that tax cuts often come too late to stimulate economic recovery. So I want to work with you to give our economy an important jump-start by making tax relief retroactive. (Applause.)
We must act now because it is the right thing to do. We must also act now because we have other things to do. We must show courage to confront and resolve tough challenges, to restructure our nation’s defenses, to meet our growing need for energy, and to reform Medicare and Social Security.