FROM THE OFFICE OF PUBLIC AFFAIRS

December 15, 2004
JS-2151

The Honorable John W. Snow
Prepared Remarks: Opening Statement for the President’s
Economic Forum
Panel on Tax and Regulatory Burdens
December 15, 2004

Good morning and thank you all so much for being here. I especially appreciate the time and expertise that is being generously given by our panel members today. Each one of you is an expert, thanks to both study of these issues and your actual life experience. So thank you very much for participating. I look forward to hearing your ideas.

The purpose of this conference today is to talk about where our economy stands, the challenges we face and the steps we must take to ensure our economy will continue to grow, create jobs and meet the needs of American workers in a changing world. Discussions will cover everything from tax and regulatory burdens – which is our task here on this panel – to the impact of lawsuit abuse, the high costs of health care, the fiscal challenges we face near and long term, and the importance of preparing American workers for the jobs of the 21st Century.

I'm pleased to report that our nation is on track for sustained economic growth because of the resilience and determination of the American people and the pro-growth policies of this Administration. However, the President will not be satisfied until every American who wants to work can find a job, and all Americans have economic security.

The President believes a changing world can be a time of great opportunity for all Americans to earn a better living, have a rewarding career, and enjoy a fulfilling life. We must transform some of our most fundamental, but outdated, systems – the tax code, our health care system, worker training programs, and retirement plans – so all Americans are equipped and prepared to realize the American Dream.

As I mentioned already, our panel will address the burden of taxes and regulations on our economy. It is, and has been, a top priority of the Bush Administration to be mindful of those burdens, and to reduce them whenever possible. The President believes that this is critical in the effort to make America the best place in the world in which to invest and create jobs.

Tax rates are lower in America today because of the President's leadership, and as a result the economy is much stronger.  The linkage between low tax rates and economic growth is clear and we see it in the greatly improved performance of the economy since the President's tax cuts took effect.

Today tax rates are lower for every American who pays taxes – lower for families, lower for workers and entrepreneurs alike and lower for investors.  Tax rates on capital have been significantly reduced.  The lower tax rates on dividends, on capital gains, on small business, on families and workers have put us on a path of economic growth and strong job creation.

High tax rates hurt an economy but so can regulation, which in many ways acts like a tax.  The President knows this and has directed his Administration to make sure that new regulations do not cost our economy more than they are worth.  Regulation can be particularly harmful to small businesses who don't have the resources – lawyers and accountants – to deal with the burdens. 

Small businesses create most of the new jobs in the United States and excessive, burdensome regulation undercuts their ability to grow, expand and create jobs.  So it is absolutely critical that we seek to reduce the burden of regulation wherever possible.

Since the President took office, his Administration has slowed the growth of burdensome new regulations by 75 percent, while still moving forward with crucial safeguards for homeland security, human health, and environmental protection. Thanks to the President's emphasis on protecting small business from excessive regulation, American small businesses were spared $6 billion in regulatory compliance costs in fiscal year 2003 and have saved more than $30 billion in regulatory costs since 2001, according the Small Business Administration's Office of Advocacy. When we look at our terrific economic growth, we have to consider the stimulating effect these actions have had as well, and keep that in mind as we set policy going forward.

Some in Washington, DC might question why we would combine a panel discussion on taxes and regulations. But I can promise you that it does not seem like an odd combination of topics to any business owner. The burdens imposed by both taxes and regulations feel very similar to the country's most modestly sized powerhouses of job creation. Both high taxes and excess regulations are a drag on their companies and a drag on our overall economy.

Economics tells us that anything you tax, you get less of.  That's why high marginal taxes on investment and innovation are a bad idea--they kill jobs. And regulations implemented in a costly and burdensome manner act just like a tax--lowering our nation's productive capacity and costing jobs.

This Administration appreciates that government must wield the power of taxation and regulation very carefully because of the economic headwind they can produce. We know that when we are able to lighten the burden of taxes and regulations, our economy begins to soar.

Much of what we will discuss in this forum today is truly historic. This is an exciting moment for the country because we are embarking on something that Americans in every tax bracket have dreamed of for decades: reform of our tax code. Reform that will make the code simpler. More fair. A new code that will promote strong economic growth – growth that produces jobs and prosperity for our citizens.

The code is too complicated, and it needs to be overhauled. Ronald Reagan referred to it as a "daily mugging." Indeed, a complicated code robs citizens and business owners of precious resources: namely, their time and money. And it also allows too many people to find loopholes, which undermines our system of voluntary compliance.

Fundamental tax reform is a top priority of President Bush's second term in office. This administration is committed to the task, and we will get it done.

The President set out some very sound guidelines during his campaign, and I'd like us to keep them in mind today. His goals are to make the code simpler and to increase long-run economic growth and job creation. He believes taxes should be applied fairly, and that reform should recognize the importance of homeownership and charity in our American society.

We have a lot of work to do today, and over the coming four years; so let's get started.