May 12, 2006
JS-4256

The Honorable John W. Snow
Prepared Remarks
U.S. Chamber of Commerce, Small Business Summit

But most of all I appreciate what the Chamber members, here in this room today, do to make the American economy the true envy of the world. Nothing is bigger in the American economy than small business. Individually, you may not be mentioned in the Wall Street Journal. You may not buy ad spots during the Superbowl. But together, you are the very engine of growth and job creation for the American economy. Your ability to create jobs and make your communities a better place to live and work is what I believe makes the American economy so strong and so resilient. An economy that has lots of small firms, and those who have grown into bigger ones, is like a diversified investment portfolio – it's more stable and stronger over the long-term.

You are also a group of people who knows first-hand how well the American economy is doing.  I imagine that you, like me, are baffled by the perspective of some in the national press or some prominent public officials who are openly calling now for tax increases on families, entrepreneurs, and those who invest to make America grow.

The American economy is seeing victory after victory, none more notable in recent times than yesterday's historic Congressional action to prevent such a tax increase, and extend the President's pro-growth and pro-family tax relief program.

Chairman Thomas, Chairman Grassley, Speaker Hastert, and Leader Frist are to be commended for their leadership in producing such good legislation. And the strong bipartisan votes in the House and the Senate speak to the growing realization that tax relief produces growth, jobs, higher living standards--and yes--is consistent with rising government revenues.  Rarely in public life do you ever see government policy produce such a clear, unambiguous success.  

I hear from small-business owners everywhere I go about the benefits of the increased section 179 expensing.  I've literally heard about it from small-business owners from Alaska to Florida, from Portland, Washington, to Portland, Maine.

So it defies logic to understand why anyone would think that higher taxes on business investment would help small business, or would produce 5.2 million new jobs, record homeownership, higher real wages, or unemployment lower than the average of the 60's, 70's, 80's, or 90's. 

Yet opponents of the Bush economic policies see and speak only dark clouds, half-empty glasses, and sour news. It's the opposite of "see no evil, hear no evil." They cover their ears and eyes to the bounty of good news, and speak upside-down to portray times worse than they are.

Yes, of course there are challenges. High gas prices are acting like a tax on American families and businesses I know they're hurting you, families and other small businesses all over the country. That's why the President has presented a four-part plan that includes making sure consumers and taxpayers are treated fairly at the pump, promoting greater fuel efficiency, boosting our oil and gasoline supplies, and investing aggressively in alternatives to gasoline, so we can eliminate the root cause of high gas prices by diversifying away from oil in the longer term.

As part of this, we need to take advantage of our own abundant natural resources, like clean coal, the resources of ANWR and wind power.

I know that, as small-business owners, you are also worried about, and struggling with, health-care costs. I encourage you to look into the cost-savings offered by Health Savings Accounts and I look forward to fighting with you to win Congressional approval of Association Health Plans – health plans for small business.

The economy is thus far proving strong enough to push through headwinds like high gas prices. That fact is clear when you look at the recent numbers: economic growth at 4.8 percent in the first quarter, the highest consumer confidence in nearly four years, durable goods orders the largest in ten months – the list goes on and on.

But those who seek higher taxes have their ears covered to these crystal-clear indicators. To ignore this good news and to make tax relief the villain, rather than the hero, takes quite a stretch from opponents of the President's economic policies.

Rather than their cry of "tax cuts for the wealthy," the benefits of these policies have been broad-based.  Over five million new jobs points to a broad-based recovery.  Do they actually think all those people are millionaires? Plummeting unemployment rates for Hispanic Americans, youth, and African Americans is broad-based.  More money in the pockets of everyone who pays income taxes--is broad-based.  And a tax code that is more progressive--with higher income Americans bearing a higher share of the tax load--is broad-based.

The disingenuous cries about deficits, from some the biggest spenders in Washington DC, also makes you wonder.  "Tax cuts deprive the government of billions" they pant. As if the government owned and produced, or is at least entitled to, your money.

But the pesky facts now show: with lower tax rates and higher growth, the federal government ran a monthly budget surplus of $118.85 billion last month, with tax receipts at all-time highs.  In fact, government receipts are now close to their historic average of about 18% of GDP.

So if there's a deficit problem, it's not because of the revenues--and it can only be because of the spending.  That's why it's so important that the President is holding the line on the supplemental spending bill now before Congress, and that he is pressing so hard to get the line-item veto.

My favorite line of the last week from one of our notable critics was the one that said:  We were able to do all that in the 90's, and we had higher taxes…

If that doesn't make my point, I don't know what does! Who would argue that prosperity with high taxes is better than prosperity with low taxes?

One thing I can say with a fair amount of certainty about these critics: they haven't started up or run a small business. They've never had to make payroll or find money to invest in expanding a business so it can create more goods, services and jobs.

How many small-business owners do you know who favor raising their taxes?

Economics, for small-business owners, is a way of life. You know how tax relief can turn things around when times are slow for your business.

You also know that just because the business owner's income is filed on a personal form (as so many small-business owners do), that doesn't mean you are "the rich." Because it's your business income, not your personal take-home income, that you're paying that high income-tax rate bill on – so high individual rates are tough on your business.

It isn't complicated math for you that when taxes are lower you get keep more of your own money to invest in your business. And that investment leads to business growth – which ultimately means you pay more in taxes. The more successful your business, the more you send to Uncle Sam.

That's why lower taxes and high tax revenue are entirely consistent. You write the checks to the government, and those checks get bigger when you have a good year. And thanks to the President's tax policies, we've seen the return of good years for small business.

Because I've met so many business owners, all over this country, who trace a turnaround in their business to the enactment of the President's tax cuts, I'm particularly honored to share this week's legislative tax victory lap with this group. You are the heart and soul as well as the backbone of the American economy and American society, and it is a privilege to work with and for you in the Bush Administration. Thanks again for having me here today; have a great meeting.