Remarks by the President on Tax Cuts for the Middle Class
South Court Auditorium
12:00 P.M. EDT
THE PRESIDENT: Thank you, everybody. (Applause.) Good morning. Thank you. Thank you so much. Everybody, please have a seat. Have a seat. Well, it is great to see all of you, and I hope you guys are having a wonderful summer.
I am joined here today by moms and dads, husbands and wives, middle-class Americans who work hard every single day to provide for their families. And like most Americans, they work hard and they don’t ask for much. They do expect, however, that their hard work is going to pay off. They want to know that if they put in enough effort, if they are acting responsibly, then they can afford to pay the bills; that they can afford to own a home that they call their own; that they can afford to secure their retirement; and most of all, that they can afford to give their kids greater opportunity -- that their children and grandchildren can achieve things that they didn’t even imagine.
Every single decision that I make is focused on giving them that chance -- because if we want to keep moving this country forward, these are the folks who are going to get us there.
This morning, we learned that our businesses created 172,000 new jobs in the month of July. That means that we've now created 4.5 million new jobs over the last 29 months -- and 1.1 million new jobs so far this year. Those are our neighbors and family members finding work, and the security that comes with work.
But let’s acknowledge, we’ve still got too many folks out there who are looking for work. We’ve got more work to do on their behalf -- not only to reclaim all the jobs that were lost during the recession, but also to reclaim the kind of financial security that too many Americans have felt was slipping away from them for too long.
And we knew when I started in this job that this was going to take some time. We haven’t had to come back from an economic crisis this deep or this painful since the 1930s. But we also knew that if we were persistent, if we kept at it and kept working, that we’d gradually get to where we need to be.
Here’s the thing. We are not going to get there, we’re not going to get to where we need to be if we go back to the policies that helped to create this mess in the first place. And the last thing that we should be doing is asking middle-class families who are still struggling to recover from this recession to pay more in taxes.
Rebuilding a strong economy begins with rebuilding our middle class. And what we should do right now is give middle-class families and small business owners a guarantee that their taxes will not go up next year. When families have the security of knowing that their taxes won’t go up they’re more likely to spend, and more likely to grow the economy. When small business owners have certainty on taxes and can plan ahead they’re more likely to hire and create new jobs. And that benefits all of us.
And that’s why, last week, I was pleasantly surprised -- I was glad to see the Senate come together and extend tax cuts on the first $250,000 of every family’s income. That means 98 percent of Americans won’t see their income taxes go up next year. That means that 97 percent of small businesses wouldn’t see their income taxes go up next year. Not a single dime. That would be important.
And that’s why it’s so disappointing that, so far at least, House Republicans have refused to follow the Senate’s example and do the same thing. On Wednesday, they voted to hold these middle-class tax cuts hostage unless we also spend a trillion dollars over the next decade on tax breaks for the wealthiest 2 percent of Americans. In fact, it’s a little worse than that because their plan would actually raise taxes on 25 million hardworking American families by about $1,000 each.
So, at a time when too many working families are already struggling to make ends meet, they want to give millionaires and billionaires and folks like me tax cuts that we don’t need and that the country can’t afford, even if middle-class families have to pick up the tab for it. Those are their priorities.
And this week, we learned that there's some in the Republican Party who don’t want to stop there. An independent, non-partisan study found that one plan at least would give more tax cuts to millionaires and billionaires, and they’d pay for those tax cuts by raising taxes on the middle class -- an average tax hike of more than $2,000 for families with children.
Now, I just think we’ve got our priorities skewed if the notion is that we give tax breaks to folks who don't need them and, to help pay for that, we tax folks who are already struggling to get by. That's not how you grow an economy. You grow an economy from the middle out, and from the bottom up. And the kind of approach that the House Republicans are talking about is bad for our families and it’s bad for our economy.
The people standing behind me should not have to pay more just so the wealthiest Americans can pay less. That’s not just top-down economics, that's upside-down economics. (Laughter.)
Instead of the middle class paying more, we should ask the wealthiest Americans to pay a little more, a modest amount, so that we can reduce our deficit and still make investments in things like education that help our economy grow.
And keep in mind, we're talking about folks like me going back to the tax rates that existed under Bill Clinton. If you remember, that was when we created 23 million new jobs, we went from deficits to surplus, and folks at the top did well, too -- because when middle-class families have money in their pockets, they go out and buy that new car, or that new appliance, or that new computer for their kids, or they go out to a restaurant, or, heaven forbid, they take a vacation once in a while. And that money goes back into the economy, and businesses do well because they've got more customers.
And here's the thing -- there are a lot of well-to-do Americans, patriotic Americans, who understand this and are willing to do the right thing, willing to do their part to make this country strong.
So, for those of you who are keeping score at home, here’s where we stand. We might have a whole bunch of disagreements with folks in the other party on whether it’s a good idea to spend more money giving tax breaks to millionaires or billionaires. And frankly, that issue is probably not going to be resolved until after November. In the meantime, though, we say we all agree on extending tax cuts for middle-class families. The House says it agrees. The Senate has already shown that it agrees. And I certainly agree. So let’s at least work on what we agree on.
Let’s keep taxes low for 98 percent of Americans, and we can argue about the other 2 percent. Let's keep taxes low for the 97 percent of small business owners, and we can argue about the other 3 percent. If Congress sends me a clean bill extending the tax cuts on the first $250,000 of every family’s income, I will sign it right away. (Applause.) I will sign it right away.
There’s no reason to wait. There’s no reason to make families and small businesses anxious just so one party can score political points. Let’s go ahead and give them that guarantee now that their taxes won’t go up next year.
And keep in mind -- just one last point I want to make -- we're saying nobody's income taxes go up on the first $250,000 of their income. So even somebody who makes more than $250,000 is still getting a tax break on their first $250.000. Yuu understand? Even somebody who's worth $200 million -- on that first $250,000 they're still paying lower taxes.
It's the right thing to do. It's the smart thing to do. It would be good for the economy, and most importantly, it would be good for your families.
So we're going to have plenty to argue about in the next three months, and probably in the next five years. (Laughter.) This shouldn’t be one of those things we argue about. (Applause.)
Let’s do what the American people sent us here to do. Let's work on those things we can agree on; let's make progress; let's do right by the people behind me, and the millions of Americans that they represent. I’m going to be fighting every single day to make sure that you have opportunity. I expect, and I hope, that Congress will do the same.
So, thank you very much, everybody. God bless you. God bless America. And have a great weekend. (Applause.)
12:12 P.M. EDT