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Good evening my fellow citizens:
Peace around the world, and progress here at home, represent the hopes of all Americans. In the next 7 days the Congress will make crucial decisions in both areas. The United States Senate will vote on the treaty outlawing nuclear tests in the atmosphere. It is the first concrete limitation on the nuclear arms race since the bomb was invented. It enables all men and women, East and West, free and slave, now and in the future, to be free from radioactive fallout. It affords us all a small sign of hope that war can be averted; that the terrible destructive power of nuclear weapons can be abolished before they abolish us; that our children can inhabit a world in which freedom is secure, and the air is pure.
I have no doubt that the nuclear test ban treaty will be approved by the Senate, and by a margin large enough to show the world that the American people want a just peace.
The other crucial vote, which is in the House of Representatives, affects every individual and every business in the United States, and the taxes we pay to the Federal Government. No more important legislation will come before the Congress this year than the bill before the House next week to reduce Federal taxes. In fact, no more important domestic economic legislation has come before the Congress in some 15 years. It is urgently needed and I hope you will support it in the national interest.
The Federal income tax is one of those subjects about which we talk, about which we complain, but about which not very much is done. Perhaps we have heard too long about the certainty of "death and taxes." Perhaps other national and international issues now seem more pressing. Yet, the fact is that the high wartime and postwar tax rates we are now paying are no longer necessary. They are, in fact, harmful. These high rates do not leave enough money in private hands to keep this country's economy growing and healthy. They have helped to cause recessions in previous years, including 1958 and 1960, and unless they are reduced, they can cause recessions again.
The bill on which the House will vote next week is a sound bill and we need it for many reasons. First, a tax cut means more jobs for American workers; more after-tax money means more buying power for consumers and investors; and this means more production and the jobs our Nation needs. Merely to reduce unemployment to a more acceptable level in the next 21/2 years, we must create more than 10,000 new jobs every day. We cannot effectively attack the problem of teenage crime and delinquency as long as so many of our young people are out of work. We cannot effectively solve the problem of racial injustice as long as unemployment is high. We cannot tackle the problem of automation when we are losing 1 million jobs every year to machines.
Second, a tax cut means new protection against another tragic recession. I do not say that a recession is inevitable without a tax Cut, or impossible with one, but, excluding war years, we have had a recession on the average every 42 months since World War II, or every 44 months since World War I, and by next January it will be 44 months since the last recession began. Recessions mean high unemployment and high budget deficits. Of all kinds of waste, they are the worst. We need a tax cut to keep this present drive from running out of gas.
And third a tax cut means new markets for American business. American citizens will spend, as history shows us, an overwhelming percentage of the extra, after-tax dollars left in their pockets, and this spending will broaden markets for businessmen, put idle machines to work, and require new machines and new factories to be built. The multiplied effect of these new private consumption and investment expenditures released by the tax cut will create a new market right here at home nearly equal to the gross national product of Canada and Australia combined.
Fourth, a tax cut means higher family income and higher business profits and a balanced Federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education, and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the Federal Government will ultimately end up with more revenues.
Prosperity is the real way to balance our budget. Our tax rates are so high today that the growth of profits and pay checks in this country have been stunted. Our tax revenues have been depressed and our books for 7 out of the last 10 years have been in the red. By lowering tax rates, by increasing jobs and income, we can expand tax revenues and bring finally our budget into balance, and to assist further in this effort we have pledged an even tighter rein on Federal expenditures, limiting our outlays to those activities which are fully essential to the Nation. Spending will be controlled and our deficit will be reduced.
Fifth, and finally, a tax cut means new strength around the world for the American dollar and for freedom. A tax cut can help us balance our international accounts and end the outflow of gold by helping make the American economy more efficient and more productive and more competitive, by enabling our goods to compete with those who are developing foreign factories, and by making investment in America more attractive than investment abroad. And a tax cut will help us convince other countries of the advantages of freedom by helping to end the long-term poverty, of chronic unemployment and depressed areas which mark our country.
For all these reasons, this bill deserves your support. I do not say it will solve all of our economic problems; no single measure can do that. We need to advance on many other fronts, on education, in job retraining, in area redevelopment, in youth employment, and the rest, but this bill is the keystone of the arch.
Of course, it is always possible to find fault with any bill, to suggest delays or to attach reservations. It is always possible for someone to say, "I am for the tax cut if other conditions are met, or when certain changes have been made, or some other versions at some future tune," but if we are to make the most of what this bill has to offer in creating jobs, in fighting recession, and balancing our international payments, it must not be diluted by amendments or conditions. It must not be sent back to the House Ways and Means Committee. It must not be put off until next year.
This Nation needs a tax cut now, not a tax cut if and when, but a tax cut now, and for the future. This Nation needs a tax cut now that will benefit every family, every business, in every part of the Nation.
Some of you may not be fully aware of the problems of those who face unemployment. Most families are doing better than ever. Another recession or the pains of economic insecurity or deprivation may seem very far away tonight, but they are not so far away if you look around your neighborhood or this country of ours. If you live in a growing community or a prosperous neighborhood, see for yourself the conditions of those who cannot find work, those who live in depression. If your son is in high school or college, take a look at the plight of those who have dropped out and the millions of young people pouring into our labor markets. Seven million more young people will come into the labor market in the sixties than did in the fifties, and we have to find work for them. Your children will be aware of this when they go to find a job. Life looks rosy to those with highly trained skills that are in widespread demand, but we must not forget about the less trained and the less skilled who may not be in demand.
If we cannot create more jobs-and let me emphasize again, to get unemployment down to an acceptable level in the next 21/2 years we need 10 million new jobs-where are we going to find them? I think we can only find them if the economy of this country grows as it must, and that is why I propose this bill tonight.
If we permit unemployment to grow, if we move into another recession, then no worker can be sure of his job and no businessman can be sure of his future, and nobody can point to the United States as a vital, dynamic economy.
So I ask you to consider the hopes and fears of those out of work in your own community and in your country, whether they are very young or very old, Negro or white, in need of training or retraining. A tax cut will help them to find jobs. It will help everyone increase his income and it will help prevent the spread of unemployment.
There are, in fact, as many people out of work today, men and women in this country of ours, in a prosperous year, as there have been in some recession years. We are the only country, nearly, in the West which has such a large percentage of unemployed. We get properly excited about a labor dispute which idles thousands of workers, but our loss from excessive unemployment in recent years has been 20 times as great as our loss from strikes, and I say again in the next 21/2 years we need 10,000 new jobs every day for a total of 10 million jobs.
That is what this tax cut can help to give us. That is why this problem affects every citizen and that is why this bill provides, from top to bottom, across-the-board tax reduction on both personal and corporate income. Under this bill, every wage earner in the country will take home more money every week beginning January 1st. Every businessman will pay a lower tax rate. Low income families and small businessmen will get a special tax relief, and the unemployed worker who gets a new job will find his income going up many times.
Here is how it will work:
A factory earner with three dependents earning $90 a week will have his taxes reduced by a third. The typical American family, a father, mother, and two children, earning about $6,000 a year, now pays an annual tax of $600. This bill will cut that tax by 25 percent.
A salaried employee with a wife and two children who earns $8,000 a year will receive a tax cut of more than 20 percent that will enable him perhaps to pay the installments on a car or a dishwasher or some other necessary expense, thereby creating work for others.
These individual benefits, of course, are important, but the most important benefit goes to the Nation as a whole. As these typical families, and millions like them across our country, spend that extra money on dishwashers, or clothes, or a washing machine, or an encyclopedia, or a longer vacation trip, or a down payment on a new car or a new home, that is what makes jobs. The businesses which serve them need to hire more men and women. The men and women who are hired have more money to spend. The companies who sell these items have more incentive to invest, to improve, and to expand their operation. More young people out of school can find work an d the danger of recession then becomes less.
Recessions, as I have said, in this country have been too harmful and too frequent, and have become more so. Between the first and second postwar recession, we had 45 months of upturn. Between the second and third, 35 months. Between the third and fourth, 25 months. We have now had 31 months of steady upturn. I would like to see us skip a recession. I would like to see us release $11 billion of after-tax purchasing power into the private economy before another downturn can begin. That is why this bill is insurance for prosperity and insurance against recession.
Recessions are not inevitable. They have not occurred in Europe for 10 years, and I believe that some day in this country we can wipe them out. We already have the ability to reduce their frequency, their importance, and their duration, and this tax cut is the single most important weapon that we can now add.
The support in this country for a tax cut crosses political lines. It includes small businessmen, workers and farmers, economists, and educators. Very few are openly opposed, of course, to cutting taxes, but there are those who for one reason or another hope to delay this bill, or to attach ruinous amendments, or to water down its effects. They want to deny our country the full benefits of tax reduction because they say there is waste in Government. There may be, and we are working to get rid of it, but let us not forget the waste in 4 million unemployed men and women, with a prospect of still more unemployment if this bill does not pass.
There are those who talk about inflation when, in fact, prices have been steady, wholesale prices have been wholly steady for the last 5 years–a record unmatched in our history and unmatched in any other country–and when persistent slack in our economy threatens us far more with recession than with inflation. Those who are opposed talk about the Federal debt, when the actual burden of that debt on our economy is being steadily reduced. Since World War II, the national debt has gone up 11 percent while our national output has gone up nearly 300 percent in contrast to State and local government, which has risen nearly 400 percent–their debt–in the same period as opposed to the Federal Government's 11 percent.
Those who are opposed to this bill talk about skyrocketing Federal employment when, in fact, we have steadily reduced the number of Federal employees serving every 1000 people in this country. In fact, there are fewer Federal civilian employees today than there were 10 years ago. We have reduced waste and improved efficiency at the Pentagon and in the Post Office, in the farm programs, and in other agencies throughout the Government.
Section I of this bill, as Chairman Mills of the House Ways and Means Committee pointed out, makes clear that voting for this bill is a choice of tax reduction, instead of deliberate deficits, as the principal means of boosting the economy and finding jobs for our people. No wasteful, inefficient or unnecessary Government activity will be tolerated. We are pledged to a course of true fiscal responsibility, leading to a balanced budget in a balanced, full-employment economy.
My fellow citizens, this is a matter which affects our country and its future. We are talking about more jobs; we are talking about the future of our country, about its strength and growth and stability as the leader of the free world. We are talking about helping people, people who have been looking for work for a long time in Eastern Kentucky, in West Virginia and Pennsylvania, the steel towns of Ohio, Gary, Indiana, Southern Illinois, other parts of our country, some of our mill towns; we are talking about a tax cut in the pockets of our people that will help create jobs and income for everyone.
We are talking, as I said at the start, about one of the most important pieces of legislation to come before the Congress this year–the most important domestic economic measure to come before the Congress in 15 years. That bill could be weakened or deferred. It could be put off for another year. It could be cut down. It needs your support. This is not a question of party. It is a question of the growth of our country, of the jobs and security of our people. It is a question of whether our taxpayers and businessmen and workers will get the help they deserve.
As the Congress prepares next week to vote on this measure, I strongly urge you to support this bill for your family's sake and for your country's sake.
Thank you very much, and good night.