Radio Address to the Nation on Economic Growth
My fellow Americans:
Wednesday, in a ceremony on the South Lawn of the White House, I signed into
law the most sweeping reform of the tax code in our nation's history. That
moment was a victory for fairness that will, I'm convinced, usher in a new era
of growth and opportunity for
When this bill goes into effect, 80 percent of the American people will pay a top rate of only 15 percent or less in Federal income tax. No one will pay more than 28 percent of total income. A family of four living at the poverty level will have over $1,000 more in their pockets. In fact, millions of working poor will be dropped from the Federal income tax rolls altogether -- they won't have to pay a cent in Federal income tax. Now, that's what I call fair. As for families, at long last blessed relief. The standard deduction will increase sharply, and the personal exemption -- that's the amount of money you get to deduct for yourself and each one of your dependents -- will almost double, rising to $2,000 in 1989. I wasn't exaggerating when I said that this bill is at once the best antipoverty program, the best profamily measure, and the best jobs creation bill ever to come out of the U.S. Congress.
day I signed this bill we also heard some extremely good news about the
economy. Gross national product, the figure that measures our economy's growth,
showed a strong upswing in the third quarter, coming in at 2.4 percent. Sales
are up, with a sharp increase in durable goods purchases -- pointing to
increased production and more jobs in the future. And
Contrast this with the economic mess we inherited 5\1/2\ years ago. It's not for nothing those are called the days of malaise. Inflation then had skyrocketed up to 13 percent. Now it's holding at an incredible 1.8 percent. The prime rate had shot up to 21\1/2\ percent. Today we've cut it by two-thirds. When we came into office the top tax rate was 70 percent, and the middle class was paying tax rates that once were levied only on the very rich. Worse, inflation gave you an automatic tax hike every year and Congress more of your money to spend, without their having to stand up and vote for a tax hike. Well, the first thing we did was cut your taxes and index them so that wouldn't happen again. And with tax reform, that top rate of 70 has been chopped to only 28 percent of total income.
these achievements were hard fought, believe me. But it's a funny thing, some
of the same people who fought us every step of the way when we tried to cut
taxes and reform our tax code -- these same people are talking down the
American economy. Well, in one sense, I have to say they're right. There is a cloud
hanging over the American economy, and that's the possibility that the
tax-and-spend mentality will return to
that's why I'm talking to you, the American people. Your hard work turned
Until next week, thanks for listening, and God bless you.
Note: The President spoke at from the Oval Office at the White House.