Bush promotes tax plan at SHRM headquarters - HR News

HR Magazine, March, 2003 by Steve Bates

President George W. Bush, in a nationally televised speech Feb. 12 at the Alexandria, Va., headquarters of the Society for Human Resource Management (SHRM), urged Congress to back his economic initiatives to get the economy rolling again.

Greeted by SHRM President and CEO Susan R. Meisinger, SPHR; Board Chair David B. Hutchins, SPHR, CEBS, CCP; and several other members of the Board of Directors, the president said he trusts the American people to spend their own money wisely and that Congress should extend and accelerate tax cuts it has already enacted.

"You've already seen the effects of what a tax relief plan can do. Just accelerate what you've already got on the books," Bush advised Congress. "Why wait?" he added. "Move it up.

The president thanked entrepreneur Charles Schwab for organizing a roundtable discussion on tax issues in the Schwab investment office in SHRM's Carlyle Building, where a small group of investors spoke with Bush privately about his plans.

Bush continued: "I also want to thank Susan Meisinger and David Hutchins, who run the Society for Human Resource Management. I fully recognize it's not easy to host a presidential entourage, but you did it."

Bush spoke about his $674 billion economic package that features elimination of the tax on corporate dividends paid to investors amid intense security measures in SHRM's Founder's Room--the first appearance by a U.S. president in SHRM's history.

"We tax corporate income profits, which is fine," he said. "Then it gets taxed again, and that doesn't make sense." Bush elicited applause when he declared: "Getting rid of the double dividend taxation is good economic policy for the short term for America. It is good economic policy for the long term for America, and I urge the Congress to eliminate the double taxation of dividends."

In addition, the Bush plan would accelerate U.S. income tax rate cuts, encourage small businesses to buy equipment and provide more aid to the unemployed. It would create special accounts for more than 1 million job-seekers that would give them up to $3,000 each to use for job training, child care and other expenses.

Bush also has proposed a massive reorganization of retirement and other savings accounts. He would replace 401(k), 402(b) and 457 plans with an Employer Retirement Savings Account that would be similar to a 401(k) plan but with fewer limitations on the amount of tax-sheltered contributions by highly compensated employees.

The economic package faces a tough sell, particularly in the Senate, because it could raise the federal budget deficit. But Bush is enthusiastic in pointing out the virtues of letting Americans keep more of their own money and sending less to Washington through taxes.

"It is an aggressive plan, no question about it," said the president. "But the principle of the plan says that we trust people in this administration. We trust the people to make wise investments; we trust the people with their own money."

The president made it clear that rebuilding the American economy is important to making the nation sound enough to deal with foreign issues such as the threat posed by Iraq: "We want our economy to be as strong as it can possibly be as we take on some of the greatest challenges which this country has ever faced."

"We were pleased to hear the president say that the people of our country are our greatest asset;' commented Hutchins. "We also enjoyed partnering with the Charles Schwab company in making this event happen."

"I am pleased that the president chose the SHRM headquarters as a venue to meet with constituents and hear their concerns regarding the economy;' said Meisinger after Bush's presentation.

A day before his visit, Meisinger sent a letter to the president saying SHRM "is supportive of several of your key initiatives in both your economic stimulus package and your retirement savings initiative," Specifically, Meisinger wrote that SHRM supports the president's proposals to permanently eliminate stock option taxation and to streamline and simplify the country's retirement benefits structure, as well as his re-employment package for displaced workers.

The initiative for the unemployed "will encourage displaced workers to take the first, but sometimes the most difficult, steps to finding gainful employment," wrote Meisinger. "SHRM also believes that the government should encourage the creation and growth of employer-sponsored programs by providing consistent tax incentives and simplified regulations that encourage employers to provide retirement benefits that would otherwise be sought from the government at greater cost to society."