 We blew in, we'd ask you to join us for a dessert, and before we have dessert, may I ask that we just take a moment and in your own way pray for the leaven and hostages. Thank you very much. Had lunch on the plane, but knew I was going to have dessert here. Thank you very much. Members of the Chamber and distinguished guests, greetings from Morseville, Indiana. And I was sharing with you how much the wellspring of feelings and our confidence in your leadership, and we just love you, and I think you saw that coming into the community and here, and we just thank you for choosing and coming to Morseville. Ronald Reagan. Thank you very much. I assume by the location of the mic that I'm supposed to sit down for this, and I'm glad to do that. I just stopped by for a bite to eat. Since you're all here, I think I'll stay a while. I brought along a couple of people that you know very well, Congressman John Myers and Lieutenant Governor Mutz. Lieutenant Governor, there he is. Yes. You may have heard about our proposal to overhaul the tax code, make it fairer and simpler and more compassionate, and I wanted to bring the message directly to you in America's heartland. I've been traveling all over the country. The enthusiasm I must say for America's tax plan is overwhelming. I call it America's tax plan because it will take the load off the back of the long-suffering American taxpayer. It'll take the low-income wage earner and the retired elderly off the tax rolls entirely, and it'll remove the tax distortions that I think are holding the American economy back from reaching its full potential. This restaurant sums up our message in two words when they say, treat yourself. Our proposal makes the system fairer by closing loopholes and ensuring that all big businesses and individuals pay their fair share. We think we can lower the tax burden on everyone, and one of the best things about our tax proposal is the boost it'll give to America's main street. We're cutting tax rates for small and entrepreneurial businesses. We're cutting top rate on personal income tax to 35% on corporations from 46% to 33% while keeping the graduated scale for small corporations. The capital gains tax rate again will be cut this time to 17.5%. The objective is to create a small business renaissance in America and to make this decade the age of the entrepreneur. I read in the news that Bill Ciccio said one of the strengths of Moorsville is that people still believe in the work ethic here, and they emphasize the importance of family. Well, that's what America's tax plan is all about, too. It'll set our economy humming and be the best jobs creation bill we think that we've ever had. And second, it'll give families and wage earners some long overdue relief by increasing the standard deduction and practically doubling the personal exemption to $2,000. By lowering marginal rates, we'll allow the people to keep more of each extra dollar they earn. If you work overtime or get a raise or save some money and invest it, more of that extra income will end where it belongs in your cash registers and pockets and not in Uncle Sam's wallet. By removing low income earners from tax rolls that climb up the ladder of success I think will be easier for everyone. I'm excited about all the good things this plan will do for America. And if you're excited too, and if you all think that our plan is good for America, maybe you could let those people there in the back of the room know. Well, that's enough of a monologue from me. I think we're slated for something of a dialogue, and I'd like to hear what you feel about our plan. Thank you, Mr. President. This community is filled with a number of people who have, let me take the phrase, treated themselves. And let's take just a moment to hear from three of them. These are business people who, coming out of when President Reagan began, have treated themselves to the business that can be generated. And the first that I would like to introduce for just a few comments would be Ted Engelhardt from Lebeco and Lab Sonics here in Moorsville. Ted? Our company is an old company in Moorsville, and perhaps what's happened to us might be typical of what's happened to a lot of small companies in the last six or eight years. We design and manufacture precision test equipment for the automotive and aircraft industries. The aircraft business has held up pretty well, but the automotive business declined with the automotive recession, and it really never has come back. We've been looking for a complimentary product for many years, and in 1982 found one in an ultrasound breast scanner that was developed at the university. We knew we could make it. We didn't know how we would sell it. We started manufacturing in April of 1983, and we put together a new company, Lab Sonics, to market it and to do the development engineering to continue it. That and other ultrasound products. We've been very successful with it. It's worked out very well, very enthusiastic. We've got two new products in the mill now that we'll introduce in the next year or so. Further improvements in the breast scanner. We think this has been a great time for us, and we think your administration's helped a lot. We like the tax reform bill. We're particularly pleased with the decline in the prime rate yesterday. I think maybe that's a result of what you're doing, and we want to say this. We think you've done a fabulous job, not just in restructuring the economy, but in redirecting this country. We're so delighted to have you here. Thank you. Thank you. And another businessman of a company that just began three and a half years ago is Mr. Jim Reed, the President of Indiana Uniform. Jim, would you say a few words? Mr. President, Indiana Uniform is in the business of running and cleaning industrial uniforms. We began our business in my kitchen in 1981, about the same time that you took office. At that time, when we began, we were paying an interest rate of about 22 percent. The economy was in a recession, and things I was told by several people, this is certainly not the time to start a business. However, we dug in, and with the grace of God and a lot of hard work, we began to grow. As the economy started to take off, and I think primarily under-reconomics, so did our company. In the last three years, Indiana Uniform has grown 3,000 percent under-reconomics. This means about 30 new jobs in Morseville that before didn't exist. For that, our workers asked me to thank you, and we feel with your new tax program, Indiana Uniform, we hope we'll be able to add another 30 new jobs. So they wanted me to say to you, sir, thank you for your economic leadership. Thank you. And Bud Swisher from Kendrick's Hospital wanted to say a few words. He has done some creative things with the hospital. Mr. President, we appreciate you being here today to listen to our thoughts. We Kendrick Hospital are recognized by many as the leading colon and rectal surgery facility in the nation. Recently, we completed another complex at our hospital, which will include outpatient surgery facilities, double our medical staff, introduced fiber optic colon surgery, and have attracted to our hospital the International Academy of Proctology, all now here in Morseville. A key answer we believe to some of the problems in health care lies in pinpointing opportunities and then specializing in them. We know we can improve, for example, the delivery of reconstructive orthopedic surgery, that is total hip and knee joint replacement, all associated technology, and reduce all costs. Let me illustrate. We've attracted the commitment of surgeons, outstanding leaders in the field of reconstructive orthopedics, a joint venture with a biomedical orthopedic research, engineering, and manufacturing firm. A firm recognizes a leader last year by the Small Business Administration and the anticipation of major university graduate programs all through our hospital. We believe there are viable alternatives other than less personal care that could be enhanced through a more fair, less expensive, and simple approach to health care regulation. There are many ways to a new tax plan overhaul initiative. Anticipating health planning approval for our new specialization, we know that new jobs will result from Morseville and the state of Indiana, and that we will sustain momentum for other developments here in our community and at Kendrick Hospital. Five years ago, with interest rates at plus 20 percent, and the related uncertainties would not have enabled our projects to become realities, today with more stable economic conditions, our opportunities are enhanced. A couple of days ago, I was reviewing your tax reform proposal, and while I was unable to conclude the total effect upon my family and my business, one thing I know, its simplicity and fairness, together with the confidence I have in your administration, tells me that has to be a positive move for America. And we're excited about the future, and for that, Mr. President, we say thank you. Thank you. Thank you. Mr. President, I know that there are, within this group, there are a number of people just bursting and waiting to ask you questions. And if I could turn this over to you and let you please take over from now and ask questions and we await your answers. Well, all right. I would appreciate that very much and have that kind of dialogue. Well, yes. As a physician, many of my patients are older Americans, and they want me to ask you how your new tax plan was going to affect them as older Americans? Well, I think, first of all, that a great many elderly people will be at an income level and a retirement income level in which they won't pay any tax at all. They will benefit to the same extent that everyone else will with the reduced rates. For example, if you, today, there are people at the poverty level that find themselves paying an income tax. In ours, let's say a family of four, a husband and wife and two children, at $12,000, they won't pay any tax. And then it starts at a 15 percent bracket and goes to the 25 and finally the 35. I think that they will find that there are many provisions in this plan that will be of help to them. Certainly they will not be penalized in any way. My name is Bruce Moraine and my question is, does the proposed tax reform shift the tax burden from the individuals to the business or from mental incomes to higher incomes? No, as a matter of fact, it just about, I think, treats everyone squarely. The one thing that is being done in business, now we're lowering the rate on the corporations, but also we're taking away some so-called loopholes and some things that some businesses based in the nature of their business could take advantage of the present tax system to the point that even making a substantial profit, major corporations have not paid any tax at all because of some of the provisions of the present tax code. We're changing that. We think that everybody ought to share and pay a fair share. As I pointed out in the small corporations, some of your businesses have incorporated. Well, in those, the maximum tax, of course, is 33%. But for the smaller businesses, it will be graduated. It will be a progressive tax so that before you get to the 33% bracket, there will be a lower tax that will be beneficial there. Now most of you, however, in small business, pay in the personal income tax rate. So you will be benefiting also in that. And incidentally, while I'm here, let me, you said thanks to me, let me say thanks to you. Do you know that in the last two and a half years, we have created some 8 million new jobs in the United States? We have averaged for these two and a half years 300,000 people a month finding work and going to work in this country. And the bulk of those are produced by small business, not by the major corporations. That's why at the recent economic summit, I sat there kind of glowing inside as some of my colleagues, the prime ministers and the heads of state and presidents of the other European countries that are trading partners and allies were telling me that they believe the answer to some of their problems because they haven't created a new job in Europe in 10 years. They have the same number of jobs that they had 10 years ago. And they were telling me that they believe entrepreneurship is probably the answer to their their problem. I said, I thought it might be. My name is Tim Currens. My question to you is what effect do you believe the proposed tax plan will have on business growth and are there any built in incentives for business within the proposed tax plan? Yes, I believe the incentives that we have there are. The whole thing is aimed toward growth and encouraging growth. Part of that is the reduction again of the capital gains tax, which we found the capital gains tax is there's been some demagoguery around that there's a tax for rich people that can sell something for a profit and so forth. We found that with the two reductions in recent years, the one in 1978 in the rate of that tax and then the reduction that we made in 1981. In both instances, the revenue from capital gains for the government went up tremendously. 1977, or was it 1979, Don, I think it was 79. The pool of capital available risk capital for backing someone that once wanted to start a business you did was down to $39 million. By 1984, it was up to four and a half billion and we think that a large part of that had to do with the tax change on capital gains. Thanks, George. How do you see your tax program affecting interest rates on and the availability of money for single and multi-family development? Well, I think what the example I just gave I think is some of the answer to that. And I think it will as the interest rates, as you know yesterday, the prime came down to the lowest it has been since 1978, down to nine and a half percent. We think there are going to be further dips in that. We have some of our short-term government paper now that is out of an interest rate of under seven. And that also is the first, the lowest that it has been since 1978. Incidentally, in answering both yours and the other question too, I should have mentioned that I think that the very fact that we're going to be putting that the average individual is going to have more money in their pockets and take away from some of what they're giving to government is going to make them better customers for all of you and be a stimulant to business just in that way alone. Bill Cherry, Mr. President, Plainfield Chamber of Commerce. I'd like to ask you, besides the reduction in the number of tax brackets, how else what other parts of your plan are going to simplify the system for most of us? Wow. You know, I may turn my head here to Don Regan again. Hadn't met him. Don Regan was Secretary of the Treasury when this plan was being created and is now the Chief of Staff for me to try and go off the top of my head and bring up some of the other benefits. Now wait a minute, again, you asked. I think 16 or 18 tax brackets down to three. It's 14, 14 tax brackets. It's really down to four. There's one at zero. Yeah. In the simplifying of it, yes, I believe we have in return for these grants coming down, we have eliminated number of deductions and yet, for example, the deduction that has been taken and now will be eliminated of deducting local and state taxes from your income tax, we discovered that two thirds or more of the people in this country do not itemize. So they weren't getting that deduction anyway. And you only got that deduction when you got into the upper brackets. But we've also found out that as against the reduction in rates, everybody still gets a tax cut even without that deduction. We think it can be simplified to this extent. And Don, you just interrupt me if I miss something here. We believe we're going to try something else in this that will be optional with the people and the non-itemizers that a person, if they decide to, can provide to their employer what things they have like interest on a home mortgage and so forth. And then the employer will simply direct to the IRS in Washington instead of sending you the form that tells you how much salary you got. They will simply send that plus your other figures to Washington and you will receive direct from Washington without filling out any kind of a form. You will either receive a bill for tax if you owe some or you will receive the refund if out of your withholding you have a refund coming. You won't have to even fill out a sign a tax form. Just send in the check or get the check. And this we think, now as again as I say, that is optional. If someone mistrusts IRS and decides they want to take a look themselves, they're free to do that. The non-itemizers, of course, that will be very simple for them. We have left, even though a recommendation was made earlier that we should eliminate the deduction for charitable contributions. We believe that in this country which is so unique in all the world in volunteerism, this country supports many worthwhile cultural activities by private contribution like symphony orchestras and so forth that all the rest of the world put together. And we thought we don't want to discourage in any way something that is so typically American. It's believed there are some 95 million adult Americans today that are actually engaged in some kind of volunteer work, whether in their church or the community or the school board or whatever in this country. And we think that's a much greater force for good than even government. So we've left that. But the number of reductions or deductions that have been eliminated, the increasing of the personal exemption, almost doubling that, then almost doubling the, for each dependent, increasing the earned income tax credit, those things, and then pretty much it's just a simple go from there. Mr. President, we just have time for one short question. Well, the only people that we can see that will pay more taxes are those that presently are unfairly not paying their share. Those that have been taking advantage of so-called tax shelters and those I said for example at the major corporate level where they have found that they can earn a profit and escape paying any tax whatsoever. But I tried one because you know some people have been throwing around the fact that this favors the rich. You might be interested to know that only 3% of the earners in America will be in the 35% bracket, the top bracket. They will pay 14% of the total amount of tax revenue that the government receives. So it is not benefiting them and yet they too will get a reduction, the very fact that the more they earn, they get 65 cents out of every dollar. I remember back in those if days in Hollywood when I was only getting 10 cents out of every dollar and I said no to a lot of parts I'd like to play but I just wasn't about to work for a dime on the dollar. But the same is true of the middle class and I did a little some pen and ink work myself one day. I had some figures for a town in New Jersey where I was speaking that I'd used in there about someone at about a middle income range of $42,000 of income, family of four and what the tax would be for them. And I got very curious. So I multiplied by 10 on income to see about this benefiting the rich. And it is a progressive tax and that has been the tradition since the income tax started virtually of that you not only pay, you know, the Lord in the Bible says that tithing, the Lord shares a tenth and he says if he profits you 10 times as much, you give 10 times as much. Well under the income tax when you start computing Caesar share, with a progressive tax it doesn't come out that way, it isn't proportional. So I was very interested with my figures to take this family here and then take this one over here that earned 10 times as much and this one over here would be paying 30 times as much in tax as this middle class family here. So that worked out pretty well. Incidentally there's another feature too in helping here. You know that right now the IRAs, these independent retirement accounts where you can take $2,000 of your salary and put it in a bank account for retirement and you don't have to pay income tax on that $2,000. And this has been true for male employees, female employees. And then we come to the husband and wife team where the wife is a housekeeper and I think she's allowed about 250, isn't it? The man can take out 250 for her and so deposit 2,250. Well we happen to think that the housewife is very well employed and from now on they'll be able to take out $4,000 and put it aside. Well, I don't know if they're... Thank you very much Mr. President. We appreciate this community filled and bursting with volunteerism before you go I want to give you two gifts. And the first, Morseville is the home of the Indiana State Flag and Morseville goes back to 1824 and Paul Hadley designed this flag and we would like to give this to you. Well thank you very much. Thank you very much. On behalf of visiting Morseville as the home of the state flag. Well thank you. And secondly, this is a gift and I think probably I can probably begin by saying that on behalf of the 8 million new jobs, this is made by the 35 people that are new jobs created because of Indiana uniform, they wanted to give you a future which is a symbol of the industry and on the back we want to tell you about your tax plan. America's tax plan for the future. Go for it. Thank you. Thank you all very much. And I see I have a pin here that was also given to me. Is it your flag? Yes. Thank you. And before I get to that national convention there's Jay C's that I'm going to speak to now in Indianapolis. I think I'll put this on so that they'll know where we are. Thank you. Thank you. I thank you all very much. Are we supposed to just get on our way now? Yes, sir. Well this is a case of heat and hot. Are there two people for any progress since last night, people of this state, the rest of the country? Not since last night. No. There have been few of any changes. There have been some reports unconfirmed as yet about the, to the fact that something to do with how the hijackers got on the plane and we haven't been able to confirm those yet. We also know from one strange interview that was done this morning that was allowed by the hijackers that the answer to who is still on the plane is the crew. The three-member crew is still on the plane. And the captain was allowed to do an interview through the window of the pilot's window this morning. Does not be buried still in control of these people? Does he still have them? Yes, and we're doing, as I said last night, there are things I just can't talk about. We're doing everything we can to put the pressure on to bring those people home safely. Does the Red Cross have any role in an organization like that, have any role in something like this? Again, Sam, this is one that I just won't speak to and I can't speak to and any more than I would speak of others that could or could not be involved in the, in trying to help us in this. To the families of those here from your own state, I think we all are praying. That's all I've been praying ceaselessly for them and for their... Will you meet with those families, Mr. President? I don't know how we couldn't hear you, sir. What did you say? Your staff has turned out to like for some reason. Will you, we couldn't hear, will you be meeting with those families?