Amid 'Tea Parties,' President Vows to Simplify US Tax Code
President Obama promised to rewrite the "monstrous" U.S. tax code as protesters marked April 15 with demonstrations in hundreds of U.S. cities, including so-called "tea parties" to criticize Obama's tax policies.
In a televised speech at noon, Obama said he's renewing his administration's commitment to a simpler tax code, which he defined as one that rewards work and the pursuit of the American dream. Click here to watch Obama's speech
"For too long, we've seen taxes used as a wedge to scare people into supporting policies that increased the burden on working people instead of helping them live their dreams," Obama said. "That has to change, and that's the work that we've begun."
Obama used Tax Day, a source of dread and frustration due to the welter of confusing paperwork required, to underscore his efforts to cut taxes for many Americans in the midst of the worst economic crisis in decades.
"We have delivered real and tangible progress for the American people," Obama said. "I am proud to announce that my administration has lessened the tax burden on working families while also restoring some balance to the tax code."
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Meanwhile, protesters began gathering at state capitols and in neighborhoods and town squares across the country to kick off a series of tax-day protests designed to echo the rebellion of the Boston Tea Party.
A few hundred protesters, some dressed in Revolutionary War garb and carrying signs that say "End the Fed" and "D.C.: District of Communism," gathered on the Boston Common to protest government spending and taxes.
The demonstrations were being held everywhere from Kentucky, which just passed tax increases on cigarettes and alcohol, to South Carolina, where the governor has repeatedly criticized the federal stimulus package. Large protests also were expected in California, New York and Atlanta.
Organizers said they're steamed about government spending since President Barack Obama took office, most notably the $787 billion economic stimulus package Congress passed into law earlier this year.
In his speech, Obama noted that he's asked his economic advisers to thoroughly review how to simplify the tax code and report back to him by year's end.
"We need to simplify a monstrous tax code that is far too complicated for most Americans to understand, but just complicated enough for the insiders who know how to work the system," Obama said.
He added: "It will take time to undo the damage of years of carve-outs and loopholes. But I want every American to know that we will rewrite the tax code so that it puts your interests over any special interest. And we will make it quicker, easier, and less expensive for you to file a return, so that April 15 is not a date that is approached with dread each year."
He also reiterated a pledge to "stop giving tax breaks to companies that stash profits or ship jobs overseas so that we can invest in job creation at home."
Obama is pushing a record $3.5 trillion federal budget plan that Republicans and some Democrats say is loaded with too much spending. He defends it as vital to boosting the recession-battered economy.
"We know that tax relief must be joined with fiscal discipline," Obama told reporters as he met several families at the White House.
He also used the occasion to again tout the benefits—namely the tax cuts—that are a part of the $787 billion economic stimulus package. Included in that sweeping legislation was his signature two-year "Making Work Pay" tax break that the administration says affects 95 percent of working families.
But Republicans are using the occasion of tax protests to oppose Obama's huge stimulus package.
"Overtaxed families and small businesses have had enough," House Republican Leader John Boehner, R-Ohio, said in a press release. "They've had enough of Democrats forcing taxpayers to pick up the tab for more wasteful spending instead of working together to make the
tough fiscal decisions Americans are forced to make each and every day."
There also were signs Wednesday that some people were having second thoughts about how quickly the US economy may rebound from a recession.
The head of Wal-Mart Stores , the world's biggest retailer, said there remained a "lot of stress" in the economy and he did not anticipate a quick end to the recession.
"There's still a lot of stress," Wal-Mart CEO Mike Duke said on a taped interview on NBC's "Today Show." "It's not a 'V' recession, where we're just going to bounce out and come back."
Lawrence Lindsey, former National Economic Council director for President George W. Bush and now president and CEO of the Lindsey Group, told CNBC that signs of long-term economic growth are still a way off. (see video above)
Lindsey also predicted that the stock market will retest its lows and says there is no bottom in sight for commercial real estate prices.
The biggest issues facing the economy, according to Lindsey, are deficit spending and the huge debt that is going to be issued in the next six months, which he says will be between $1.25 and $1.75 trillion.
“Even when we have to do deficit spending, and I’m all for deficit spending, we should make sure we’re getting real bang for the buck," he added. "A lot of money that’s going out the door now is simply not providing bang for the buck either in the short-run or the long-run for the economy."
—AP and Reuters contributed to this report.