Canton Respository

2-08-01

Timken supports Bush tax-cut plan 

By PAUL M. KRAWZAK
Copley Washington correspondent

WASHINGTON — President Bush’s proposed $1.6 trillion,
10-year income tax cut will help prevent the nation from sliding into
a serious recession while spurring economic growth in the long run,
Timken Co. Chairman W.R. “Tim” Timken Jr. said Wednesday.

Timken, who is chairman of the National Association of Manufacturers, endorsed the plan after he and other business leaders emerged from a meeting with Bush at the White House.

“The president’s tax reduction plan is a terrific beginning for the long-term effort to foster higher growth and greater productivity throughout the economy,’’ he said.

Bush is expected to formally unveil his tax plan today. Critics have said the plan could be too costly and favors the rich.

Speaking for the manufacturers association, Timken said the plan is “fiscally sound, growth-oriented and will enable individuals and companies alike to retain more of the money they earn for investment, saving or spending as they consider best.’’

While the tax cut primarily will benefit individual taxpayers, Timken said it also would be good for the Timken Co.

If Timken employees have more income to spend after paying taxes, “they will be less concerned with increasing their wages immediately,’’ he said. “If your wage costs are kept down, we can be more competitive worldwide. A tax on the people that work for Timken is indirectly a tax on the company,’’ he said.

A research and development tax credit in the plan also would help the company, he said. The credit already exists, but Bush’s plan would make it permanent.

Timken said he isn’t worried that the tax cut would increase the federal debt, as some believe the Reagan tax cuts in the 1980s did.

“If you look at the Reagan tax cuts, the total revenue flowing to the government actually went up as projected. The problem was that the Congress spent more than came in. That created the deficit,’’ he said.

Timken believes a tax cut will spur economic growth and produce more tax revenues to pay down the debt in the long run.