Tags: small | business | Obama | taxes

Lessons for Obama and Congress

Wednesday, 05 December 2012 03:48 PM Current | Bio | Archive

I am a small businessman. And the son and grandson of small businessmen. I’ve started, funded, and run several businesses that have created hundreds of jobs and pumped millions into the U.S. economy.

Small business owners are the economic engine of America. We create over 70 percent of new jobs. In the past four years under Obama we have stopped creating jobs. Why doesn’t someone ask us why? Most importantly, why doesn’t Congress take a lesson from us in how to run an economy and live within its means?

Warren Buffett is not typical of small business owners.
(Getty Images)
I’ll start with a simple example. I love swimming and am blessed to have a pool at my home. I earned that pool. I sacrificed — risked my own money — worked 16 hour days over many years to buy a home with a swimming pool.

I resent Obama and Congress punishing me by raising taxes on the so-called “rich.” Most of the top 2 percent are not billionaires. To lump us in with billionaires is pure fraud. We are small business owners who sacrificed and risked for years, creating jobs and caring for our families and communities.

Punishing the people who drive the U.S. economy is just plain stupid. It will backfire and cause a total collapse of the economy.

Back to that swimming pool. I bought the home knowing the IRS allowed (actually encouraged) the mortgage interest deduction. Without that deduction I neither could, nor would, have bought it. If Obama and Congress take away my mortgage interest deduction, I may lose my home with that swimming pool that I love (and worked for, for 20 years).

This is going to happen to upscale homeowners all over America. What right does government have to take away a legal deduction that has been in place since before I was born — a deduction around which my family finances were planned for the past 30 years? Small businessmen don’t break contracts. Our word is our bond. Why should government be allowed to break contracts?

At the very least, common sense dictates a dramatic change like this must be phased in over 10 years — to give homeowners time to sell their homes. Or the mortgage deduction could be eliminated for new home purchases. But, those who already depend on it must be protected.

Half (or more) of America's homeowners are under water. Many are seniors. This would push them over the edge. Why would homeowners keep paying their mortgage, if they are under water AND the mortgage is no longer tax deductible? The answer is they won’t.

Obama keeps saying "the rich can afford higher taxes." Well Warren Buffett can, but 95 percent of the "Top 2 percent" are small business owners who cannot afford any tax increase. Our incomes are down, our businesses in crisis.

We need our money to keep our businesses afloat during this once-in-a-lifetime economic tsunami. Any increase in taxes could cost us our businesses or homes. The result of either higher taxes or elimination of our mortgage interest deduction will be a new economic collapse.

Foreclosures will rise dramatically, real estate will decline (again) — this time led by upscale neighborhoods, and a new bank crisis will ensue. More great thinking from the economically ignorant members of Congress.

Let’s get back to my swimming pool. I swim daily in the summer, but I always stop around Oct. 1st. Why? Because heating my pool would cost several hundred dollars a month — a bill I can’t afford.

So even though I crave a daily swim, I don’t swim most of the year, because I can’t afford it. I have other bills to pay that are more important.

Why can’t government live by the same rules? If America can’t afford it, stop spending. Eliminate programs. Eliminate cabinet positions. Cut spending across the board — including defense spending. Cut government employees. If you won’t cut, sacrifice, or be responsible, how can you ask small business to pay more? We're tapped out.

Obama and Democrats lie when they claim “the rich” can "afford" to pay more taxes. Sure, Warren Buffett and Obama’s jet setter billionaire contributors can. But most of the "Top 2 percent" make $250,000 to $500,000 per year, and that's after years of sacrifice and risk-taking with our own money.

Some years, like the last four under Obama, we've made little, or nothing at all. You can raise our taxes, but we have no more to give. You'll be killing jobs.

The proof is in England. They tried the same scam. They created a special millionaire's tax. Since it was enacted, two thirds of all the millionaires are gone. So they’ve either left England, or stopped working so hard. Result: tax revenues plunged and the economy got worse.

Obama’s billionaire golf buddies don’t care about income tax rates because their income doesn’t matter. They already have $100 million in the bank. Like me, most small business owners live on their income.

Anything extra is invested in stocks, real estate, starting up new businesses (which creates most new jobs), or keeping our business alive in an economic crisis. Take away the small amount left at the end of each year and the U.S. economy suffers.

It's a fact that the top 1 percent account for 33 percent of all consumer spending in the U.S. economy. If you take money away from us, we have less to spend. The result? Consumer spending collapses. Retailers go bust.

Stockbrokers, lawyers, and realtors join the unemployment line. Construction comes to a halt. Car salesmen sit in empty showrooms. Autoworkers lose their jobs. Factories close.

Raising taxes on small business owners is killing the golden goose. Only an ivory league academic or a totally economically ignorant politician would think the idea of raising taxes on small business owners is anything other than just plain stupid. Ask the UK. They learned their lesson. They are already undoing their millionaire's tax and reducing taxes.

The common sense answer of a small businessman is to cut government spending. America doesn’t have a tax problem, it has a spending problem. Government is a spending addict. You need rehab. Small business can’t pay more. We just don’t have it. Anyone, including Obama who claims otherwise is either ignorant, or a liar.

But hey, prove me wrong. Like England, you'll find out the hard way. And if you really want to make Warren Buffett happy . . . and all those fat cats who voted for Obama in eight of the ten richest counties in America . . . then raise taxes dramatically on the Warren Buffetts and Jeffrey Immelts of the world — start your tax increases at $5 million per year, and $10 million, and $20 million, and take taxes way up for anyone who makes over $100 million per year.

Aim it right at billionaires like Warren Buffett. Let's see them put their money where their mouths are.

But get your hands off the wallets of small business.

Wayne Allyn Root is a Capitalist Evangelist, entrepreneur, and Tea Party Libertarian Republican. He is a former Libertarian vice presidential nominee. He is the best-selling author of "The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gold & Tax Cuts." Read more reports from Wayne Allyn Root — Click Here Now.

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I am a small businessman. And the son and grandson of small businessmen. I’ve started, funded, and run several businesses that have created hundreds of jobs and pumped millions into the U.S. economy.
Wednesday, 05 December 2012 03:48 PM
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