The Daily Caller

The Daily Caller

A small businessman’s plea to Obama — you’re killing us

Photo of Wayne Allyn Root
Wayne Allyn Root
Author, The Ultimate Obama Survival Guide

I’ve started more than a dozen small businesses. I’ve paid payrolls, health insurance, payroll taxes, workers comp, and unemployment insurance for hundreds of employees.

Because of that, my employees were able to pay their mortgages, buy groceries, send their kids to college, and provide for their families. For one small business, I spent about $50 million on things like advertising, marketing, promotion, lawyers and accountants. That money enriched and employed thousands of others. And that’s just one small business. Think of the impact that thirty million small business owners have on the U.S. economy. No wonder we create 70% or more of America’s new jobs. Small business owners are a far more powerful economic force than Exxon, Microsoft, GE, or WalMart.

So why is Obama trying to tax us to death? Why do small business owners feel demonized and punished? Is it Obama’s goal to drive us out of business? Or is Obama simply inexperienced, incompetent and clueless about business and how it works?

Mug or rob me once? Maybe it’s ignorance or a mistake. Twice? It’s a pattern. But coming up with ways to rob me (Obama likes the word “redistribute”) and damage my businesses on a daily basis? It’s time to get the message. Whether by mistake or on purpose, Obama and the progressive left are damaging and destroying more small businesses by the day.

Let’s look at the facts.

For 30 years, I have been able to deduct mortgage interest from my taxable income. Obama wants to end that. How many so-called “wealthy” taxpayers (i.e. small business owners) would no longer be able to pay their mortgage? How many homes would go into foreclosure? What would happen to the housing market? Overnight every home in America would lose 40% of its already decimated value. How many small business owners earn a living off of real estate? How many millions of jobs would be lost? Does Obama sound like a president looking to create jobs?

For 30 years, FICA taxes have been based on earnings. The current cap is just over $100,000 per year. Obama wants to remove the cap, thereby hitting small business owners with the largest tax increase in history. Overnight a small business owner making $500,000 per year would see his or her FICA and Medicare taxes go from about $15,000 per year to $75,000, and that’s before federal or state income taxes. That’s a $60,000 per year tax increase for a small business owner. That would drive hundreds of thousands of small business owners out of business. It would force layoffs. It would lower consumer spending and kill more jobs.

For 30 years, I ran my business without the extra taxes to pay for Obamacare. Now we face new taxes on income, stock sales, home sales, even on tanning beds! Worse is the provision mandating we report annually to the IRS every vendor from whom we purchase more than $600 of goods and services during the year. The cost of complying with this Big Brother mandate is unfathomable and threatens to drown millions of small businesses in paperwork.

  • Scrap Iron

    Many of the points mentioned are about the tax structure.
    ALL of them would be moot if we (and our representatives) had the cajones to “fundamentally change” (don’t you LOVE that term?) the way we pay for government.
    Oh, yeah, I’m talking about the Fair Tax.
    Just pay taxes when you buy something.
    Keep everything you EARN.
    Since removing all embedded taxes would lower (on average) prices by 22%,under the Fair Tax, prices reamin about the same.
    And domestic goods, having more embedded taxes, would end up being cheaper that imported goods. Can you think of a BETTER way to encourage domestic manufacturing?
    Get the information at fairtax.org

  • loveofhumanity

    I agree with this article. It makes sense.

    But one part could use a little change in perspective….deducting mortgage interest on income tax returns.

    It seems most people don’t realize this has the effect of subsidizing mortgage companies and real estate prices. It creates artificial demand in the real estate market that drives up prices. Some businesses get preferential treatment from government, and the banking industry has been at the top of this list for over 90 years.

    If we were to eliminate tax deductions of mortgage interest, it would indeed be a painful adjustment, and there would indeed be an increase in foreclosures. But it would also remove a government-created market distortion.

    I’d like to see a flat tax and the complete removal of all of the piddley little taxes that soak up so many man hours. Some countries are understanding the value of this. I’ve heard Panama and Estonia are two. It certainly makes it a lot easier for business owners and investors to plan. The sheer complexity of our current system is a tax in and of itself (with no productivity or gov’t revenue to show for it).

    • canuckistani

      End the mortgage interest deduction, period. Subsidizes bad behavior and contributes to the false economy.
      Then move on to ending the SBA and HUBZone.
      Then move on to ending tax breaks for any company that laysoff and then hires overseas.
      Make all tax prep costs completely deductible…..