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.
For 30 years, most small business owners could raise capital without government permission. Obama and his socialist friends in Congress want to change that. Last year, Democratic Senator Chris Dodd tried to pass a financial reform bill that included a provision increasing the amount of money one would have to earn to be considered an “accredited investor.” That would reduce the angel investor pool by an estimated 70% and require most private businesses to get permission from the SEC to raise money. Do you know what an SEC lawyer costs? Raising capital for a start-up would suddenly cost an extra $250,000 in legal fees…and take months, or years, to wait in line for SEC approval. This would kill new business start-ups. Who could come up with this idea? Only a socialist (some like the word “progressive”) looking to redistribute the money from business owners to the entitlement junkies that support Obama; or perhaps a cabal of extortionist lawyers looking for government to mandate obscene new legal fees. Either way, it was a “friend of Obama.”
For 30 years, I ran my businesses without the White House being in partnership with the American Bar Association. Now Obama has found a way to encourage every lawsuit junkie and disgruntled employee to make up a story and sue their boss. Every caller to the White House alleging their boss has broken the law now gets assigned a lawyer willing to work for contingency (no fees up front). Say goodbye to American business…and goodbye to jobs.
Keep in mind that all those new taxes and regulations mentioned above are aimed at people who risk their own money to start businesses. Collectively we risk trillions. Our courage and capitalism fuels the economy and creates over 70% of new jobs. Our taxes pay for government and all those government employees with their obscene pensions. Running a business often requires working 16-hour days and is the hardest thing you’ll ever do. If our reward for all this risk, sacrifice and hard work is to be punished and demonized, why would we keep doing it?
Is this a purposeful plan to destroy capitalism? Or is Obama just the most inexperienced, incompetent man to ever occupy the White House? Is this all about Obama trying to redistribute our wealth? Is Obama a small man trying to punish small business owners for having the audacity to reject his plan to put Big Brother in charge of our lives and businesses? Or is Obama simply trying to starve his political opposition, because he understands that small business owners are the biggest contributors to conservative causes?
It doesn’t really matter whether any of this is intentional. All that matters is that small businesses are dying out here. Wall Street may be looking good. After all, Obama’s good friends (and large campaign contributors) at GE are reporting $14 billion in profits, with no taxes due. But on Main Street, it’s a killing field.
Wayne Allyn Root is a former Libertarian Vice Presidential nominee. He now serves as Chairman of the Libertarian National Congressional Committee. He is the best-selling author of “The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gold & Tax Cuts.” His web site: www.ROOTforAmerica.com.