(Wayne Allyn Root) – We are not recovering from a recession. The spin, propaganda and wishful thinking from Obama, Congress and the Fed are wearing thin on the average American. Anyone with a brain and common sense can see that we are not recovering at all.
Even the voters of Massachusetts realize things are bad and Obama’s plan isn’t working. There may be a recovery at GE, Haliburton and ExxonMobil (because of the legal bribery given to big business called stimulus and bailouts)- but not on Main Street where all the jobs are created.
Obama is about to present his State of the Union. But he doesn’t have a clue about the true “state of the union” for small business owners.
I am a small businessman. My friends are almost all small business owners. We all believe that Obama’s prescription for saving the American economy is a disaster. His policies of tax and spend are killing jobs, destroying confidence, and wiping out small businesses by the tens of thousands per month. Without a recovery by small business, there can be no recovery for the U.S. economy.
Today I present a plan that can save small business…direct from the only small businessman-turned 2008 Vice Presidential nominee. I’m proud to call myself a REAGAN LIBERTARIAN. My hero Ronald Reagan understood small business. That is why he created the largest tax cut in U.S. history- a tax cut aimed squarely at small business. That one brilliant stroke of capitalist incentive ushered in the greatest economic expansion in world history, leading to 25 years of virtually uninterrupted economic success.
There is still time to save America. We can turn this modern day “Great Depression II” into the greatest economic turnaround in world history. Ronald Reagan proved that you can turnaround even an economic disaster quickly with a giant tax cut aimed at the most important people in any economy- SMALL BUSINESS OWNERS. These are the heroes of the business world. This simple, common sense 5-step plan to motivate small business goes even further than my hero Ronald Reagan. It is Reagan SQUARED. It is the Tea Party/Reagan Libertarian solution to saving the U.S. economy.
Step # 1: CREATE A ONE-YEAR NATIONAL INCOME TAX VACATION:
Liberals will scream that Obama already gave us a giant “tax cut.” But he gave it to the wrong group. It went to his voters- people who rarely pay any taxes in the first place. What a gigantic mistake. This plan aims the tax cut at the people who make all the difference in a capitalist society- the taxpayers. Can you imagine the audacity of that? Actually giving tax cuts to people who pay the taxes in the first place! My plan allows everyone in America who already pays taxes to keep 100% of their own income for one year.
Stand back and watch the economic explosion created when the taxpayers and small business owners spend it (helping retail sales), invest it (helping stocks and real estate), use it to pay down their mortgages (helping banks and ending the foreclosure crisis), and use it to start businesses in record numbers (creating jobs).
Obama will say, “How would we afford to run government without taxes?” Really? The cost of this income tax vacation is a measly $1.2 trillion. That question did not seem to bother Obama when he spent trillions on bailouts and wasted stimulus- all of which created zero jobs and did nothing to improve the economy (except reward his voters and contributors). So either shut up and try it, or simply find $1.2 trillion in spending cuts. The American economy is in freefall because government spends too much, NOT because taxpayers pay too little. Cut taxes so that taxpayers can keep more of their own money and I promise you that they will choose to multiply it. Simply put- they will put it to work. Entrepreneurs and small business owners and investors will create an economic boom that no amount of government spending can replicate.
STEP #2) ELIMINATE CAPITAL GAINS TAXES PERMANENTLY:
The key to the success of our economy is small business investment. Even Obama talks about this fact in his speeches. But we don’t need talk. We don’t need more hot air from politicians. We need action to avert an economic catastrophe. A temporary capital gains cut or elimination will not work. Small business owners and investors need security and certainty. There is only one way to spur small business investment and expansion in the middle of a depression- eliminating capital gains taxes permanently. What a synergistic combination- a one-year income tax vacation, combined with the elimination of capital gains taxes. The income tax vacation gives taxpayers $1.2 trillion in extra money in their pockets. The capital gains tax elimination motivates them to invest it in a way that will create jobs- exactly what we desperately need them to do.
The bonus is this step allows us to compete with our #1 competitor China- who has a zero capital gains tax. China understands how to motivate entrepreneurship and small business creation. If Obama raises capital gains taxes (as he plans in 2011), we lose the economic battle with China- PERIOD. China catapults past the USA forevermore.
Finally think of the biggest bonus of all. If there are no more taxes on capital gains (and investment income of all kinds) older Americans can afford a much higher quality of life in retirement. Anyone can now retire on HALF the amount of assets- because your interest, dividends and investments are now tax-free. Think of what older Americans would do with that extra money- fuel the economy, buy homes, buy stocks, travel (thereby enriching the tourist industry), dine out more often (thereby enriching the restaurant industry), and pay for their grandkids’ college educations. A capital gains tax elimination is good for jobs…good for stocks and real estate…good for small business…good for older Americans…and GREAT for the America economy.
STEP #3) CREATE A SMALL BUSINESS PAYROLL TAX VACATION FOR TWO YEARS:
Once again, this idea is a boon for small business. Employees and employers each pay half of payroll taxes. The employees are already getting a one-year income tax vacation. But here we give the business owner a payroll tax vacation- by suspending the employer’s half of the payroll tax for two years. That means for the next two years, it costs far less for any business owner to create a job. Without a penalty for every new employee hired by a business owner, there is now incentive to hire. This idea also frees up capital- every dollar saved by not having to pay half of each employees’ payroll taxes, can now be used to expand businesses, expand inventory, buy business supplies and equipment, advertise, market or promote. All of those actions create jobs. Money going to payroll taxes does not. This one idea- combined with the capital gains tax elimination- makes it a joy (instead of a burden) to own a small business again.
STEP #4) TURN IMMIGRATION FROM A DRAIN ON THE ECONOMY…INTO AN ECONOMIC BOOM:
Immigration could be the most important topic of America’s future. This great country was built by immigrants. Studies prove that immigrants actually fare financially better in this country than native-born Americans. Now, however, illegal immigrants are draining the American economy. They cost taxpayers billions in welfare, food stamps, free meals at school, English as second language programs, free education and healthcare (and eventually Social Security).
Let’s first secure the borders to dramatically reduce future illegal immigration. At the same time let’s enact the exciting and creative step of offering instant residency and an easy, quick path to citizenship for skilled, educated, and financially secure immigrants, which will help trigger a turnaround to small business and the American economy.
Specifically any immigrant who invests $250,000 into either a home, or a small business creating jobs in the United States, should be granted instant residency and a path to citizenship. Current programs are limited and so bureaucratically entwined as to be practically worthless. This plan is simple, loud and clear: bring money, skills, and resources to start businesses and create jobs and you will be instantly welcomed into the land of opportunity.
This step would instantly unleash the greatest period of immigration to America ever. But not just any immigrants. This plan promotes the right kind of immigration explosion. When these hungry, ambitious, educated, skilled, middle class immigrants move to America over the next 5 years they will buy millions of homes- thereby ending the housing and foreclosure crisis. Home prices would instantly rebound for every American homeowner. They will buy or start new businesses- thereby creating millions of new jobs. They will pay into the payroll tax system- thereby delaying the eventual bankruptcy of Social Security (which should be privatized with this new reprieve). They will put their money into U.S. banks- thereby ending the banking crisis. They will buy things- thereby increasing consumer spending and enriching small business. This is the instant fix we so desperately need to turnaround the U.S. economy. These new immigrants that my plan encourages to come to America will form the foundation of our future.
STEP #5) LEGALIZE AND TAX SIN TO FUND HEALTHCARE REFORM:
Yes, I’m a proud card-carrying Reagan fiscal conservative. But here’s where I showcase my true Libertarian bona fides. We have to stop being busybodies or nannies toward our neighbors. Let people do what they want to do- as long as it involves consenting adults, and doesn’t harm you. It’s called personal freedom.
We live this credo of economic and personal freedom in Nevada- my home state. We are the laboratory for the experiment- and we have proven it works. Taxes on gambling (and even legal prostitution) fund our state government- enabling us to have no income taxes, no business income taxes, no capital gains taxes, no death taxes, and the 16th lowest property taxes in America. You know what I call that? HEAVEN. The result- until this depression destroyed tourism, thereby effecting Nevada’s tourist economy more than most states, we featured the fastest growing population and fastest growing economy in all of America for the last 25 years. That’s one heck of a track record.
But interestingly, Las Vegas also leads the nation in churches per capita. What that proves is that allowing personal freedom does hurt citizens who choose not to indulge in sin. Ironically it helps law-abiding, church-going citizens lead a much better quality of life. The taxes that gamblers and other “sinners” pay in Nevada allow the rest of us to keep more of our own money and lead a better quality of life.
Studies prove that the legalization of marijuana and online gambling would generate almost $300 billion in new tax revenues. People gamble online and smoke pot every day. Daily our government wastes billions and ruins the lives of consenting adults by enforcing these ridiculous laws and bans on personal freedom. The only groups benefiting from this lunacy are big government, police, prisons, courts, lawyers, drug dealers and bookmakers. It’s time to legalize, regulate and tax sin (preferably on the state level), just as we already do with alcohol. That will produce almost $300 billion in new tax revenue that can be used to reduce taxes on small business; or fund healthcare reforms at the state level- without raising taxes one dime on the rest of us. In fact, if allocated wisely, it should allow us to be able to reduce other taxes.
This is a simple, common sense 5-step plan to quickly turnaround the U.S. economy and save capitalism. It turns economic Armageddon into economic boom. All it relies on is the idea that letting people keep more of their own money makes them happy, positive and confident…and motivates them to create more, invest more and risk more. That is how you restore and expand the American Dream for centuries to come. God Bless America.
(Wayne Allyn Root was the 2008 Libertarian Vice Presidential candidate. Please visit his web site at: ROOTforAmerica.com)