We have a serious problem in this country. It is not a tax problem. It is a spending problem. Government is addicted to spending.
It doesn’t matter what the tax rate is. It doesn’t matter how high the incoming tax revenues. We could raise tax rates to 90 percent and government would still spend $1.40 for every dollar it takes in.
So why are we blaming the victim (taxpayers) for the national debt?
Yet Obama claims we need to raise taxes. He is blaming the taxpayers for his spending and debt addiction. Shouldn’t that be considered a form of tax fraud?
Let’s examine what Obama and the left say to justify tax increases on "the rich" on a daily basis:
First, Obama quotes the dollars earned by the top 2 percent of income earners to prove that “the rich” are making too much and being taxed too little. That’s sleight of hand. Obama is lumping billionaires with yachts and private planes into the same boat with small business owners like myself.
Within that top 2 percent bracket is Bill Gates, Warren Buffett, Donald Trump, hedge fund managers who earn $500 million per year, Wall Street titans who earn $100 million per year, all mixed in with small business owners like myself.
How can you use billion-dollar stock gains, or $100 million hedge fund incomes, or $20 million Wall Street bonuses to justify raising taxes on a small businessman that makes $250,000 to $500,000 per year by working 16 hours a day?
By courageously risking their own money, small business owners create 80 percent of the new jobs in the U.S. economy. Obama is comparing these individuals to billionaires who share the same tax bracket, and whose incomes are made up primarily of stock gains and stock options (taxed at much lower rates).
Obama uses “the average” to make claims that everyone in the top 2 percent tax bracket is making too much, and paying too little in taxes. Obama is playing a shell game.
Second, Obama claims tax rates are currently among the lowest in history. He is purposely omitting the full picture. Separate from federal income tax rates, U.S. taxpayers now pay the highest FICA and Medicare tax rates ever; the highest state, local and property taxes ever; the highest sales taxes ever; and the second highest business income taxes in the industrialized world.
Add it all up, and small business owners like myself are overburdened like never before in history.
Third, Obama is comparing apples to oranges when he compares tax rates. Rates are lower today than in the past because many valuable tax deductions were eliminated. And we now face caps, phase-outs, and the dreaded alternative minimum tax. Therefore quoting higher rates is a distortion of the truth. A tax rate of 70 percent from decades ago might actually be lower than today's rates once you include these factors. As Ronald Reagan might say, “There you go misrepresenting again, Obama.”
Fourth, Obama constantly reports that tax rates were once much higher. Another distortion. It is true that FDR raised the top rate in 1935 to 79 percent. But what Obama doesn’t tell us is that it only applied to someone making the equivalent of $76,000,000 per year.
Only one man in the entire USA paid a penny at that rate in 1935 — John D. Rockefeller.
Obama wants much higher taxes for millions of small business owners making $250,000 and above. But he quotes "robber baron” rates to sell his bait and switch scheme. In the private sector you face civil or criminal charges for misleading investors like that.
Finally, Obama purposely leaves out the important fact that only in the last 30 years have we moved away from a cash economy. Tax rates at 70 percent or higher didn’t matter prior to 1980 because most small businesses earned unreported cash. Today we have a computerized economy based on credit cards.
Virtually every dollar that every business takes in is tracked and reported. So tax rates are immaterial — all of us are paying more in taxes than ever before. To not report that difference is deceptive.
The government is heavily in debt, and Obama needs to find targets of opportunity (i.e., victims) to pay the bills, so America doesn’t go bankrupt on his watch. His only chance at re-election is to redistribute billions of dollars to his voters and campaign contributors in the way of entitlements, welfare, food stamps, and stimulus. By targeting, demonizing, and punishing small business and high-income earners (the people who make almost all the contributions to conservative causes and candidates), he can starve his political opposition.
This is the Obama plan.
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