As Published Monday 2/22/10 at Newsmax.com
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By: 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. There may be a recovery for big business, due to stimulus and bailouts, but not Main Street, where the average worker and the small business owner live.
What we need is a 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. Without a recovery for the little guy, there can be no recovery for the U.S. economy.
So I propose 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. Ronald Reagan proved that you can turnaround even an economic disaster quickly with a giant tax cut aimed at the most important segment of any economy — small business owners. Here is my simple, common sense five-step plan to motivate small business:
Step 1: Create a one-year national income tax vacation. Liberals will scream that Obama already gave us a giant tax cut, but my plan aims the tax cut squarely at the people who make all the difference in a capitalist society: the taxpayers. My plan allows everyone in America who already pays taxes to keep 100 percent 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).
The cost of this income tax vacation is a measly $1.2 trillion. Obama spent trillions on bailouts and wasted stimulus, all of which created zero jobs and did nothing to improve the economy (it did reward his voters and contributors, however).
Step 2: Eliminate capital gains taxes permanently. The key to the success of our economy is small business investment. 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 — eliminate capital gains taxes permanently. The capital gains tax elimination would motivate people to invest in a way that will create jobs — exactly what we desperately need them to do. If there are no more taxes on capital gains (and investment income of all kinds) older Americans could afford a much higher quality of life in retirement. Anyone could retire on half the amount of assets because interest, dividends and investments would be tax free. Think of what older Americans would do with that extra money — fueling the economy.
Step 3 Create a small business payroll tax vacation for two years. Employees and employers each pay half of payroll taxes. Under my plan, we would 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, there would be 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, and buy business supplies and equipment. All of which create jobs.
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. 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, free education, and healthcare. Let’s first secure the borders to dramatically reduce future illegal immigration. At the same time let’s offer 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 should be granted instant residency and a path to citizenship. This plan is simple: bring money, skills, and resources to start businesses and create jobs and you will be instantly welcomed into the land of opportunity. When ambitious, educated, skilled, middle class immigrants move to America they will buy millions of homes, thereby ending the housing and foreclosure crisis. They will buy or start new businesses, thereby creating millions of new jobs. They will pay into the payroll tax system, and they will put their money into U.S. banks, thereby ending the banking crisis.
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 anyone. It’s called personal freedom.
Taxes on gambling (and even legal prostitution) fund Nevada’s state government, which enables no income taxes, no business income taxes, no capital gains taxes, no death taxes, and the 16th lowest property taxes in America.
Where’s the down side? 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. 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. Our government wastes billions enforcing ridiculous laws and bans on personal freedom.
This simple, common sense 5-step plan could quickly turnaround the U.S. economy and save capitalism. It’s time to restore the American Dream. God Bless America.