Mr. Obama, we don't have a tax problem, we have a spending problem

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Published February 13, 2012

| FoxNews.com

Did you see President Obama's new 2013 budget? It's filled with $1.5 trillion in tax increases for the rich. 

It appears that the president and his leftist cabal believe we are all stupid. They believe if you tell enough lies, the lies become fact. They spend all day, every day, trying to convince Americans that taxes on the rich are too low. 

The reality is taxes are not low at all. If you think they are, you've either been brainwashed, or you aren't paying taxes. The truth is: The taxes are too damn high.

We do have a serious problem in this country. But it's not a tax problem. It is a spending problem. 

Our government is addicted to spending. It doesn’t matter what the tax rate is. It doesn’t matter how high the tax revenues. We could raise tax rates to 90% 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?

Government is a spending addict and needs rehab. If you don't believe me, look at Europe. 

Taxes are far higher than America, yet the countries of Europe are desperately broke. Bankrupt, Insolvent. Panic is setting in. Greece is burning. It may become the worst economic crisis in modern history. And it's all about big spending and high taxes.

Yet President Obama continues to claim in every speech that taxes on the rich are too low and we therefore desperately need to raise taxes. 

When a private sector CEO lies to investors, it’s called fraud. You can go to prison for manipulating the facts. Yet President Obama and his leftist cabal in Congress lie, omit and manipulate the facts about taxes every day.

Let’s examine the bold faced lies of Obama and the left, who try to justify tax increases on "the rich" on a daily basis:

First, Obama quotes the dollars earned by the top 1% of income earners to prove that “the rich” are making too much and being taxed too little. That’s sleight of hand. 

The president is lumping billionaires with yachts and private planes into the same boat with small business owners like myself. Within that top 1% are a few billionaire titans like Warren Buffett, hedge fund managers who earn $500 million per year, Wall Street tycoons who earn $100 million per year just in stock options, all mixed in with small business owners like me. 

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 who makes $250,000 to $500,000 per year by working 16 hours a day?

By courageously risking their own money, small business owners create over 70% of the new jobs in the U.S. economy. 

President Obama is comparing these individuals to billionaires who share the same tax bracket. Mr. Obama claims that everyone in the top 1% tax bracket is making too much, and paying too little in taxes. 

The president is playing a bait and switch shell game. Some might even go so far as to call that kind of manipulation tax fraud.

Second, Mr. Obama claims tax rates are currently among the lowest in history. Once again the president 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. So we are clearly being deceived. Again, some might call that tax fraud.

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% from decades ago might actually be lower than today's rates once you include these factors. 

As Ronald Reagan would say, “There you go misrepresenting, again, President 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%. But what Mr. Obama and his team 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 United States of America paid a penny at that rate in 1935: John D. Rockefeller. 

Mr. 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.

President Obama also purposely leaves out a very important fact -- that only in the last 30 years have we moved away from a cash economy. 

Tax rates at 70% or higher didn’t matter prior to 1980 because the whole country operated with an underground (cash) economy. Most small businesses earned unreported cash. 

Does anyone- including President Obama -- believe that restaurant owners, bar owners, or retailers paid huge taxes on their cash incomes 30 years ago? 

Today we have a computerized economy based on credit cards. Virtually every dollar that every business takes in is tracked and reported. Today, banks report to government all suspicious or big ticket deposits. Virtually every dollar in the U.S. economy is tracked and taxed. So the rate of taxes is immaterial -- all of us are paying far more in taxes than ever before. To not report that difference is deceptive. Some might call that tax fraud.

Finally, President Obama calls his desired tax increases "small" and "fair." In reality they are huge. 

If President Obama got his way federal income taxes would hit 40% or higher. And he'd take the cap off FICA taxes. And he'd dramatically reduce or eliminate mortgage, charitable and business deductions. And then just for fun, he'd add a national VAT tax. Now add in the new taxes for ObamaCare. Add it up. 

Americans would face tax rates approaching 70%. And this time there is no cash economy. The government would take 60 to 70 cents of every dollar we all make, while we do all the work. The mafia has nothing on the government!

So why is Obama playing fast and loose with the facts? Taxes aren't low and he knows it. And the increases he desires aren't small or fair, and he knows it.

Our 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. 

Second, Obama’s 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, stimulus, and green energy "investments" by government. 

Third, by targeting, demonizing and punishing small business owners and high-income earners (the people who make almost all the contributions to conservative causes and candidates), Mr. Obama can starve his political opposition. If taxes are higher on the rich, then the president's opposition has no money left to give to conservative candidates.

My hero Ronald Reagan's plan was to lower taxes on the rich, to motivate and encourage investment, entrepreneurship and job creation, while at the same time starving big government. 

Mr. Obama's plan is is the polar opposite: to raise taxes dramatically on the rich, so he can feed the beast of big government, and at the same time, starve his political opposition.

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." Visit his web site: www.ROOTforAmerica.com.

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