February 28, 2009

The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Re: The Economy

Dear President Obama:

I am, every day, in the trenches advising clients on business and personal financial matters. I am seeing firsthand the devastation current economic conditions are having on small businesses. I have, I believe, a much better understanding of the economy and the tax system than most, just as a soldier on the front line would have a better comprehension of the battle being waged. First, let me say that our economy is not driven by small business. Visualize a train. At the front of the train is the very powerful engine and behind it are two cabooses. Now think of the engine as large businesses, pulling along the two cabooses. The first caboose represents the small businesses that directly provide products and services to the large company engine. The second caboose represents the small businesses that provides products and services to the direct small businesses (first caboose). Right now the engine has stalled and it is affecting the two cabooses. I am seeing this firsthand.

Now picture Earth. Orbiting around Earth are dollar signs. These dollar signs represent capital. This capital is drawn, like a magnet is drawn to metal, to venues where the capital can best be invested. How do you get this capital, this money, into the United States? The solution is so simple everyone is missing it. By decreasing the US corporate income tax rate down to 15%, you will accomplish the following:

1.      Capital will be sucked into the U.S., like a vacuum cleaner sucks in dirt;

2.      Profitable U.S. businesses will have more capital to invest, as their effective tax rate will drop from its current 41% down to 20%;

3.      Jobs growth will increase dramatically, during your administration;

4.      Personal income tax revenues will increase, in line with the job growth;

5.      Corporate tax revenues will increase, as new capital floods the U.S. market and large U.S. based multinationals seek ways to repatriate foreign capital back into the U.S.

Don’t ask me for hard numbers on any of this. I am one man with an opinion. But my opinion and the logic behind it are sound. 

Sincerely,