The most simplistic approach to thinking about tax rates is this: if I bust my butt every day to earn enough money to house, feed, clothe, and generally care for family why should I be paying a much higher tax rate than a retired multi-millionaire couch potato clipping bond coupons and earning dividends? There are several answers to this question that dispel this thinking but there is also some truth to the accusation. Dividends are payments from corporations to shareholders – after-tax payments. In other words, corporations pay taxes on their income (presumably) and the remaining money can then be allocated to shareholders as a dividend. Taxing that dividend distribution amounts to double taxation and this is the basis for the argument to eliminate taxes on dividends or, at least, keep them at levels substantially below income tax rates. I support this view and think dividend income should be kept at current 15% levels. Unfortunately, this changes at the end of 2012 when dividends will revert to being taxed at regular income tax levels.

The other big income item for wealthy hedge fund managers and investors is capital gains taxes. These too are at 15% for long term holdings of greater than 1 year (the rate increases to 20% at the end of this year) and keep taxes down for the wealthy. This I find troubling and believe there is ample room for a more nuanced approach. From my perspective there is a HUGE difference between buying IBM stock and making money on the investment versus investing money in a budding company and making money if the company succeeds. Buying the stock of an established company on a listed stock exchange is hardly the same as providing vital capital for a new and growing company. I’d have no problem seeing the gains on the IBM stock trade taxed at regular income tax levels while the gains on venture capital investment are taxed at substantially lower levels (if not at zero). Of course introducing such a dramatic change in tax rates on listed stock capital gains would be an immediate disaster for the stock market so it would require a very long period of introduction – even 10-20 years of slow, deliberate rate hikes which would undoubtedly be changed by future Congress….such is our political system.

Hedge funds are generally created to trade actively, earn excessive gains, and provide investors with outsized returns. In general, they provide no marginal benefit to society, they create no new businesses, no new jobs, no anything except inordinate income for successful managers and investors. And yet both the managers and the investors get incredible tax breaks. The gains are very often long-term so the returns to investors are taxed at 15%. The managers, who invest nothing but get paid out a percentage of the profits generated by their investing prowess, also pay only 15% on their take of the profits. They get a tax break called “carried interest” that effectively says they are earning income based on risk-capital (even though it isn’t their capital at risk) so the income they receive should be taxed the same as the investors. This is sheer lunacy. That is income, pure and simple. It’s no different from the bonuses received by Wall Street traders and those bonuses are taxed as regular income. This is really a pet peeve of mine – drives me absolutely nuts.

The Democrats continual harping on the “fair share” language seems to be resonating with a lot of Americans. In poll after poll 70-75% of respondents support an increase in the tax rates of the wealthiest Americans – pretty easy to say “yeah, tax the rich guy more.” But that’s a resounding majority and I admit I’m surprised that few conservatives support the measure since “we the people” have clearly spoken in those polls. I’m equally surprised that there isn’t a greater hue and cry over the Dems chosen method of tax breaks to stimulate the economy – a “temporary” reduction in Social Security taxes. Of course it’s a clever method to choose since it’s extremely progressive (the rich get relatively little as a percentage of income and Warren Buffett gets nothing while his secretary gets her full share) but it does nothing for the elderly and unemployed and it leaves a growing hole in the Social Security fund that will need to be made up for later. Why not reduce SS taxes for only the lowest income earners and reduce tax rates .25% for low and middle income tax brackets. Too much class warfare there if we don’t do it for the rich too? I don’t think so – the rich aren’t stupid enough to make an issue about not sharing in a fractionally lower tax rate at a time when there is a potentially monumental tax rate increase in their future.

All the noise out there right now over “fair share”, class warfare, the 99%, and “we the people” strikes me as totally misplaced and directionless. They blunt the real argument — that Obama and Congress have failed by caving in to the demands of the loudest and most partisan elements of their parties. Obama failed miserably by ignoring Simpson-Bowles because it contained a few items that would offend some of his constituents. And then he failed to introduce any plan that would address meaningfully our deteriorating financial picture. The GOP failed miserably by fawning over Grover Norquist and drawing an ill-advised line in the sand against any and all tax increases. It’s sad that not a single GOP presidential candidate was willing to accept even a $1 tax increase for every $10 in spending cuts. Seriously? Conservatives wouldn’t accept a $500 billion tax increase combining higher rates on the wealthy and the elimination of tax disparities if it was accompanied by $5 trillion in spending cuts where the timing of both were well matched? How do we make progress when both sides have taken such strict positions?

There is some rumbling about introducing Simpson-Bowles as a bill in the Senate. It may pass a majority but either way it will go nowhere in the House. Still, it would be good to see a truly bipartisan plan get some airtime so the American people see who wants to act and who wants to play politics. Congress’ approval rating is in single digits and it’s time we saw who are the people’s representatives and who are the pure politicians…and then let’s throw the bums out.

As it stands right now, she is alert and seems to know much of what is going on around her, but her lungs simply do not work. The top part of her heart is not beating, only vibrating, and her brain is not telling her to breath as she should. There is every sign that her kidneys are slowing down, if not stopping altogether. Although the mistake by the hospital didn’t help her any, this is something we have known was coming. She will be 81 in February and she has been sick for a long time. She is not on a ventilator and we have no intentions of doing that. She does not want it and neither does the family.

The hardest part of this is not watching her lay there and slowly slip away. Who knows when it will happen? Only God knows that. No, the hardest part is watching my Dad sit by her bedside and grief for her. On February 4, they will have been married 66 years, and he knows he is losing her. His heart is breaking and so is ours. As I said, we knew this would be coming, but it makes it no easier.

Please keep us in your thoughts and prayers as we go through this time. I will try to keep you posted, but even though writing has been a therapy for me before, it escapes me now. The themes of news and politics, even with the campaign we are in, seem vastly underrated and unimportant at the moment. My heart simply isn’t into writing about such trivial things, compared to what we are facing.

Although I have thrown my lot in with Gary Johnson, I feel compelled to come to Ron Paul’s defense when it comes to his views of the Middle East. I am first and foremost committed to creating the best possible America for my son to live in, and that commitment supersedes any political candidate or party. This is a sensitive area, and it at the root of what The Southern Libertarian has dubbed “Paul Derangement Syndrome.” I love my country, and I hope readers will understand that I don’t feel I’m being un-patriotic by criticizing some elements of our foreign policy.

Many Republican politicians, pundits, and loyalists are aghast that Dr. Paul would suggest that we were in any way responsible for the horrible attacks of 9/11. Worse, they imply that he is anti-American, and Rick Santorum has gone so far as to call Dr. Paul “disgusting” and “dangerous.”

I’m sorry, Mr. Santorum, but I feel your profound ignorance makes you the dangerous candidate, and the one more likely to take us down a path that will lead to more American deaths from Islamic terrorism. Solely blaming Muslims—who undoubtedly deserve blame for committing barbaric acts of terrorism—without looking at our role, is to turn a blind eye to the realities of recent Middle Eastern history.

I am not an Islamic “expert,” but I know more about its history than the average bear. I took an Islamic history course in college, encountered it extensively in my two African history courses, have read the Qu’ran (twice), as well as several other books. Even without that background, however, a bit of internet research reveals to anyone that the origins of Islamic terrorism against the U.S. are rooted in our political interference in the region.

There are a couple of things to keep in mind when thinking about the Islamic world. First, politics is far more interwoven into Islam than Christianity or Judaism. Mohammed didn’t just found a religion; he started an empire, one that eventually became the largest in human history, extending from Spain to Indonesia.

Second, too many people lump the Islamic world into a single pile, when there are in fact religious and ethnic differences. The two main branches of Islam are Sunni and Shiite, a division that arose from a dispute over Mohammed’s successor. Similarly, there are ethnic differences. There are Afghans, Kurds, Persians (Iran), Arabs, and others. So it isn’t a surprise that the Shiite Persian regime in Iran views the Sunni Arab nations of Jordan and Saudi Arabia as enemies as much as Israel, in part because all three have close—you guessed it—political ties to the U.S. While Israel, Jordan, and Saudi Arabia may make strange bedfellows, they are joined by a common enemy—Iran.

With that brief backdrop, the roots of anti-American sentiment in the region date back to the early 1950s. England invaded Iran during World War II, and maintained a presence there afterward. Iran was a quasi-democracy at the time, and in 1952 Prime Minister Mohammad Mossadegh and the Iranian Parliament took steps to nationalize the Anglo-Iranian Oil Company, because the Iranians wanted to keep the oil profits for themselves.

The British naturally opposed the idea, and enlisted the help of the United States to get rid of Mossadegh. The CIA began working to destabilize the country under Truman in what was known as “Operation Ajax,” and Mossadegh was removed from power by the Shah in August of 1953 when the U.S. told him the U.S. would remove Mossadegh with or without the Shah’s cooperation.

So the first seeds of 9/11 were planted in 1953. (It takes a bountiful crop of hatred to give birth to an event as horrible as the destruction of the Trade Towers.) After the coup, the Shah became increasingly autocratic. Iran transformed from a relatively peaceful quasi-democracy to a brutal dictatorship, and the U.S. remained the Shah’s ally throughout. Thus, the 1979 uprising—including the hostage crisis—was more of a political event than a religious one. The Iranians hated the Shah, along with the Americans who devised the coup that made him the sole governing authority.

There certainly is an anti-Christian and anti-Jewish element to the mullah-led terrorism-supporting Iranian government. But, it was anti-American political sentiment that led to their rise to power, and our continued heavy-handed presence in the region keeps the anti-American political fire stoked.

For example, in the early 1980s Saddam Hussein decided to invade Iran. America supported Iran in the hopes that Saddam would overthrow the mullahs. The bloody eight year conflict ended in a tie, and heightened political resentment for the U.S. in Iran. If you lived in Iran, would you want to live in a country run by Saddam Hussein, especially when he had engaged in genocide against Shiites inside Iraq? From the perspective of many Iranians, the U.S. wanted to hand them over to a brutal dictator who would liklely slaughter many of them en masse.

Moving on, have you ever heard of Operation Cyclone? No?

In 1979 the Soviet Union invaded Afghanistan. The U.S. provided arms and aid to the militant Islamist Afghan Mujahedeen, because we wanted the Soviets out of Afghanistan as well. Some believe that al-Qadea’s founding member—Osama bin Laden—was among those who received weapons and training from the U.S. In the 1980s we called them “freedom fighters,” and we supplied them with weapons and training via Operation Cyclone.

The bottom line is that the radical Islamists fought to expel a foreign invader (the Soviet Union), much as they continue to fight our troops in Afghanistan today. Are there supporters of our presence there? Yes. Have we pushed for greater freedom than what Afghanistan had under the Taliban? Absolutely. But are there those in (and outside) Afghanistan who see us as an invading empire that must be repelled? You’re kidding yourself if you think otherwise.

After bin Laden founded al-Qaeda they fought along side the Taliban in the 1990s—along with troops of our “ally” Pakistan—to oust the Massoud regime of the Islamic State of Afghanistan. They were successful in capturing the capital in 1996 and establishing the Islamic Emirate of Afghanistan, but Massoud’s United Front continued to fight from areas of Afghanistan under its control

On September 9, 2011, Ahmed Shah Massoud was assassinated by two Arabic suicide attackers—a terrorist attack. Take a close look at that date. It was not a religious attack. It was not an anti-western attack. It was a political attack. And from my standpoint, what happened two days later also had a strong political element to it. And that is the key point that many miss—there is always a political component to Islamic terrorism; politics is built into the religion.

Now I wrote this last week, and I’m glad I held it back. Yesterday The Wall Street Journal published an editorial by Robert Satloff and Eric Trager yesterday on the evolving political climate in Egypt, which is trending towards Islamic fundamentalism. Consider this paragraph for a moment:

Others point out that if the U.S. has built close security relationships with most conservative Muslim countries such as Saudi Arabia and Qatar, then surely a Muslim Brotherhood-led Egypt can be friendly, too. But Egypt is very different. Its Islamist narrative is of fighting to survive against the iron fist of a corrupt, American-backed autocrat. Anti-Americanism—along with anti-Westernism and anti-Israelism—is deeply embedded in the DNA of Egyptian Islamist groups.

Notice that they don’t credit anti-American sentiment to disgust at our conspicuous consumerism or our Judeo-Christian heritage. Egyptians are anti-American because they lived for thirty years under a brutal, corrupt dictator who we supported, and they had to remove him at the cost of many Egyptian lives. If Egypt ends up with a fundamentalist regime that sponsors anti-American terrorism, it would be naïve to think that we didn’t contribute to that result.

Final Thoughts

Every intelligence analyst I have read or heard acknowledges that Islamic terrorism, at its root, is political terrorism. Yes, there is a religious component to it, but as I said earlier, religion and politics are more closely interwoven with Islam than other religions. That Ron Paul is willing to acknowledge the cold reality that our presence in the Middle East is at the core of Islamic terrorism against us, along with his belief that this reality should inform our foreign policy decisions. It is not an “extreme” position, and it certainly isn’t dangerous as some would suggest. Ignoring the political motivations of the terrorists is more dangerous, because when it comes to policy making, doo-doo in, doo-doo out.

It isn’t my purpose here to make specific foreign policy proposals. I certainly won’t suggest that reducing our presence in the Middle East will suddenly make the fundamentalists “like” us—that’s Obama’s naïve belief, not mine or Dr. Paul’s. I merely wanted to go through a brief history of Islamic terrorism. Perhaps you disagree, but I think the facts are pretty clear that our continued presence and interference in the region provides much of the motivation for attacks on U.S. interests.

This article is also published at The Country Thinker.

The President has to know his policies and his record are going to be hard to campaign on. That has to be why he is continuing the assault on the rich and you can be sure he will be aiming some of his comments at Mitt Romney. Thanks to Newt Gingrich and the incessant clamoring of the media, Romney will be releasing his tax records. His wealth, which is no big secret to start with, will be on display for the entire country to see. The amount of taxes he pays, large though it may be, will never be enough to satisfy the President and the rest of the liberal Democrats. Thanks again to Newt Gingrich for making this non-issue such a prominent part of the GOP campaign.

I don’t know about you, but I am more than a little tired of hearing how the wealthy need to pay their fair share. This mantra is repeated, time after time, to the point of making me nauseous. Never mind that the wealthy are already paying the lion’s share of taxes that are collected in the United States, they must pay more. As if making them pay more taxes is going to help the middle class or create more jobs for those who are unemployed. That will not work. It never has and never will.

Let’s face the facts. The President is going to find it very difficult to run on his economic policies and the record he has amassed since taking office. The only way to view his three years in office is as an abject failure. Therefore, he has to change the subject and talk about something, anything else. So, for as long as it takes for him to read through his speech tonight, those of you who choose to watch him and his teleprompter will be listening to how America isn’t fair and how he is going to change that for the better. He will take credit for standing up for the little guy and will blame the Republicans for protecting the rich. I don’t even have to watch his speech to tell you that.

If we are expecting the media to tell the real story of the Obama administration, think again. No doubt, they will have glowing accolades of how great his speech was. It will be up to the little guys in the media, people like you and me, to write the real truth of what his policies are doing to our country. It will be up to us to call him out and make sure the general public know what he is trying to do. We can not afford to give up the fight to put President Obama and his failed policies on display for all the world to see.

On the other side of the equation, in relation to his main opponent, Newt Gingrich, there have been some questions concerning his employment at Freddie Mac. Gingrich calls it consulting, but Romney and the other men in the race, Ron Paul and Rick Santorum, have called it lobbying. As a result, Romney is calling for the records of his employment at Freddie Mac to be released, as well as the paperwork surrounding the investigation into Gingrich’s ethics while he was in the House of Representatives. Considering the nature of the job Gingrich is seeking, I believe both requests to be valid. Newt Gingrich calls them bizarre. Go figure that one out. The Hill has the story.

Newt Gingrich blasted rival Mitt Romney’s call for him to release more records surrounding his consulting work for Freddie Mac and his ethics investigation in the House as “almost bizarre” the morning after his upset win in the South Carolina primary.

“Here’s a governor whose staff erased all their computers related to Romneycare… who refused to release his taxes,” Gringrich said on CNN’s State of the Union on Sunday. “You can see my taxes, they’re posted to Newt.org”

Gingrich went on to warn that the former Massachusetts governor was “starting a fight in an area where he isn’t necessarily going to prosper in.”

But Gingrich deflected questions about additional documents from his ethics investigation – alluded to by Minority Leader Nancy Pelosi, who served on the panel that investigated him. Gingrich had previously criticized Pelosi, arguing the release of those documents would violate the rules of the House, and said Sunday he would not release those documents himself.

From where I stand, this appears to be tactics as usual for Newt Gingrich. Again, compare the two requests. Romney, who has done nothing wrong, other than to be successful, is asked to reveal how much money he has made and how much he has paid in taxes.  Gingrich, who has so much personal and professional baggage, it makes one wonder how the man is able to keep his head above the political waves, is asked to reveal more about his consulting work at Freddie Mac, who was at the heart of the mortgage crisis. As well as the records about his ethics investigation. And Gingrich calls Romney’s request bizarre?

I am no fan of Mitt Romney and am supporting Ron Paul. However, Newt Gingrich is clearly working to deflect the charges against him by radicalizing the request for the release of his records. Most troubling to me is the fact that many voters are falling for his tactics. All because they believe he is better suited to take on Barack Obama in November. That is a mistake, in my opinion, and one that will likely cause us to lose the election.

Does anyone else remember how far-fetched a Gingrich candidacy sounded earlier in the primary season? I do and I really thought he was in the “found on the road dead” category. In fact, I thought that twice; once when his campaign staff resigned because they felt he wasn’t serious about his candidacy and once after he surged and then collapsed in Iowa and New Hampshire. It’s pretty clear that the man is not well liked in a lot of circles. Mike Elliot, from The Western Experience, mentions that in his own post on this subject. Also worth mentioning is Harrison’s, from Capitol Commentary, personal experience with Newt Gingrich. I hope he will chime in with his insight.

After South Carolina, what do we have to look forward to? From the almost certain nomination of Mitt Romney, we have three states and three winners. It remains to be seen if Rick Santorum can go forward with any degree of hope, but Ron Paul is almost certainly going to stick it out to the end. He is looking past Florida to some of the caucus states on Super Tuesday. We have went from a one-man race, with three other candidates nipping at Romney’s heels, to a two-man race, with Newt Gingrich having shown he can defeat the former governor of Massachusetts, and in handy fashion at that. Santorum did win Iowa, but it was by a very small margin and has not proven to be much of a help to his candidacy going forward.

In the comments of last Friday’s post, Harry, from ToBeRight asked me if I could bring myself to get behind a Gingrich candidacy. I answered him like this.

I honestly can’t answer that question, Harry. I had pretty much resigned myself to voting for Mitt Romney, if it came to that. Newt Gingrich is an entirely different story for me. I find it extremely difficult, almost impossible, to trust the man.

I am still unable to tell you what I will do, if Newt Gingrich wins the GOP nomination. It may come down to the theory that our devil is better than their devil and that may very well be true. If that is the case, and I decide to support Gingrich, after the nomination fight is over, it will be more of a case of trying to defeat our current President than supporting a someone whom I believe in. That doesn’t sit well with me and as I have said, I have yet to make that decision.

At the moment, Newt Gingrich is making the claim that not only can he defeat Mitt Romney, but that he is also the only candidate who can possibly defeat Barack Obama. It’s anyone’s guess as to if he is correct, but the voters of South Carolina evidently believe him. Otherwise, why would the social conservatives and Tea Party members vote overwhelmingly for someone who does not hold the same values, or believe in the same small government? That tells me that they are concerned only about one thing, namely the removal of Barack Obama from the White House. In spite of his personal and political baggage, the voters of South Carolina have resurrected the campaign of Newt Gingrich, once again.

Six House Democrats, led by Rep. Dennis Kucinich (D-Ohio), want to set up a “Reasonable Profits Board” to control gas profits.

The Democrats, worried about higher gas prices, want to set up a board that would apply a “windfall profit tax” as high as 100 percent on the sale of oil and gas, according to their legislation. The bill provides no specific guidance for how the board would determine what constitutes a reasonable profit.

The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and gas that ranges from 50 percent to 100 percent on all surplus earnings exceeding “a reasonable profit.” It would set up a Reasonable Profits Board made up of three presidential nominees that will serve three-year terms. Unlike other bills setting up advisory boards, the Reasonable Profits Board would not be made up of any nominees from Congress.

The bill would also seem to exclude industry representatives from the board, as it says members “shall have no financial interests in any of the businesses for which reasonable profits are determined by the Board.”

Is this anything less than the government trying to control what a particular company can make in profits? Does it not go against every foundation of capitalism? Is it anything less than the government saying shame on the oil and gas companies for being successful? I think not, but there are other areas of concern in this legislation. Consider what Dennis Kucinich has in mind for the funds.

Kucinich said these tax revenues would be used to fund alternative transportation programs when oil-and-gas prices spike.

“Gas prices continue to rise, creating a hardship for the American people,” he said. “At the same time, oil companies are making record profits gouging their customers. This bill would tax only the excess profits and create forward-thinking transportation alternatives.”

Specifically, he said the money would be used to fund a tax credit on the purchase of fuel-efficient cars and set up a grant program for mass transit programs when oil-and-gas prices are high.

Ah, the truth finds its way to the top. Remember how the liberals desire to push alternative energies? This legislation, and its Reasonable Profits Board, seems to be focused on doing that. Just as President Obama has nixed the Keystone Pipeline, at least for the time being, and as he has made the statements about driving coal companies out of business, this legislation would seek to force the same conclusion. Not content to allow the private sector to research, develop, and create those alternative energies, the liberals are focused on make them happen, even if they are not yet viable for public use.

Moving past the obvious concerns we should have about this type of legislation, let us look at the ramifications that would follow it down the road of more government control. Presently, the Gas Price Spike Act is focused on curtailing the profits of oil and gas companies. Let’s presume it passes. What happens then? What is to prevent someone like Michelle Obama, who is all about fatty foods and obesity, from working to pass legislation that would curtail the profits of the manufacturers of those fatty foods and passing them off to companies who manufacture foods that are more in line with her liberal way of thinking?

That may sound like an extreme example, but keep this in mind. More government control begets more government control. Since when have we seen a government entity do anything but grow beyond it’s intended use? I am not fond of crying wolf at everything the liberals attempt to do, but this has dangerous and stupid written all over it. If the Democrats were to succeed in their endeavors, the consequences would be dire for our country.

On the other side of the media spectrum, CNN is not projecting a winner and is currently showing Mitt Romney to be leading Newt Gingrich, albeit by a very slim margin. Strange things, these results from the media. Makes one wonder about the validity of it all. Stay tuned for updates as they become available.

UPDATE:  With 24% of the votes counted, Fox is showing Newt Gingrich with 40%, Mitt Romney with 27%, Rick Santorum with 17%, and Ron Paul with 13%. CNN 33% of the votes counted, with the same results. Gingrich is showing every indication of having won the South Carolina primary handily.

I normally do not rate debate performances of any of the candidates, simply because any rating I give would probably tend to be more subjective than objective. However, I will rate two clear instances during last night’s debate that I felt were significant. As much as I dislike Newt Gingrich, he won the debate. He did so with his blistering exchange with John King on the opening question. The minute he went off on King, I told my wife the debate was over. Please understand, I am not defending or supporting Gingrich and his apparent inability to stay faithful to his first two wives. What I am supporting is his answer to this gotcha question from John King, and to his answer to ABC for running the interview. He has every right to be angry when the elite media has refused to apply the same scrutiny to Barack Obama.

Now, on to Ron Paul and his exchange with John King and Rick Santorum on the subject of abortion. In a blatant attempt to exclude the only doctor, a OBGYN to be exact, from the conversation about abortion, King tried to skip over Dr. Paul and move to another line of questioning. As you can see in the video, that didn’t sit well with the crowd and he had to relent and allow Paul to answer the question. He had no choice. Personally, I think it was one of the best answers of the night, especially on the subject of abortion. I was unable to find a video of that exchange alone, so please fast forward to the 15:35 mark to get to the abortion question.

At the risk of sounding like I am trying to push Ron Paul on my readers, I think he owned that question. In spite of what Rick Santorum would like to believe, Ron Paul is pro-life, and in his answer, he clearly laid out how Roe v. Wade could be overturned by the states, instead of waiting to change it through the federal court system. For those of you who insist this is a federal and not a state issue, how is that working out for us? How many years have we been trying to get a court decision to overturn Roe v. Wade? Could it be that Dr. Paul is correct, that we should take another approach?

I have no idea how the dynamics of the race have changed or will change over the course of the past few days. Rick Perry’s sudden withdrawal, plus New Gingrich’s solid debate performances, are bound to have an effect on the outcome of the race. Ron Paul is moving up in the polls, although not as much as I would like to see, but I believe last night’s debate should have helped him. We will see what happens in the South Carolina primary on Saturday.