High U.S. Corporate Tax Rate Will Drive More Firms Away

High U.S. Corporate Tax Rate Will Drive More Firms Away————————
A commentary
By J. F. Kelly, Jr.

News flash: Miami-based Burger King, an American fast food icon, is merging with Canada’s Tim Horton’s, the coffee and doughnut chain. This may result in a new happy meal consisting of a Big Whopper, fries, coffee and a doughnut. The merger is referred to as an inversion. The American company is the larger company but will relocate its headquarters to Canada because of Canada’s lower corporate tax rate.

The White House is not pleased. Shareholders of both companies appear to be, however, with stock values rising, at least initially. High-roller investor Warren Buffett, darling of the Democratic fund-raisers and outspoken advocate for wealthy firms and individuals paying their fair share of taxes, turned out to be a whopper of a flip-flopper by providing about a quarter of the financing through his Berkshire Hathaway, Inc. firm. Hey, business is business. Do as I say, not as I do.

So another big American firm is driven abroad by our average state-federal corporate tax rate of 40%, highest in the world. Canada’s combined rate is about 26%. Tax-and spend liberals are outraged, using terms like “corporate deserter” and “Benedict Arnold corporations”. They think such firms are downright unpatriotic and some are urging boycotts. They believe firms should be happy to pay their fair share of taxes. By fair, of course, they mean whatever Washington decides is fair.

At some point, however, businesses will cut and run for greener tax pastures if they are able. Brazil’s 3G Capitol, which owns Burger King, is able. Similarly many firms are re-locating from high-tax states like California to more business-friendly states like Texas. The former are invariably Democratic-governed; the latter, usually Republican. Clearly, Democrats don’t get it. High taxes are bad for business. What’s bad for business is generally bad for jobs and the economy. This isn’t rocket science. It’s Economics 101.

With regard to the call for boycotts, they seldom work, often backfire resulting in increased business (recall the Chick-a-fil boycott) and sometimes punish innocent business owners and employees. Burger King, like Tim Horton’s, is primarily a franchiser, not an operator or owner of restaurants. Why boycott a locally-owned small business?

The biggest whopper of all is the notion, promoted by tax-and spend liberals, that corporations are greedy monsters, caring only about profit and unwilling to pay their fair share of taxes. The primary reason why entrepreneurs risk their savings or incur debt to found a business is to make money. Otherwise, they won’t exist for long. The managers of a publically held corporation have a fiduciary responsibility to act in the best interest of the owners, i.e., the shareholders, not the government or the party in power, or the social cause du jour. If that makes them greedy, what would you call the politicians who cling to power, constantly seek campaign funds and push for ever-higher taxes in pursuit of bigger government?

The quest for higher taxes will continue as long as the welfare state in America is permitted to grow, until we finally kill the goose that laid the golden egg. With Medicare, Medicaid and Social Security growing ever closer to insolvency and the full costs of Obamacare still looming, the pressure will continue making the U.S. less competitive in the global economy.

To keep the businesses we have and attract the new ones needed to provide jobs for the growing population we need tax reform, starting with reducing the corporate tax rate. That isn’t going to happen, of course, until we get a Republican-controlled Senate with enough votes to overcome an Obama veto. But this is far from assured.

There are now too many people who are net recipients of government largess. They, of course, tend to favor the status quo. They also tend to believe that corporations are greedy cows to be milked dry. As George Bernard Shaw reportedly observed, when you rob Peter to pay Paul you can always count on the support of Paul. You can also count on his vote. But sooner or later, Peter will get tired of paying and look for greener pastures.

August 27, 2014

Prioritizing the Threats

Prioritizing the Threats—————————-

A commentary

By J. F. Kelly, Jr.

Given the limits on its resources and span of control, the Obama Administration might be well advised to re-prioritize its threats and focus on the most serious of them during its final years in office. That would be the threat of terrorist attacks directed against us at home or abroad. Yet much attention and State Department hand-wringing seems focused on Dmitri Putin’s revanchist intentions in Eastern Ukraine, which pose no existential threat to the United States.

If Europe is overly-concerned or feels threatened by this activity in its backyard, let them deal with it. If President Obama wishes to help, he might consider encouraging our own energy exports to Europe so that they will be less dependent on Russia’s. Start by getting the Keystone pipeline built. That, of course, would anger his Green supporters, but hey, presidents sometimes have to act as commanders-in-chief s instead of politicians and fundraisers

On the other hand, if the Islamic State (IS), formerly known as the Islamic State in Iraq and al-Sham (ISIS) or the Islamic State of Iraq and the Levant (ISIL), or whatever, is allowed to acquire more territory, wealth and recruits from around the world, the terrorist threat against the U.S. and the West will grow exponentially. Already it controls a swath of territory in Syria and Iraq about as big as Jordan, which along with Lebanon, is in its sights. Their captured territory contains substantial amounts of oil which, along with ransom money and aid from supporters in other Arab countries which purport to be our allies, finances its terror campaign of slaughtering Christians and other infidels. It also contains important cities like Mosul and Tikrit.

The IS forces are well-trained and equipped with some of the finest weaponry U.S. taxpayers can buy, having captured it from fleeing, U.S.-trained Iraqi soldiers. They are dedicated to establishing a fundamentalist Islamic caliphate across the Middle East ruled by Sharia law from which they intend to eliminate Christians, Jews and other infidels by forcing them to convert or be executed. That alone should cause the world’s only superpower and nominal leader of the West, founded on Christian values including freedom of religion, to act to stop this horror, but there’s more. Their leaders, including Abu Bakr al-Baghdadi, have made it chillingly clear that they intend to soon confront America.

The land they have conquered includes ancient lands between the Tigris and Euphrates Rivers, referred to by historians as the cradle of civilization. It borders Kurdistan which is threatened as, indeed, is Baghdad itself. Iraq will never be the same country without this territory which it has little hope of regaining without U.S. help, but then Iraq was always more of a collection of warring and bickering tribes than a nation. Mr. Obama’s earlier instance that this was primarily Iraq’s battle and that U.S. assistance would be conditioned on Iraq forming a unity government demonstrated just how out of touch this administration is with reality. Iraq will likely never have a unity government and any hoped-for coalition of the willing to fight the IS will be unlikely without U.S. leadership, participation and total commitment to victory. There’s no sign of that in Washington.

U.S. airstrikes have slowed IS progress and thus far averted at least one disaster by helping Kurdish and Iraqi forces recapture the Mosul Dam but limited, surgical airs strikes alone will not defeat the IS. Its forces consist of fanatical barbarians who behead and crucify people for their religious beliefs and enslave women. They are so violent and barbaric that even terrorist organizations like al Qaeda have parted company with them—at least for now. The civilized western world cannot allow them to continue to wage this religious war.

Americans, including the president himself, seemed deeply shocked at the images of American journalist James Foley about to be beheaded by an IS executioner. The shock is somewhat late in coming since beheadings and other atrocities have been going on for months, invoking condemnation but little else. Barack Obama had hoped to be finally rid of Iraq and still insists there will be no American boots on the ground in a combat role. This begs the question of just how he plans to stop the IS. If America does not lead, don’t expect anyone else to. And stop it we must or they will eventually, probably sooner than later, come after us.

This cannot be done by diplomacy. You cannot negotiate with fanatical terrorists. Mr. Obama cannot punt this away for the rest of his term as commander-in-chief.

August 23, 2014

Another Rush to Judgment

Another Rush to Judgment——————–
a commentary
By J. F. Kelly, Jr.

Not many people outside of Missouri likely ever heard of Ferguson until the small city outside of St Louis made national and even international news over the shooting by a white policeman of an unarmed black teenager. More precisely, perhaps, it was the ensuing protests on public streets that erupted into rioting, looting and vandalism that drew teams of reporters and photographers to the mostly black city to record the chaos that many likened to war scenes.

The small town police force, dressed and equipped like military forces engaged in urban combat, soon proved unequal to the task of restoring order and public safety, so the governor ordered in state troopers, led by a black captain who, though cheered by the demonstrators as he expressed shame for what happened, still had to resort to tear gas to get the crowd to obey police orders to disperse when things got out of control again. These forces also proving ineffective, Democratic Governor Jay Nixon then called in the Missouri National Guard.

President Obama weighed in as he has before on local law enforcement matters, urging calm, decrying violence on either side and expressing the usual platitudes about the need to heal which went unheeded. He voiced concern about the use of National Guard troops, stressing that this was a local and not a federal decision but that he would be monitoring their use anyway to ensure they weren’t used inappropriately. Presumably, that would be to actually enforce the law which National Guard troops are able to do when authorized by a state governor in the interest of public safety.

Every day, dozens of young black men are murdered in American cities as a result of drug and gang violence with nary a peep from the president. The difference there, of course, is that these are black on black crimes and it isn’t politically correct to blame blacks for them. These crimes scarcely provoke a headline, let alone a demonstration with full press coverage and mobilization of the protest industry led by the Revs. Jesse Jackson and Al Sharpton. These things are reserved for white on black incidents.

Those of us who lived through the 1960s race riots are particularly depressed to see how little has actually been learned from them. While there were many victims of these riots, it was the African-Americans who suffered most from the destruction of neighborhoods and businesses. Most of the young hoodlums who burned, looted and threw rocks and fire bombs at police in Ferguson were not even alive during the 1960s riots to learn the bitter lesson that violence solves nothing and just makes matters infinitely worse by further damaging race relations.

Demonstrators could be heard chanting , “The only good cop is a dead cop.” Can they even imagine what things would be like if they got their wish and there were no policeman? There were also chants demanding the death of the policeman who shot the teenager. The veneer of civilization is thin indeed on the streets of Ferguson.

As of this writing, there is still confusion and contradictory accounts as to exactly what happened and it is an exercise in futility to recount the various versions of what took place until these accounts can be reliably verified and the investigation is further along. What is truly sad, beside the death of a human being, is that too many people will believe what they want to believe, regardless of how the facts unfold. To many people, the simple fact that a young, unarmed black man is dead at the hands of a white cop is enough to convict. And for the many whose views are informed mostly by TV images, chants and mobs screaming for justice or, more accurately, revenge, there is the usual rush to judgment. But in our system, justice is not determined by mobs and justice cannot be rushed. That would deny justice to those accused by the mobs. And before justice can be administered, there must first be peace.

Peace will eventually come again to the streets of Ferguson but the scars and the damage to race relations will remain. So will the essence of the underlying problem which is not mistreatment of blacks by police, some of which undoubtedly occurs, but rather the breakdown of the family unit in the African-American communities resulting in families without live-in fathers to model acceptable adult behavior and respect for authority.

August 18, 2014

Anti-Semitism: An Ugly Reality——————————
A commentary
By J. F. Kelly, Jr.

One of the cheapest devices resorted to in attempting to promote a cause is to accuse the other side of ethnic or racial discrimination unless, of course, the facts clearly substantiate the claim. But it is used so often by advocates and activists for various causes that it is often just ignored like the boy who cried “Wolf!” too often. It shouldn’t be. Its overuse does a great disservice to those who actually do suffer from discrimination and persecution, plenty of which is, sadly, present in the world today.

Judging from the number and tone of anti-Israel demonstrations, particularly in Europe but also elsewhere, anti-Semitism is on the rise again. The catalyst for the latest outbreak is the Israel-Hamas war. The tenor of many of these demonstrations and the ugly slogans used reveal rather clearly that the sentiments of many of the participants go far beyond just sympathy for innocent Gazans caught up in the violence and criticism of Israel for the number of civilian casualties incurred. They reveal thinly-disguised anti-Semitism and in many cases, there is no effort to disguise it at all, including in, of all places, Germany which still bears the scars and shame of having been home to a regime that murdered millions of Jews.

Synagogues, Jewish-owned businesses and individual Jews have been attacked in Germany and anti-Israel demonstrations have turned violent in France, the Netherlands, Belgium, Sweden and other European nations with sizable Muslim minorities. To their credit, all of these governments have denounced the violence and attempted to control the demonstrations but with mixed success and the number of episodes of hate speech and violence directed against Jews appears to be rising.

Here in the United States, mainstream media and government criticism of Israel’s latest response to rocket attacks and terrorist tunnels from Gaza, has been unduly harsh, largely blaming Israel rather than the Hamas aggression for the casualties in Gaza. The media are flooded with pathetic images of suffering Palestinian women and children, interspersed with the occasional picture of a slightly damaged Israeli building or Israeli children playing games in well-appointed bomb shelters. The lop-sided casualty figures are repeatedly emphasized, reinforcing the notion that the Israeli response was disproportionate. What would a “proportionate” response be when you are trying to protect your people from daily indiscriminate rocket attacks intended to kill and terrorize civilians?

Anti-Israeli sentiment seems part of the culture at the United Nations with regular criticism of the Israeli “occupation forces” in Palestine and frequent, though typically toothless, resolutions condemning the Jewish state. Our membership in and support of this feckless and bloated bureaucracy continues to be an embarrassment.

Anti-Israeli sentiment is also widespread at many of our American universities, both public and private. It is fed by liberal professors who have made the plight of the Palestinians their pet cause and by impressionable young students engaged in the ritual search for a cause to vent about. Our foreign policy also has contributed to this anti-Israeli sentiment by its tepid support for our ally, diluted even further by the administration’s regular condemnation of Israel for the large number of civilian casualties which, as it full-well knows, are inevitable when Hamas uses civilians as human shields.

It is difficult, therefore, to escape the conclusion that all the anti-Israeli rhetoric contains an element of anti-Semitism. It is more than just a minor element in Europe where Jews were nearly eliminated during WW II. It is becoming blatantly obvious and governments there are not doing enough to contain it for fear of agitating their Muslim minorities.

There are only about 13.5 Jews in the world, less than a quarter of 1% of the world’s population. Almost all of them live in the U.S. and Israel with only about 1.5 million still residing in Europe where they are a vulnerable minority. Several Islamist terrorist organizations are dedicated to, not just the destruction of Israel, but to the death of Jews and some also to the death of Christians and other “non-believers”. The United States, with almost half of the world’s Jewish population, cannot turn a deaf ear to the rise of anti-Semitism. Racial hatred and persecution is a threat to everyone.

August 9, 2014

Clueless in Washington

Clueless in Washington————————-
A commentary
By J. F. Kelly, Jr.

The architects of foreign policy in Washington have become a national disgrace. Many pundits have recited the litany of foreign policy disasters including Benghazi, Syria, Iran, Iraq and previous rounds of the so-called Israeli-Palestinian peace process but the recent performance of John Kerry, my former Navy shipmate from Vietnam days is almost too much to bear. By practically demanding that Israel unilaterally stop the bloodshed in Gaza, he has alienated our strongest ally in the region and revealed for all to see this administration’s inability to acknowledge the moral gulf between Israel and Hamas.

The Obama Administration is determined to find moral equivalency between the two sides in order to pander to our Arab allies and does not wish to be distracted by the facts. The facts are these:
1. Israel unilaterally withdrew from Gaza, dismantling its settlements but leaving its orchards, greenhouses and other infrastructure, allowing the Gazans to govern themselves.
2. The Gazans destroyed the orchards, greenhouses and all other Jewish built infrastructure and elected a terrorist organization, Hamas, to govern them.
3. Hamas smuggled arms including rockets and mortars into Gaza for use against Israel and cement to build tunnels into Israel and then complained that they were being blockaded.
4. Gaza fired thousands of rockets and mortar shells indiscriminately into Israel designed to kill civilians and built dozens of tunnels into Israel for the purpose of killing Jews or taking them hostage.
5. Israel finally retaliated after showing far more restraint than we would have or have in the past; that is, back when we had real leaders like the Roosevelts and Harry Truman.
6. At least three truces were violated when Hamas resumed rocket attacks and several cease fire offers proposed by Egypt and accepted by Israel were rejected by Hamas.
7. Hamas stored rockets and other armament in or near schools, mosques and other public places, intentionally incurring civilian casualties to inflame world opinion against Israel. Much of the world fell for it.
8. The leader of Hamas, safely ensconced among his patrons and financial supporters in Qatar, states that Hamas will never tolerate the existence of a Jewish state in the Middle East.

Still this administration looks for moral equivalency while paying lip service to Israel’s right to defend itself. It seems incapable or unwilling to weigh the relative merits of each side and by its clumsy attempts at negotiating peace effectively elevates a terrorist organization to the status of a sovereign nation like Israel. It is incapable of coming down firmly on the side of an ally who is responding to an attack constituting an act of war.

Mr. Kerry says this issue is complicated and difficult. Not really. It does involve taking a stand for the good guys, something neither he nor his boss nor his colleagues at Foggy Bottom are very good at. Israel is fighting a war against terrorism. It’s really the West’s war, also. If Israel were to fall, who might be next?

Mr. Kerry virtually demands that Israel stop the killing unilaterally. He sarcastically derides Israel’s measured response. Surely he knows full well that this war could end immediately if Hamas would renounce terrorism, stop firing rockets and building tunnels into Israel and recognize, even grudgingly and without affection, the right of Israel to simply exist as a Jewish state. Until this happens, Israel has no reason to cease hostilities until Hamas is disarmed and the tunnels destroyed. Otherwise Israel will be unable to live in peace except for brief respites between wars which is no way to live. We wouldn’t live like that although with this president, I suppose anything is possible.

Kerry’s sole focus appears to be to achieve an immediate end to the bloodshed in Gaza. That‘s an appropriate sentiment for, say, Pope Francis but not for the Secretary of State of the world’s most powerful nation and Israel’s only real ally. He must take a longer view. Lasting peace and a permanent end to the bloodshed requires the unconditional defeat of Hamas just as we have demanded nothing less than unconditional surrender after we were attacked at Pearl Harbor and elsewhere. No one lectured us when we firebombed German cities and dropped two atomic bombs on Japan causing horrendous and totally indiscriminate civilian casualties to facilitate the end of the war and reduce our own casualties.

Every compassionate person is heartbroken at the images of suffering Gazans paraded daily across our TV screens. Every compassionate person laments the death of innocent persons anywhere. Innocent persons would be the ones who don’t cheer whenever Hamas fires a rocket into Israel. They would be the ones who didn’t dance in the streets after 9/11. They would be the ones who didn’t elect a terrorist organization to rule them. They would be the ones who don’t teach their children to hate Jews and to aspire to be suicidal martyrs.

August 1, 2014