Just for Gretchen

So many questions and concerns it's nearly impossible to cover them all, but I've got a little bit of time to at least make an effort.  Just to put your mind at ease, you're only partly to blame for the previous post.  As I said, I've seen the "National Anthem" picture on several friends Facebook pages. I've also had it sent by e-mail and I've had several friends preach to me about it.  All of the stuff I see, hear and read goes into the brain and marinates for awhile.  Sometimes I'll get something I feel is worth writing (as opposed to something worth reading) and if I'm at my computer, I'll type it out and post it.

Now to try and take things in order.  I'm assuming you're referring to the late Ambassador Christopher Stevens, recently slain in an attack on the U.S. Embassy in Libya.  For the life of me, I can't figure out what issue there could possibly be, which has any bearing whatsoever on the upcoming election.  The United States maintains hundreds of embassies and consulates around the world.  I can't imagine how the President would have the time to set duty rotation schedules, manning and training priorities and security alert levels for each and every one of them.  Just as I don't think President Reagan had any knowledge that at one point during my time in the Navy I was working 36 hours out of every 48.  Is the issue over the conflicting reports following the attack?  Some said terrorist attack, some said spontaneous rioting.  In the world we live in today, the concept of national security is extremely muddled.  Anything that happens, anywhere in the world, the media feels should be reported and should be acknowledged and responded to by the President.  Unfortunately, in trying to be open, the President has often responded with a suspicion before any facts were available.  If he had instead said absolutely nothing, the press would have claimed that either he didn't know what was happening or that he didn't care.  The entire issue is one created by the media for the media and has no bearing on the upcoming election, in my opinion.

When it comes to the corporate tax rate, I'm somewhat at a loss.  My research turns up three basic types of sources.  The first type is the tax code itself, which is meaningless in any sort of general discussion, since each individual tax-paying entity is affected by any changes differently.  The second source is blatantly partisan, definitely conservative and consists mostly of highly inflammatory rhetoric and scare-tactics.  It's some kind of stew, but nobody can tell me what type of meat is in it.  The third source is also partisan, but it contains useful information.  The issue at hand is that effective January 1, 2013, the tax cuts enacted by President G.W. Bush will expire.  President Obama wants to extend those cuts with the exceptions of those earning over $200k ($250k for married).  For the past four years the Republican party has been insisting that the world as we know it will end if the over $250k crowd has to pay higher taxes.  The latest emphasis is on persons who use "pass-through" corporations, in which the corporation earns no income.  All income goes to the owners who claim it when they file their tax returns.  If their net-taxable income exceeds the magic number, their tax rate would increase, this much is fact.  The part that is left out is that the tax code uses marginal rates.  What this means is that each tax bracket is taxed at whatever the rate is for that tax bracket.

Now to explain how this works.  Without looking anything up lets say that income less than $10k pays no taxes, $10-50k pays 15%, $50-100k pays 20%, $100k-200k pays 30% and >$200k pays 35%.  The actual numbers and breakpoints don't matter, what matters is how tax is figured.  If you make less than the bottom bracket, you pay no taxes on income.  If your income falls into the 2nd bracket, you pay no taxes on the portion in the first bracket, and the 2nd bracket rate on the remainder.  This works all the way up the scale.  So someone who has taxable income of $220k is only paying the higher rate on $20k, not on the entire $220k.  In addition, someone making less than $50k probably has minimal deductions.  Medical expenses, maybe mortgage interest deductions, maybe childcare and not much else.  When you get into incomes over $200k the deductions increase dramatically.  Most travel and entertainment becomes a business expense, investments can be tax-deferred, and charitable contributions (which are infinitely 'fudgeable') can become a major deduction.  What this means is someone with a net-taxable income of $500k could very easily have a gross annual income of $800k.  Using my fictitious tax rates let's figure some tax rates.  With a gross income of $800k and taxable income of $500k the tax rate paid on $500k is 30.2%.  The actual tax rate paid on $800k is 18.875%.  Remember, these are not the actual tax rates, just numbers to illustrate the point.  As has been shown by the return Governor Romney released for 2011, his actual tax rate paid for that year was about 14%, but, had he taken full advantage of his deductions his actual tax rate would have been 9%.

What it boils down to is the horror stories about companies that will lay off people and reduce their income to keep from breaking that $250k (or $200k) barrier are from people who really need to find a better accountant.  The actual difference in tax rate is minimal since only the portion over $250k is taxed at the higher rate.  The ones who will pay significantly more, aren't small businesses, they are large corporations and wealthy individuals, that through corporate incentives and deductions are currently paying a much lower rate than you and I.  The media relies on the fact that most of us working-class slobs are too busy to dig into the food they've been shoveling at us.  They assume that most will just eat the icing off the top and never dig down to find out that everything underneath is manure.

Israel, now that's a sticky situation and not one that is easily dealt with, as history shows us.  First the brief history lesson.  The area was first settled at least 800,000 years ago, although the first mention of Israel was about 1200 BC.  About 930 BC, Israel was wiped out by the Assyrians and the survivors were dispersed.  Following this the area was conquered, or changed hands, in 612, 586, 538 and 333 BC.  In 135 BC, the Maccabean returned control of the region to Judaism. From that point until 390 AD, Israel was a client state of the Roman Empire.  From 390-696 Israel was part of the Byzantine empire until conquered during the Arab expansion.  Beginning in 1099, the Christian Crusades resulted in the massacre of Jews and Muslims living (peacefully) in the region, with many being sold into slavery.  The crusades finally ended in 1291 and the region was ruled by Egypt until the Ottoman Empire conquered the region in 1516.  The Ottoman's (Turkey) controlled the area until World War I (where a significant portion of European Jews supported the Germans).  During the war, Great Britian conquered the region and Israel was part of their empire until the formation of the Jewish state of Israel in 1948.  From about 400 AD until the early 1900's, the main source of antagonism towards the Jews was Christianity.  Ironic, yes?

Since 1948 the United States has been allied with just about every country in the middle east at one time or another.  Iran, Iraq, Saudi Arabia and Egypt have all been beneficiaries at different times.  Since 1970, the United States has been the main ally of Israel and have supported them in many different ways.  Most significantly in military technology.  What we are dealing with here is a region that has been at almost constant war for nearly 3000 years.  The United States long ago chose sides in this war, not for any humanitarian reasons, but to keep the region in turmoil.  If the middle east were to become one political entity, they would become a rival to our own power, economically and militarily.  In order to maintain this balance our support of Israel must vary to meet changing conditions.  If we provide too much support and write Israel a blank check, then the rest of the region gains a rallying point and could quickly begin a campaign which would require all of our resources in order to protect Israel.  If we take all support from Israel, then it becomes weak and is easily conquered.  In this situation, Israel should be pandering to the United States and not vice versa.

Should the President go running off to Tel Aviv every time Israel whistles?  In the current world situation, they're our watchdog and we feed them.  If they crap on the rug, we need to stick their noses in it.  When they do the right thing we scratch them behind the ears and say "good boy".  This isn't meant to be insulting, merely descriptive.  There are a number of people who feel that Israel should be placed upon a pedestal and we should all bow down and pay homage, but that's not the real situation.

Much of the Anti-American sentiment in the world, and especially in the middle east comes from our obvious bias towards Israel in all situations.  The only way there will ever be peace in the area is if the United States looks equally at both sides of the conflict.  Our failure in this is what creates situations such as the Libyan Embassy attack, the Iran Hostage situation, The Beirut Marine Barracks attack, and the attacks of September 11, 2001.  I'm not justifying any of these actions, just understanding that if you poke the tiger with a stick enough times, the tiger is going to react.

Any more questions or issues will have to wait for another day.  That was more work than I was prepared to undertake on a Saturday.  And I still have to tackle laundry.