Posts for December, 2012
Since the Arab spring, it was painfully obvious that the revolution was all about exchanging a dictator for a far worse extreme Islamist regime with big ambitions. I had warned people that Shariah will be the law of the land and that the former constitution granting the freedom of religion, equality and women’s rights would soon be a thing of the past.
On February 11, 2011, addressing the success of Egypt’s revolution, which he himself enthusiastically supported, President Barack Obama stood in the Grand Foyer of the White House and triumphantly declared, “The people of Egypt have spoken, their voices have been heard, and Egypt will never be the same.” I was afraid that the statement would become true and that Egypt would never be the same…but for the worse.
About two weeks ago, Egyptian President Morsi appeared on Egyptian television and shocked the nation, issuing a presidential decree effectively banning all challenges to his decrees, laws and decisions. The decree stated: “The president can issue any decision or measure to protect the revolution.” “The constitutional declarations, decisions and laws issued by the president are final and not subject to appeal.” The country’s constitution was repealed and a new constitution would be written.
Since Morsi’s declaration, Egypt has experienced a new wave of protests. The protests groups contain a high concentration of women, moderates, Coptic Christians and minority groups, who know what is coming. Former U.S. diplomat Jamie Rubin said Morsi's edict "brings to mind all the fears that people in that part of the world have had about the Muslim Brotherhood when it comes to democracy."
The Morsi regime has responded with a heavy hand to criticism it has received in the press. On December 4th, at least eight influential dailies, a mix of opposition party mouthpieces and independent publications, suspended publication for a day to protest against government restrictions and the ban on the freedom of expression in the draft constitution.
Mohamed El Baradei, an opponent of Morsi during the elections, accused the president of establishing himself as “a new pharaoh.”
On November 27th, a CNN reporter had interviewed protester about the developments in their government. One protester responded, “Weren't things in Egypt supposed to be different now?” The economy is still staggering, the police are still clashing with protestors and the people have fewer freedoms than before.
The big winner of the Morsi/Muslim Brotherhood sweepstakes, however, is the relations with Turkey.
Egyptian Ambassador in Ankara Abderahman Salaheldin said, "the bilateral relations between Egypt and Turkey boomed in the aftermath of the revolution."
Morsi and the Muslim Brotherhood have developed close ties with Turkey’s Prime Minister Recep Tayyip Erdogan. In fact, it appears that Egypt’s Muslim Brotherhood has modeled itself after Turkey’s Islamist political party.
Playing off the title of Turkey’s ruling Islamist political party, “The Justice and Development Party,” the Muslim Brotherhood ironically named its political party “The Freedom and Justice Party.” UN’s Palmer Report cites the new strategic cooperation agreements Ergodan plans to sign with Cairo.
Egypt and Turkey are considering plans to lift visa restrictions and recently completed joint naval exercises in the Mediterranean Sea. Turkey has offered a host of measures to bolster Egypt’s economy, including a $2 billion aid package. There is even talk of Turkey’s helping Egypt to restore its Ottoman-era buildings, according to Tim Arango of the NY Times.
Over the past 10 years, Turkey’s Erdogan has systematically dismantled the most well-established secular form of government in the Middle East, while establishing and guaranteeing his own power for many more years to come – all in the name of “democracy.” Morsi is attempting to make the same changes, but over the course of a few months. For many Egyptians, this transformation is too extreme and too fast.
Erdogan’s ambitions have caused many to believe that he is seeking a leadership role beyond Turkey, throughout the whole region. At the annual convention of Mr. Erdogan’s party in Ankara, the capital, a few weeks ago offered a portrait of a realigned Middle East with Turkey at the helm. Mr. Morsi said at the gathering, “We offer our gratefulness for the support that the Turkish people and its administration has extended and will extend to us in the future.” To a standing ovation, Khaled Meshal, the political leader of Hamas, the Palestinian militant group, declared of Mr. Erdogan: “You are not only a Turkish leader. You are, now, also a leader of the world of Islam.”
In a recent interview with Russia Today, Syrian President Basshar al-Assad said of Erdogan, “He personally thinks that he is the new sultan of the Ottoman and he can control the region as it was during the Ottoman Empire under a new umbrella. In his heart he thinks he is a caliph.”
In mid September, Erdogan was received at Cairo’s airport to a ‘rapturous reception’. Using a sound system, Erdogan spoke to the crowds in Arabic, saying, "Salaam aleikum, Egypt and Turkey are one. Peace to the Egyptian people." The crowds responded with shouts of; "Egypt and Turkey will together become an Islamic Caliphate".
But he was given a more reserved reception by officials of the Muslim Brotherhood, whose old guard do not share the admiration of the group's younger generation for the Turkish leader. "We welcome Turkey and we welcome Erdogan as a prominent leader but we do not think that he or his country alone should be leading the region or drawing up its future," said Essam el-Erian, deputy leader of the Brotherhood's Freedom and Justice party.
Will the new found cooperation between Egypt and Turkey last? I think it will be short lived. Although Egypt’s Muslim Brotherhood is finding support and guidance from Turkey, I do not think Egypt will be content to live under the shadow of Turkey.
Paul J. Sullivan, a Middle East security expert at Georgetown University, does not believe that Egypt will accept Turkish dominance of the region, “There is within the Egyptian psyche that belief that Egypt should be the leader of the region,” The Turks are not Arabs and should not take the mantle of responsibility for the Arab world.
With the ascendancy of Turkey in the north and Egypt’s new role as an emerging player, could we see two competing influences in the region? Is there a coming show down between Egypt and Turkey? I think yes. When two countries with big ambitions for regional dominance exist, sooner or later they will collide.
When discussing the increase in tax rates, not all consequences of the increase are being analyzed. A big factor to consider when raising taxes is that people will not want to pay more in taxes and will do just about anything to avoid paying taxes.
Effects of tax rate increase in Britain
In the 2009 tax year in Britain, more than 16,000 people reported annual income of more than 1 million pounds (equal to about $1.6 million today). Then in late 2009, Prime Minister Gordon Brown, a member of the Labour Party, introduced a new 50 percent top income tax rate for high-income earners. After that, the number of people reporting income of at least 1 million pounds fell to 6,000.
“It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes,” The Telegraph reported.
Instead of raising revenue, the tax hike cost the U.K. 7 billion pounds ($11.2 billion) in lost revenue for 2011.
In 2011, the government of Conservative Party Prime Minister David Cameron has announced that it will lower the top rate from 50 percent to 45 percent, a move the Labour Party officials have called a “tax cut for millionaires.”
Since Cameron’s government announced the lower top rate, the number of Britons reporting income of at least 1 million pounds has risen to 10,000.
Anecdotal data from France
Mayor Daniel Senesael of Nechin, about a kilometer inside Belgium near the French city of Lille, claims that French actor Gerard Depardieu has bought a home and set up legal residence in his small town, lured by the food, the people, the lifestyle — and lower tax rates than back home.
The Socialist government under French President Francois Hollande has infuriated many ultra-rich in France by presenting a 2013 budget that would tax top earners at 75 percent over the first €1 million of annual income. Belgium's top rate is 50 percent.
Depardieu is not alone in his quest for lower taxes. Alexander Kraft, head of Sotheby's Realty, France, said: "The result of the presidential election has had a real impact on our sales. “A large number of wealthy French families are leaving the country as a direct result of the proposals of the new government.”
Inquiries from wealthy French for London homes worth more than five million pounds soared by 30 per cent in the first three months of this year, UK estate agency statistics showed.
Gilles Martin, a Swiss tax consultant, reported the same trend. "Since the socialists came to power in France, I have been deluged with inquiries from rich French people who would rather pay their tax in Switzerland," he told Switzerland's 20 Minutes newspaper.
Jean-Marc Ayrault responded to the report of flight of the wealthy with an outburst. "Those who are seeking exile abroad are not those who are scared of becoming poor," the prime minister declared after unveiling sweeping anti-poverty measures to help those hit by the economic crisis.
These individuals are leaving "because they want to get even richer," he said. "We cannot fight poverty if those with the most, and sometimes with a lot, do not show solidarity and a bit of generosity," he added.
The Hollande government is concerned that the tax increases may not track according to the projected revenues. Mr Hollande has since introduced other hefty new charges on capital gains and inheritance, while increasing France's wealth tax and an exit tax for entrepreneurs selling their companies. The changes are designed to tap into the wealthy even if they choose to leave.
While Mr Ayrault opted not to mention Mr Depardieu yesterday, the Gallic star drew fierce criticism from liberal politicians and commentators.
Socialist MP Yann Galut called for the actor to be "stripped of his nationality" if he failed to pay his dues in his mother country, saying the law should be changed to enable such a punishment.
Benoît Hamon, the consumption minister, said the move amounted to giving France "the finger" and was "anti-patriotic".
However, Depardieu is not alone as an ex-pat in Nechin. Among Mr Depardieu's neighbors in the village of Nechin will be members of the Mulliez family, who own the Auchan supermarket chain.
Since 2007, at least 18 states have raised their cigarette taxes to over $2 per pack. In New York, the tax on cigarettes is $4.35 a pack, and an additional tax in New York City boosts the total to $6.46 a pack; $1.50 is New York City tax; $0.61 Prepaid Sales Tax.
But the cigarette tax in Virginia is just 30 cents a pack, so smugglers can buy bulk quantities of smokes in Virginia and sell them in New York and other high-tax states at a huge profit — a racket known to police as “smurfing,” according to The Economist.
One individual, who was apprehended, claims to have sold on average 5000 packs of cigarettes per month at a profit of $2 per pack. The cigarettes are purchased in low tax states such as Virginia or from Indian Reservations and resold in New York City.
The Bureau of Alcohol, Tobacco, Firearms and Explosives estimates that illegal cigarette sales cost local, state and federal governments nearly $10 billion a year.
The bottom line is that New York is taking in much less revenue than expected from the increases in cigarette taxes.
New York City is spending a tremendous amount of time and effort to reduce tax evasion. The following statement was posted in October 2012 by the NYC department of Finance:
The sale of cigarettes within New York State and New York City is regulated by federal, state, and local law and enforced by the New York City Department of Finance and the New York State Department of Taxation and Finance. Finance is engaged in an active campaign against those who try to evade the cigarette tax. This includes an advertising campaign to educate the public, an ongoing effort to bill and collect from those who have purchased untaxed cigarettes, and legal action against those who engage in cigarette tax evasion and fraud. We are also placing sellers, advertisers, shippers, and purchasers on notice and informing them of their legal obligations and responsibilities concerning New York City and State laws.
I seriously doubt that the sternly worded statement will change the purchasing habits of New York residents.
The tax increases approved by the Government of Mariano Rajoy in late 2011, includes increasing the income tax rate, a tax on savings, increases in VAT taxes and sales taxes. These taxes were designed to generate a 4.3% increase in tax revenue. However, from the data compiled in early December 2012, the results show a decrease in revenue by 3.5%.
To deal with the shortfall the government is considering an additional round of taxation: remove the shelter deduction retroactively (about 6,000 million euros) of credits for contributions to private pension plans (2,000 million); impose an increase and not only to gas taxes, but also to fuels, and an excise tax increase (alcohol, tobacco, soft drinks…) or implement new environmental taxes.
My guess is that the new taxes will not help achieve the desired revenues, either. People will work hard to avoid paying it.
According to MSN, about 100,000 more people moved away from California in 2011 than relocated to the Golden State, according to the latest report from the U.S. Census Bureau. The trend for 2012 is showing an increase in the exodus from California when compared to 2011.
So, where are these Californians going? The Census Bureau calculated that the most popular destination is Texas, with 58,992 residents relocating there in 2011 along with a number of California companies.
Joel Kotkin, demographer, addresses the causes of the exodus, "Basically, if you don't own a piece of Facebook or Google and you haven't robbed a bank and don't have rich parents, then your chances of being able to buy a house or raise a family in the Bay Area or in most of coastal California is pretty weak." The Golden State's fastest-growing entity is government and its biggest product is red tape.
Housing is merely one front of what he calls the "progressive war on the middle class." Another is the cap-and-trade law AB32, which will raise the cost of energy and drive out manufacturing jobs without making even a dent in global carbon emissions. Then there are the renewable portfolio standards, which mandate that a third of the state's energy come from renewable sources like wind and the sun by 2020. California's electricity prices are already 50% higher than the national average.
The people who are leaving are upper middle class. Their income has been dramatically affected by the tax increases in 2009. This is already on top of the high cost of living.
A worker in Wichita might not consider those earning $250,000 a year ‘middle class’ it would be considered wealthy, but "if you're a guy working for a Silicon Valley company and you're married and you're thinking about having your first kid, and your family makes $250k a year, you can't buy a closet in the Bay Area," Mr. Kotkin says. "But for $250k a year, you can live pretty damn well in Salt Lake City. And you might be able to send your kids to private schools and own a three-bedroom, four-bath house."
Mr. Kotkin lists four "growth corridors": the Gulf Coast, the Great Plains, the Intermountain West, and the Southeast. All of these regions have lower costs of living, lower taxes, relatively relaxed regulatory environments, and critical natural resources such as oil and natural gas.
Take Salt Lake City. "Almost all of the major tech companies have moved stuff to Salt Lake City." That includes Twitter, Adobe, eBay and Oracle.
Then there's Texas, which is on a mission to steal California's tech hegemony. Apple just announced that it's building a $304 million campus and adding 3,600 jobs in Austin. Facebook established operations there last year, and eBay plans to add 1,000 new jobs there as well.
In a study performed by the Manhattan Institute for Policy Research, the data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are driving businesses to locate outside California.
Proposition 30, which passed a referendum in November, is projected to raise $6 billion in additional revenues. However, the projected revenue increases will not close the gap in the $16 billion deficit. The state spending will shoot to $130.7 billion this year, up $8.9 billion over last year.
The State Budget Crisis task force estimated that the burden of debt totaled at least $167 billion and as much as $335 billion. In addition to this debt, California still owes the Federal Government $14 billion in unemployment compensation, and public schools $10 billion.
Paying down the state’s ever growing credit card bill is on track to spend 8.9%, or about $8.6 billion, of the state general fund budget in the current fiscal year.
Even if California fully procures the $6 billion in revenue from proposition 30, next year’s deficit will be larger than this year’s deficit…prompting new rounds of tax increases…prompting an increase in the rate of exodus.
Preserving one's wealth is truly a strong driving force. However, this force is not generally recognized by politicians who attempt to separate people from their money.
The shooting has forced me to develop a list of priorities. At the top of the list is faith, then love, then freedom, then honor and duty. Way down on my list is life. If I have lived a life of faith and love in a free manner; and if my life is one characterized with courage, convictions and character, then I am ready to go at any time. I will die some day; one out of one people will die. The probability of me meeting my end is quite high…as it is with my children. It is not a matter of if I will die, it is when. I can't give something a high priority when that something is inevitable.
For me, this isn’t just talk. Since the death of my brother, I have learned to live everyday as if it was my last. Every morning that I wake, I give thanks to God, “Lord, it appears that you have given me the privilege and opportunity to see the dawn of another day. In this new day, help me to find another area of my life to surrender to your will and your ways. Show me another person to love today and lead me in your Truth. (For this is only one Truth, one Way and one life; and it is only found in Jesus) And if you take me out of this world today, let me go with a clear conscience, a pure heart and a genuine faith.”
I have repaired the broken areas in my life. I have gained a clear conscience with acquaintances and family. I have forgiven all those who have wounded me. And I am at peace with God. I am ready.
If I have left this life in a gruesome manner at the hands of a criminal, don’t grieve for me. I am in a better place. Instead grieve for the person who took my life; that person is living in torment, unable to see the life, love and freedom that Jesus has to offer. But forgive that person, because I already have.
After the Newtown shooting, the National Rifle Association, with roughly 4.3 million members, deactivated its Facebook page, had stopped tweeting on its Twitter account and had been issuing a "no comment" to any media outlet seeking a response.
But late Tuesday, the group broke that silence with a statement:
"The National Rifle Association of America is made up of four million moms and dads, sons and daughters -- and we were shocked, saddened and heartbroken by the news of the horrific and senseless murders in Newtown. Out of respect for the families, and as a matter of common decency, we have given time for mourning, prayer and a full investigation of the facts before commenting. The NRA is prepared to offer meaningful contributions to help make sure this never happens again."
There are two major forces at work within the NRA. With the increased talk of gun control, the NRA has added an average of 8000 members per day and has received an large influx of contributions. But since the statement was released, the NRA website has been overwhelmed by member furious at the thought of the NRA softening its opposition to gun control. Of course, the official statement didn’t explicitly state that it would moderate its position, but it gave a tone of moderation.
The NRA is seen as the primary restraining force to gun control, but its members believe this it is also providing less restraint against government than is desired.
Some NRA members have demanded to see the books to determine if money was a factor in the new moderate tone. With just a cursory look at the main sources of revenue in December, it became clear that Karl Rove may have influenced the NRA into a softer stance. The NRA has received over $600,000 in donations from Crossroads GPS and Rove’s super PAC, American Crossroads. Although this amount of money is significant it represents a small percentage of income. During the 2012, the NRA spent a total of $17.6 million on political campaigns; including $243,000 on Tommy Thompson’s Senate campaign.
Karl Rove is not a well-liked individual in conservative circles. His support of many pro-choice, big government candidates has angered many conservatives, but his disdain for the second amendment is a particularly sore spot.
The NRA is a 501(c)(4) group and is not required to disclose its donors. But in order to maintain 501(c)(4) status with the Internal Revenue Service, social welfare must be the main focus of these groups, so they cannot have more than half of their overall spending go toward politics. Therefore the expenditures are public documents.
Many NRA members are openly talking about their displeasure with the NRA and joining the GOA (Gun Owners of America), a gun rights lobbying group which is much more rigid in its ideology. But with the tremendous influx of new members and money, the NRA appears to have momentum and even the most conservative members do not want to hurt that momentum. Thus they are stuck between great displeasure over the lack of response by the NRA and the excitement of the rise in membership.
While members look for a convenient spot to jump ship, the lament is that nearly every conservative group gets hijacked by moderates sooner or later.
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