Going After Iran?
Here is Ralph Peters's very interesting take on the appointment of Adm. William Fallon as Centcom commander. Hint: It's all about Iran:
Assigning a Navy aviator and combat veteran to oversee our military operations in the Persian Gulf makes perfect sense when seen as a preparatory step for striking Iran's nuclear-weapons facilitiesif that becomes necessary. While the Air Force would deliver the heaviest tonnage of ordnance in a campaign to frustrate Tehran's quest for nukes, the toughest strategic missions would fall to our Navy. Iran would seek to retaliate asymmetrically by attacking oil platforms and tankers, closing the Strait of Hormuzand trying to hit oil infrastructure in Saudi Arabia and the Gulf emirates.
Only the U.S. Navyhopefully, with Royal Navy and Aussie vessels underway beside uscould keep the oil flowing to a thirsty world.
In short, the toughest side of an offensive operation against Iran would be the defensive aspectsrequiring virtually every air and sea capability we could muster. (Incidentally, an additional U.S. carrier battle group is now headed for the gulf; Britain and Australia are also strengthening their naval forces in the region.)
While Congress obsesses on Iraq and Iraq alone, the administration's thinking about the future. And it looks as if the White House is preparing options to mitigate a failure in Iraq and contain Iran. Bush continues to have a much-underrated strategic visionthe administration's consistent problems have been in the abysmal execution of its policies, not in the overarching purpose.
Not least because of the botch-up in Iraq, there's a growing sense of the limitations of U.S. ground-force involvement in the Middle East. That doesn't mean we won't see further necessity-driven interventions and even other occupations, only that our strategic planners have begun to grasp that positive change in the regionif it comes at allis going to take far longer than many of us hoped and won't always be amenable to boots-on-the-ground prodding.
If we can't determine everything that happens in the Big Sandbox, we need to be able to control access to and from the playgrounda classic Navy mission.
And in the end, the United States remains primarily a maritime power. As Sir Walter Raleigh pointed out 400 years ago, he who controls the waters controls the world.
Gen. [David] Petraeus is going to Baghdad to deal with our present problems. Adm. [William] Fallon is going to the U.S. Central Command to deal with the future.
I'm not sure whether there is anything behind Peters's column but speculation. But read the whole thing.
The Surge Proposal
Here is videotape of the presentations of Frederick Kagan and Gen. Jack Keane and of Sens. John McCain and Joseph Lieberman urging a surge in Iraq. Fascinating: huge push for this policy from 1150 17th St. NW.
The Elephant in the Budget Room
Sebastian Mallaby has a column in today's Washington Post decrying the proposal by Senate Finance Committee Chairman Max Baucus and ranking Republican Charles Grassley to abolish the alternative minimum tax. Mallaby thinks this is a dumb idea, that the AMT is a suitably progressive tax and that abolishing it would be hugely expensive. He's clearly right on the latter point: $750 billion over 10 years, as these things are scored. But he's not precisely right on progressivity. Yes, the AMT tends to hit high earners. But only certain kinds of high earners, typically those who under the regular income tax would get high deductions or credits for dependents, tuition, mortgage payments, and state and local taxes.
Which helps us to understand why there's a desire, particularly among Democrats, to abolish the AMT. As Mallaby notes, under current law the AMT is slated to hit 23.4 million taxpayers this year. And that number is slated to rise sharply each year thereafter. Why? Because the AMT, passed in 1969 as a way to make sure no rich person got away with paying no income tax, is not indexed for inflation. That 23.4 million is a sharp increase from the number currently paying AMT, because Congress has been passing AMT fixes annually, which are a lot less expensive under budget rules than abolition.
I noted that Democrats are particularly eager to get rid of the AMT. That's because the AMT tends to hit people in high-income states, like New York, New Jersey, Connecticut, Massachusetts, and California. And what do they have in common? Each one has two Democratic senators. In the House, they're represented by 78 Democrats and 32 Republicans. Many of those Democrats have districts with lots of high earners who have been happily voting Democratic because of their liberal stands on cultural issues. But they won't be happy if the AMT suddenly has them paying an average of $6,000 a year more in income tax. Look at it this way: If the AMT starts hitting 15 percent of taxpayers nationally, it's going to hit something like 30 percent in New Jersey. That's a lot of angry voters.
There's another constituency, as I've pointed out, that doesn't like the AMT: public employee unions. That's because if taxpayers can't deduct state and local income taxes, they're likely to exert downward pressure on public employee compensation. And the states I've mentioned all have high state and local taxes and powerful public employee unions.
At the time the AMT was first passed, I was living in Detroit. There was a good deal of publicity at the time about a few rich people who were paying no income tax. One was Mrs. Horace Dodge, widow of one of the Dodge brothers who founded the Dodge car business and made huge profits from selling stock in the Ford Motor Co. The Dodges were married in 1896; Horace Dodge died in 1920, but Mrs. Dodge lived on for many years and did not die until 1970. The Dodge company was sold for $125 million in 1925, and Mrs. Dodge reportedly had an income of $40,000 a day. Anyway, this rich old lady didn't like paying taxes, so she put all or almost all of her money into municipal bonds. That was probably not a rational investment strategy, and I suppose that over time she reduced the value of her estate substantially. But evidently she didn't care: She lived in a big mansion in Grosse Pointe and didn't have to pay taxes. People were outraged; something had to be done. There were proposals around that time to make interest on municipal bonds taxable, but they were abandoned after state and local government screamed. So Congress passed the AMT instead. Here is an account of what happened from former Rep. Bill Frenzel, who was first elected to the House in 1970, just after the AMT was passed:
My memory of the history of this thing may begin to stink, but when we were mad at Mrs. Horace Dodge for not paying taxes, her principal income was derived from municipal bonds, the income from which was tax exempt. The House at that time repealed the tax-exempt nature of municipal bond income. The bond market sank, the Senate ran up the white flag, Russell Long said, "We are not going to do that," and somehow the Congress and the people got left with this awful alternate minimum tax without ever touching the element of income that caused the spark in the first place.
So now we're saddled with the AMT because Mrs. Horace Dodge didn't want to pay income taxes. And because Sen. Bill Armstrong of Colorado, who got the income tax indexed in 1981, didn't think to or wasn't able to get the AMT indexed too. A good lesson: When you set about to soak the rich, you may end up soaking a lot of people you never wanted to soak.