The major challenges America faces today resulted from events that occurred over decades, centuries, and millennium. For example, present day conflicts in the Middle East began hundreds, if not thousands, of years ago. We learned the risks related to foreign oil dependence in the early 1970’s. Policy decisions and events that predate former President Bush’s 2001 inauguration precipitated the collapse in the housing industry and resultant economic recession.

In short, President Obama, like the rest of us, inherited a world that took billions of years to create; not one created over the last eight (8) years. Whenever President Obama bemoans his inheritance, he should bear in mind he inherited an America that elected its first African American President. The president and America face a hazardous road ahead. President Obama will not find solutions in his rear view mirror

© 2009, by John Butrus

In simple terms, small business owners earn what is left over after all business expenses, including employee salaries and benefits, are paid. During past economic downturns, small business owners borrowed from banks, took cash advances on their credit cards, and used home equity lines of credit to obtain working capital needed to run their businesses. Due to the credit crisis, however, these cash resources are not available this time around. Lack of working capital has left many small businesses fighting to survive.

If, despite a business owner’s best efforts, the business fails, the owner faces a potentially catastrophic personal financial crisis. Banks, landlords, business equipment vendors, among others, often require small business owners to sign a personal guarantee to obtain business loans and equipment. Accordingly, if the business fails, the owner has no job, no business, and no income; and, must find a way to repay business debts and household expenses at the same time.

Since small business failures do not present a “systemic risk” to any critical industry, owners will not receive a government bailout. If small business owners persevere and survive the current recession, however, they can look forward to paying higher taxes on the income they earn.

© 2009, by John Butrus, All Rights Reserved

State marriage license applications do not inquire as to an applicant’s sexual orientation. In addition, state and federal statutes related to marriage contain no prohibition on marriage based on sexual orientation. As such, gay persons can legally obtain a marriage license and get married. (Among other combinations, a gay man can legally marry a lesbian woman.)

The Defense of Marriage Act (DMA) defines marriage as, “a legal union between one man and one woman.” Similarly, the Texas Family Code requires marriage to be between a man and woman, and specifically precludes issuance of a marriage license to persons of the same sex. As such, same sex persons, irrespective of their sexual orientation, cannot legally marry. In sum, gay persons can legally get married, however, same sex couples cannot (except in four (4) states).

© 2009, by John Butrus, All Rights Reserved

Why can’t we be friends?
Why can’t we be friends?
Why can’t we be friends?
Why can’t we be friends?

I’d kinda like to be the President
so I can show you how your money’s spent

Complete Lyrics

In a March 6, 2009 draft report titled, “AIG – IS THE RISK SYSTEMIC?” AIG provides the answer. [Click "Setting the Record Straight] The report contains information that, if true, gives credence to the proposition that a worldwide crisis of unknown proportion would ensue were AIG to fail. The Obama Administration, Congress, the Teasury Department, and the Federal Reserve, face enormous challenges with respect to preventing the AIG crisis from plunging the world’s economy into the dark ages. The scary part is that the AIG problem may be too big to fix. One thing for certain, the $165 million in bonuses paid to AIG employees is the least of our problems.

Consider the following facts and information setforth in the report:

International Lease Finance Corporation (ILFC) is the largest aircraft lessor (owner) in the world, with more than 950 aircraft.

-Since 1978, ILFC has purchased more new Boeing aircraft (approximately 670 units) than any airline or leasing company

-ILFC is the largest commercial customer of General Electric (engines), Honeywell, Rockwell, Int’l (avionics) and United Technologies (engines/APU)

-ILFC is the largest buyer of U.S. made engines and components for new Airbus aircraft

-ILFC has 102 new jets on order from Boeing as of December 2008, with a value of $12.5 billion, for deliveries in 2009 and beyond

-A failure of ILFC may lead to loss by Boeing of its largest customer, including $12.5 billion of forward order book, which may result in reduction in Boeing’s 183,000 person workforce

ILFC may be forced to liquidate its 1,000-plane aircraft portfolio at distressed prices, severely impacting the already weak aircraft industry

Losses to U.S. banks and U.S. institutional holders of ILFC debt (currently $30 billon+ ).

Worldwide, AIG writes insurance for:
– 94% of the Fortune 500 – Global, with annual premiums of over $10.5 billion
– 97% of the Fortune 500, with annual premiums of nearly $9 billion
– 97% of the Fortune 1000, with annual premiums of over $10.2 billion
– 81% of the Forbes 2000, with annual premiums of nearly $15 billion
– 90% of the Financial Times 500 – Europe, with annual premiums of $6 billion
– 77% of the Financial Times 500 – U.K., with annual premiums of $2 billion

AIG Commercial Insurance (AIGCI):
-Largest property casualty insurance operation in the United States
-Protects and insures approximately 180,000 entities
employing over 106 million people in the U.S.
-Nearly 1/3 of all people in the United States are employed by an entity that is protected by insurance coverage through AIG Commercial Insurance
-Protects 20 million commercial and individual policyholders & certificate-holders
-Paid approximately $18.3 billion in U.S. claims in 2008

-AIG insures 36 million households worldwide
-Covers 70% of the top 50 international banks
-AIU insures the U.S. military, the U.N., U.S. and foreign embassies, and important commercial and other organizations worldwide, including the Panama Canal, oil rigs, trucking, marine cargo, and Doctors without Borders
-AIU’s Defense Base Act program provides coverage to contractors in support of the rebuilding of the infrastructure in Iraq and Afghanistan
-AIU has over 20,000 employees and over 70,000 agents globally

We pay taxes without representation in a variety of contexts. In most cities, hotel rooms and rental cars include a variety of taxes that add as much as 25% to your bill. For example, when a person domiciled in New York travels to Miami, stays in a hotel and rents a car, he/she will pay significant taxes. Nevertheless, this person cannot vote in Miami (or Florida) elections, and therefore has no representation.

Similarly, many cities where new sports complexes were built in the last 10 years, have a local entertainment tax used to pay for the new facilities. Typically, the entertainment tax is added to the state sales tax. Accordingly, if an out-of-state visitor travels to a city that has an entertainment tax, they pay the tax, but have no representation.

New York City, among others, levies a city wage tax (income tax) on, among others, citizens domiciled out-of-state. When the L.A. Lakers play the Knicks in New York City, the Laker players must pay New York City Income Tax on the money they earn for the game played in New York. The Laker players cannot vote in New York, and, therefore, have no representation in New York.

Another example is property taxes paid on real property not located in the owner’s home state. A person domiciled in New York, who also owns a house in Miami, pays property taxes in Miami, but cannot vote in Miami.

Although the taxes identified above were not the impetus for this week’s Tea Parties, they provide irrefutable proof that U.S. citizens pay taxation without representation.

Photograph by, Ji Lee

© 2009, by John Butrus

CNN – Making News or Reporting It?