Gravel TV Ads

I commissioned the production of a few television ads in support of Senator Gravel. The first three are produced by an agency, BGG Advertising of Manchester, NH, and one by some Internet friends. The BGG ads are airing in New Hampshire on WMUR Channel 9 and all four are airing on public access.

Oil


Iraq


Taxes


Gravel vs. The Rest

Gravel in New Hampshire Dec 27 through Jan 8

Senator Mike Gravel will be embarking upon a statewide tour of New Hampshire between now and the January 8th primary. His "Stop and Think" tour will be conducted with the Gravel campaign RV, and starts with a slate of events in northeast NH. More events to follow shortly:

Friday 12/28

11 AM
Town Hall Meeting
VFW George J Maxfield of 1772
43 Highland St.
Rochester, NH

2 PM
Town Hall Meeting
Ossipee Town Hall

4 PM
Editorial Board with The Conway Daily Sun
64 Seavey Street
North Conway, NH

6 PM
Town Hall Meeting
The Metropolitan Coffee House
2680 Main St.
North Conway, NH

Saturday 12/29

10 AM
Town Hall Meeting
Jackson Village, NH

11 - 11:30 AM
Lunchtime Meet & Greet at J-Town Deli
174 Main St.
Jackson Village, NH

1 PM
Town Hall Meeting
Berlin VFW
1107 Main St.
Berlin, NH

Crossroads

WHY DO I SUPPORT SENATOR GRAVEL?

Two simple reasons:
1) His policies best realize the ambitions of the American people
2) While candidates occasionally pay lip service to difficult policy changes, Senator Gravel is the only one who will aggressively implement them. Through deft parliamentary maneuvering, Senator Gravel led a five month one man filibuster that successfully ended the Nixon era draft. This is the kind of chutzpah needed to move past current policy quagmires.

THE SENATOR'S POLICIES

ELIMINATE OUR DEPENDENCE ON FOREIGN OIL
Americans understand that our dependence on foreign oil contorts our foreign policy, promotes aggressive use of our military, and enriches our potential adversaries. Senator Gravel openly states that he will tax carbon and get us off foreign oil in short order. Imagine the economic boon of an exporting alternative energy sector compared to the moral and economic drain of purchasing $500 billion of foreign oil per year.

GET OUT OF IRAQ
Authorizing the use of force in Iraq was a mistake and every day that the United States remains in Iraq compounds the error. Both political parties contributed to this blunder. The Iraq war is a drain on the finances and moral authority of the United States. Any candidate that authorized this use of force is liable to be misled again either factually or morally, and is unfit to serve as our commander-in-chief.

REDUCE OUR BLOATED MILITARY BUDGET
The US spends almost $1 trillion per year, more than ten times as much money as any other nation, on the military. This level of excess serves little purpose other than to encourage a worldwide military buildup--a sequel to the cold war. This misallocation of resources is a welfare program for the military industrial complex, antagonizing towards other nations, and a drain on our country's best scientific and engineering minds.

SIMPLIFY THE TAX CODE
Senator Gravel and several Republican candidates support an overhaul of our tax structure that will eliminate all loopholes and massively reduce complexity. The FairTax Act abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax.

PRIORITIZE EDUCATION
Senator Gravel recognizes that educating our youth yields the highest return on capital available to our economy. With increased competition, merit based teacher pay, and the ability to terminate teachers that do not perform Senator Gravel will bring American educational standards up to and beyond our economic competitors.


CROSSROADS

Wittingly or not, in the next few election cycles we are making decisions toward becoming an empire or restoring our republic. The United States is at a crossroads.

We will not survive as an empire because, ultimately, we will not rule with the brutality necessary to sustain it. While our leadership is tending toward militaristic megalomania, the electorate appropriately shuns extended military adventures based on foggy motives and unbounded objectives. When our leaders' bluffs are called, the citizen and the soldier bear the consequences. Extrapolating from recent experience, our geopolitical sprawl will result in rising international ire and the sad opportunity costs of demonstrably mis-allocated resources. For the United States to remain a leader in world affairs, it must lead with care by example and principle, not by unchecked coercive force.

I encourage you to consider Senator Gravel and his policies. I think, given the chance, he would make our nation great once more. Please take the time to hear him and tell me: Do you agree?

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Think different


Mike Gravel on The NewsHour with Jim Lehrer. It was after seeing this video that I decided to actively support Senator Gravel.


Senator Gravel's first debate appearance


Senator Gravel debating in Iowa


Senator Gravel discusses Eisenhower's Warning


A moving ad


A clip from 1971. Same man.


MORE PLACES TO GO

To find out more about Senator Gravel's history take a look at his Wikipedia entry.

The campaign's YouTube channel is here.

A petition to include Senator Gravel in the October 30th debate is here.

Senator Gravel's official campaign website is here.

To donate to Senator Gravel's campaign click here.

Double Taxation, Fairness, and Wealth Inequality

A tax system funds government operations and incentivizes taxpayer behavior. A good tax system is fair and relatively free of tax arbitrage opportunities. Fairness is highly subjective. A tax arbitrage, however, is easier to identify and exists when unproductive changes in behavior or tax classification result in lower taxes. Most would agree that a tax arbitrage is unfair to those who do not contort their books or business structures to take advantage of the lower rates.

The specter of "double taxation" is often used to argue for lower capital gains and dividends taxes. Double taxation occurs when two or more taxes are paid on the same asset, transaction or income. In the extreme, one could argue that because corporations are taxed at rates approximating earned income rates, dividends and capital gains should be taxed at 0% in order to avoid double taxation and tax arbitrage opportunities.

We have an economy with a GDP of $14 trillion and federal tax revenues of $2.6 trillion. As a society we have chosen to raise that $2.6 trillion largely by taxing the flow of money through commerce, corporate profits, and individual income (earned and capital gains). Notably, municipalities generally tax a stock of wealth (a tax as a percentage of property value, rather than income). An indictment of our federal tax system is not advocacy of double taxation or wealth redistribution.

A tax arbitrage of sorts is opened when the sum of the dividends tax rate and the corporate tax rate is different than the earned income tax rate. If the sum is greater, for example, there is an incentive to label an owner as an employee and pay their share of profits in wages. A weaker argument applies to the sum of the capital gains tax rate and the corporate tax rate in relation to the earned income rate. Many investors including myself, though, benefit from the ability to classify substantial portions of income as capital gains rather than earned income even when no corporate tax has been levied. This treatment is overly generous, in my opinion, to some of our wealthier citizens.

Other forms of tax arbitrage come in the form of mobile businesses or investors taking their operations overseas to more tax advantaged locales. It is important to note, though, that the same can happen with skilled labor moving to places where their income is taxed at lower rates. The attraction or flight of economic activity is a factor any country must consider when setting the size of their government.

Then comes the consideration of fairness, an admittedly highly subjective criteria that I listed as a property of a "good" tax system. When one set of taxes is paid by generally wealthier citizens (capital gains tax, dividends tax, and indirectly the corporate income tax), and a different set of taxes by generally less-wealthy citizens (the earned income tax) the topic of fairness is inherently in play. Specifically, one wonders what role, if any, these tax structures have in the growing separation between the rich and the poor in the United Sates. In January 2007 George W Bush remarked "The fact is that income inequality is real -- it's been rising for more than 25 years." Moreover, at a Treasury Department conference this year Alan Greenspan noted "[Income inequality] is where the capitalist system is most vulnerable. You can't have the capitalist system if an increasing number of people think it is unjust."

So, what are some properties of a fair tax system?

• A fair tax system must be clear. Ambiguity is a breeding ground for unfair results. Someone who plays more tax games and has the wherewithal to hire elite accountants to push the rules should not be able to pay substantially lower rates.

• A fair tax system must be free of tax arbitrage opportunities. For one, tax arbitrage is unfair to those that are unaware of it. Those that engage in it may make decisions that result in lower productivity in order to satisfy largely arbitrary tax treatment criteria. Additionally, the administration of tax arbitrage is a poor allocation of societal resources. We have some of our best minds working in the field of "tax engineering," an economic waste.

• Most agree that a fair tax system must not be regressive. A regressive tax system would tax the rich at a lower percentage rate than the poor. A non-regressive tax structure means that the wealthy will pay a greater absolute level of taxes, at least commensurate with their greater level of income. Moreover, many citizens currently accept the notion that our tax system should be progressive, meaning the wealthy pay a greater percentage of their income in taxes. In an earlier post I challenge that our current system is in fact progressive, alleging that it is actually regressive at the upper end.

• Capitalism requires some level of wealth inequity in order to incentivize work. Additionally, most Americans see it as intrinsically fair for someone who works hard to enjoy the spoils of their labor. A separate question surrounds the profit that comes from sitting on a large stock of wealth; the interest, dividends, rent, asset appreciation, etc that flow to investors. Often large discrepancies in that investment income (from nearly zero investment income for the majority of people to a huge amount for the wealthiest) strike Americans as unfair. One reason is that, unlike the average worker, the recipients are not toiling away every day for their income. Another is that the capital used to earn the investment income may be inherited. Finally, it may be regarded as unfair for wealth to accumulate with those who are already wealthy when others may have a better and more immediate need for the funds. In other words, the utility of money is thought to be higher among poorer people than wealthier people (assuming we regard the welfare of each citizen as equally important). And, so the theory goes, resources should be allocated to our poorer citizens even at the expense of some of our capitalist incentives.

• A fair tax system must be transparent. Without the assurance that one's neighbor is adhering to the same rules, fairness cannot be ensured. Simpler taxes are often more transparent, since nearly everyone can understand the rules. Additionally, a simple tax system is easier and cheaper to administer than a complex one. In 2006 our federal tax rules were 66,498 pages long.

• A fair tax system imposes societally beneficial incentives. More accurately, any tax is a disincentive for the action or thing which is taxed. So, choosing what to tax inherently involves an assessment of what activities are to be discouraged, and by how much. A fair tax system would tax activities that have negative externalities. A negative externality is a disadvantage to the general public not otherwise represented in a cost.
  

This post is simply a description of what we may want out of a tax system. A much harder topic is: What tax system do we want, and how do we get there?

A Great Nation Would Get Off Oil

This advertisement is a challenge to US citizens. Many Americans, whether or not they admit it, feel we have fallen from greatness. We have stumbled through moral compromise, military brutality, and educational mediocrity. There is a temptation to blame governmental structure, simplistic media, or the misfortune of weak leadership. Ultimately, though, if our citizenry does not take responsibility for our missteps then we have already lost.

A root cause of our fall from greatness is our neglect to acknowledge the role oil plays in our foreign policy and the fortunes of adversarial nations. By submitting to pay premium prices for foreign oil we line the pockets of the nations with whom we struggle to work. We shape our foreign policy to value regions rich in oil deposits. We position our military to secure the steady flow of oil. We justify preemptive strikes and crippling sanctions against nations whose only power is derived from their oil revenues. As a country we are terrorized by the prospect of losing access to foreign oil. We consume about 20 million barrels of oil per day. Of that, about 75% is imported. Our commercial oil stocks are about 700 million barrels, with an equal amount in the government controlled Strategic Petroleum Reserve. If access to foreign oil were substantially impaired we would face an immediate price shock and run out of physical stockpiles within a matter of months. That is terrifying.

In the short term our dependence on foreign oil is absolute. A common misconception is that we are also wholly dependent on foreign oil in the medium term of 10 to 20 years. To the contrary, with a concerted effort and associated tax policies we can quickly move towards the existing technologies of electric vehicles powered by solar, wind, and nuclear generated electricity, and biofuels which leverage existing vehicles and infrastructure.

Next time you hear about a gasoline tax recognize that, while a short-term sacrifice, it is the efficient market solution to our oil woes. Subsidies, on the other hand, are the big government solution. They force politicians and regulators to play favorites with technologies and corporations. Subsidies, as we see from current discussions in Washington, may come and go, thus undercutting the private sector's willingness to invest in directly subsidized technologies. And inaction is to accept defeat. Moreover, taxation of oil consumption does not mean bigger government. We can cut taxes elsewhere in tandem with the imposition of an oil tax. Those tax cuts can be progressive to offset the regressive nature of an oil tax. The intent is to incentivise the adoption and improvement of alternative energy technologies which already exist.

To those who think getting off oil is unrealistic, know that the barrier is our own will. It will be difficult, but by no means economically crippling in the short term, to renounce oil. In the long term we will prosper as an alternative energy technology exporter. We will prosper as a nation which needs not compromise our integrity or moral authority for the expedience of controlling oil reserves. A great nation would get off oil.

Taxation Part I: Warren Buffett's Secretary, and The Regressive Upper End

This past summer Warren Buffett decried the fact that without any tax planning he pays federal taxes at 18%, far lower than his secretary's 30%. Buffett remarks, "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning."

The reason that Buffett's federal taxes are so low is that much of his income is treated as capital gains. A capital gains tax is the tax levied on the profit realized upon the sale of a capital asset, such as stock or real estate. Earned income rates apply, on the other hand, on compensation received when one goes to work and receives a paycheck. In the US, the federal capital gains tax is 15% while the earned income rates range up to 35%.

I am personally very familiar with these concepts. I run a currency trading hedge fund and invest in my own fund alongside a number of other investors. I personally benefit substantially from classifying most of my investment income as capital gains. Additionally, current law allows me to even classify as capital gains much of the fees I collect from other investors for managing their money in my fund. In my opinion, those fees are the equivalent of wages in my line of work and should be taxed as earned income, just like someone receiving a paycheck. My fellow money managers, though, have made a large number of donations to both Democrats and Republicans and spent a great deal of money on lobbyists to keep those fees classified as capital gains, and thus keep the fees taxed at only 15%.

Data from the IRS demonstrates that the large majority of capital gains are reported by those with incomes in the top 1% of all filers. On average, a taxpayer with a higher income has a greater portion of their income in the form of capital gains. Most multi-millionaires or billionaires make their money through appreciation in their private business assets, stocks, or real estate--all capital gains income. With more affluent members of our society classifying much of their income as capital gains, the average overall tax rate actually DROPS as income rises. Many citizens think of our tax system as progressive, meaning that the effective tax rate is higher for those with higher income. In fact, the low capital gains tax rate combined with the fact that the wealthy are able to categorize much of their income as capital gains, mean that our tax system is actually regressive at the upper end.

Senator Gravel's exclusion from the October 30th, 2007 debate at Drexel University

This is an open letter to NBC executives. On October 19th they made a surprise decision to exclude Mike Gravel from the MSNBC debate at Drexel University on October 30th. Senator Gravel and I have no connection other than a shared set of ideas. I have never met him and don't work for him or his campaign.

When I called them, NBC said it was Drexel's decision, Drexel said the DNC called the shots, and the DNC said it was NBC's show. Go figure. Though no one raised their hand, it seems pretty clearly to be NBC's decision. To cover the bases I FedEx'ed my letter to 5 execs at NBC, Howard Dean at the DNC, and Brian Keech at Drexel. This letter will run in the three largest New Hampshire newspapers (The Union Leader, The Concord Monitor, and The Nashua Telegraph) on Thursday October 25th, in Drexel University's weekly student newspaper, The Triangle, on Friday October 26th, and in University of Pennsylvania's Daily Pennsylvanian, USA Today, The New York Times, The Wall Street Journal, The Washington Post, The Los Angeles Times, The San Fransisco Chronicle, and The Philadelphia Inquirer on Tuesday October 30th.

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Dear NBC Executives,

My name is Gregory Chase, I live in New Hampshire, and I run a hedge fund that trades currencies. On a personal basis, separate from Senator Mike Gravel's campaign, I am making an independent expenditure of a greater magnitude than what some other candidates' campaigns will spend in the state through the primary. I am sending statewide direct mail, installing lawn signs, and running ads supporting Senator Gravel every day between now and the New Hampshire primary in the state's three largest newspapers: The Union Leader, The Concord Monitor, and The Nashua Telegraph.

It was with great disappointment that I learned that NBC decided to exclude Senator Gravel, and only Senator Gravel, from the field of Democratic candidates for their October 30th 2007 debate at Drexel University in Philadelphia. I learned about Senator Gravel by watching televised debates earlier this year. In my opinion his ideas regarding foreign policy, military spending, and energy independence are advanced relative to the other candidates. I would like Senator Gravel’s ideas to be heard.

NBC cited fund raising as a criteria for inclusion in this debate, stating that a candidate must have raised $1 million to participate. Most current and aspiring politicians, along with the general public, believe money and special interests play too large a part in elections. I don't understand why a certain level of fund raising is a requirement to participate in a presidential debate. Senator Gravel is proud of the fact that that his candidacy is built on ideas, not cash.

As you know, polls taken at this point in the primary measure name recognition more than where votes will actually be cast. The public is just starting to focus on the upcoming primary. Once New Hampshire voters learn about Senator Gravel, and they will, I believe that a substantial number of them will decide that their ideas are more in line with Senator Gravel's than with any other candidate's. NBC is doing New Hampshire and the nation a disservice by excluding Senator Gravel. Your company is censoring a multi-term United States senator, a veteran, and a patriot.

If it would help get Senator Gravel back into the debate, I offer to purchase $1 million of advertising from NBC, or simply pay NBC $1 million in exchange for the service of allowing Senator Gravel to participate in your debate.

Best regards,
Gregory V Chase


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Click here for a PDF of a copy of this letter running in New Hampshire newspapers.

Here is a YouTube video discussing and reading the letter.