WHEN YOU TAX PROFITS, YOU TAX PEOPLE

By Lawrence Kudlow

ExxonMobil just reported the largest annual profit ever by a U.S. company -- a staggering $39.5 billion.

I say congratulations, although Hillary Clinton begs to differ.

At the winter meeting of the Democratic National Committee, the senator from New York said, "The oil companies reported the highest profits in the history of the world. I want to take those profits, and I want to put them in an alternative energy fund."

Take? Isn't that a confiscation of private property? Author P.J. O'Rourke framed it perfectly on a recent edition of CNBC's "Kudlow & Co.": She's "Hugo Chavez in a pants suit."

And what exactly would Mrs. Clinton be taking? ExxonMobil's profits are outsized, but they come on sales of $377.5 billion, making for a profit margin of just over 10 cents on the dollar. This remains well below the profit margins of many industries, including banking and biotech, where the margins nearly double those in the energy sector. The numbers are big, but the returns are middling.

And since sales and profits in the energy sector depend on the world price of oil, it's feast or famine for these businesses. In the last decade, oil prices have fluctuated from about $10 a barrel to nearly $80. Talk about volatile pricing.

Indeed, the energy business isn't easy. Still, ExxonMobil remains one of the best-run companies in America. Many professional investors believe it's the best-run company. In his recent book, "The Future for Investors," Jeremy Siegel of the University of Pennsylvania reveals that Exxon has been one of the top three stocks in terms of return on investment over the past 50-odd years. John D. Rockefeller Sr., looking down from on high, must be pleased.

But it's also a tax-burdened company. While ExxonMobil recorded record profits last year, it also paid $100.7 billion in taxes -- two-and-half times its net profits, according to the Tax Foundation. In fact, over the past 25 years, federal and state governments took $397 billion from the largest oil companies and an additional $1.1 trillion in taxes at the pump. In today's dollars, that's $2.2 trillion.

This isn't an isolated problem. The prevailing 35 percent corporate tax rate takes a monster bite from all U.S. businesses. Moreover, our business taxes are far too high in relation to the rest of the world. Believe it or not, the corporate tax rate is lower in France than it is in the United States.

Along with slow-growing Japan, the United States has the highest marginal tax rate on corporate profits of any of the developed countries. Think of this: Germany is cutting its corporate tax rate to 15 percent from 25 percent. And if frontrunner Nicolas Sarkozy wins the French presidential election this spring, he plans to slash France's corporate tax burden. Meanwhile, we'll still be taking our best companies behind the barn and shooting them.

The bottom line here is that our economic system is all about free-market capitalism, and at the core of that system is profit. Profit isn't a dirty word. From profits spring the abundance of this great country. Profits are the mother's milk of stocks and the economy. Expanding profits provide businesses the resources to enlarge production operations and hire additional workers. This, in turn, is how incomes are created -- wages that are then spent by American families.

Why can't liberals grasp this?

When the government meddles in the market and taxes companies more -- when it sticks its nose where it doesn't belong -- it ends up hurting not just businesses, but all individuals. Taxing profits more means taxing families more. Taxing profits moreleads to smaller wage gains for middle-income workers. When you tax American companies more, the American workforce is paid less. And when you tax American energy companies more, they produce less energy. That means higher prices for gas at the pump and heating fuel at home. This may enrich Uncle Sam, but it comes at the expense of ordinary folks.

Washington economist Kevin Hassett has shown that the U.S. workforce bears a full 70 percent of the cost of corporate taxes. So, if folks are indeed worried about wage inequality, they should be lobbying their congressional representatives to cut corporate taxes in order to increase worker wages.

The truth is, when you tax profits more you undermine the American work ethic and the incentive structure that goes along with it. In fact, you demoralize the very system that has made this country great. It's the people who ultimately pay the corporate profits tax -- and that includes shareholders, pensioners and other retirees. Business taxes should be headed down, not up.

Punish ExxonMobil for turning a healthy profit? Take those profits? Do that, and you punish the American worker and the entire economy, too.

Lawrence Kudlow is a former Reagan economic advisor, a syndicated columnist, and the co-host of CNBC's Kudlow & Company. Visit his blog, Kudlow's Money Politics.

THE AMAZING AIR PELOSI MESS

I thought this woman was supposed to be a shrewd political operative. Sure isn't looking that way lately. How could a super-political like Nancy Pelosi let this kafuffle over how she gets back and forth to her home district get so out of control?

The story is really a bit pathetic, and it just won't go away! Nancy Pelosi wants the Pentagon to fly her back and forth between Washington and San Francisco. Fine, that' s fair. Republican Speaker Dennis Hastert had access to a Pentagon Gulfstream III to fly him back and forth to Illinois. Good enough for him, good enough for her.

But wait! Evidently that isn't good enough for her? Princess Nancy wants a bigger plane! She wants a 757! Something, I think, about being able to fly non-stop to San Francisco. Well, the G-III is fully capable of that mission ... if, that is, the airplane isn't loaded down with an entourage. But evidently that is what Pelosi wants! She wants friends, family members and other members of the California delegation to be able to fly with her! More people, less fuel. Less fuel, less range. Oops! Now she needs a 757? And don't forget her wealthy friends in the tuna industry! They might want a ride too!

She even delivered a backhanded suggestion that she was being discriminated against because she's a woman. Then she suggested that Don Rumsfeld may be behind the Pentagon's turn-down of the 757 request.

Now Pelosi says she is even said willing to fly commercial, as long as it was a direct (I think she means non-stop) flight. Here's an idea...why not take her up on that? Wait! I think I see the problem here. There are no non-stop flights between Washington-Reagan and San Francisco. That means Nancy might have to go to Dulles airport. Well ... there is one flight from Dulles to San Francisco that I could find, but then any self-respecting congressman just flat-out doesn't want to have to go to Dulles to catch a flight. Andrews Air Force Base is MUCH closer.

And then .. in the middle of this whole mess .. we have John Murtha spouting off! You remember Murtha, don't you? He's the man who has been slamming our troops in Iraq .. accusing them of killing Iraqi civilians "in cold blood." Well now this Democrat hero is dropping dark hints that funding for the Pentagon may suffer if they don't cave and hand Nancy her 757! Come on, folks. Can you believe this? We have a Democrat congressman ... a congressman that was being considered for the position of House Majority Leader ... virtually threatening the our military with a loss of funding if they don't give his benefactor, Nancy Pelosi, a nice plush 757 to fly back and forth from DC to San Francisco!

Imagine how much fun this is all going to be when they increase their control of the Congress and get The Hildabeast in the White House!

SENATOR HILLARY VERSUS HILLARY FOR PRESIDENT

by Amanda B. Carpenter

Sen. Barack Obama (D.-Ill.) has the star power and the solid anti-war credentials to be the liberal's golden child through the 2008 election. So, when he announced he would seek the White House in 2008 on January 15, Sen. Hillary Clinton (D.-N.Y.) panicked and declared she was "in it to win it" five days later.

She immediately drove her campaign far left to entice any supporters who might be attracted to Obama or the likes of John Edwards, who announced his bid on December 27, 2006 and has been publicly opposed to the war since November 2005.

Hillary has carefully articulated a hawkish persona in the Senate that began when she committed her support to President Bush by voting in favor of the 2002 Iraq War Resolution.

She kept the image up until late 2005. Then, Hillary began to moderate her war position by saying she only voted for the war because she was told President Bush was going to conduct it through the United Nations.

The progression Hillary made toward the anti-war base had been subtle, but after her campaign announcement it instantly accelerated hard left.

In a press conference as late as January 17, Hillary said she would not support a timetable to get out of Iraq. Seven days after her presidential announcement, on January 27, she demanded that President Bush "extricate the country before he leaves office."

After that, she took her leftward march to Iowa. At a January 29 campaign stop in Des Moines Hillary said President Bush had "misused" her vote. Then, she marched left at the Democrat National Committee's Winter Meeting on February 5. Standing alongside the other 2008 Democrat candidates she said, “If I hd been president in 2002, I would not have started this war."

Hillary's contradictions on the war are too numerous and complicated to summarize in single slogan about footwear, as Republicans did against John Kerry in 2004. Her flip-flop collection rivals anything from Imelda Marco's closet.

In classic Clinton fashion, Hillary's strategy for the White House will rely on triangulation and obfuscation.

But the difference between Senator Hillary and Hillary for President on the Iraq war is dramatic. Below are public statements she before and after her official declaration she would to pursue the Democratic nomination for President.

Senator Hillary	Hillary for President
"In the 4 years since the inspectors, intelligence reports show that Saddam Hussein has worked to rebuild his chemical and biological weapons stock, his missile delivery capability, and his nuclear program. He has also given aid, comfort, and sanctuary to terrorists, including al Qaeda members, though there is apparently no evidence of his involvement in the terrible events of September 11, 2001….It is clear,however, that if left unchecked, Saddam Hussein will continue to increase his capability to wage biological and chemical warfare and will keep trying to develop nuclear weapons. Should he succeed in that endeavor, he could alter the political and security landscape of the Middle East which, as we know all too well, affects American security. -- October 10, 2002 Senate floor before her vote in favor of authorizing the president to go to war in Iraq.	"If we had known then what we knew now, there never would have been a vote and I never would have voted to give this President that authority…. the President took my vote and other votes and basically misused the authority we gave him." -- Campaigning in Iowa, January 27, 2007
" I was one who supported giving President Bush the authority, if necessary, to use force against Saddam Hussein. I believe that that was the right vote." - December 15, 2003 before the Council on Foreign Relations "The consensus was the same, from the Clinton Administration to the Bush Administration. It was the same intelligence belief that our allies and friends around the world shared about weapons of mass destruction." –In response to a question from Larry King that asked if she was “fooled” about Saddam’s possession of WMD, April 20, 2004	"If I had been president in 2002, I would not have started this war." -- DNC Winter meeting, February 2, 2007
"I don't regret giving the President the authority because at the time it was in the context of weapons of mass destruction, grave threats to the United States, and clearly, Saddam Hussein had been a real problem for the international community for more than a decade." -- Larry King Live April 20, 2004	"I said that we should not go to war unless we have allies, so he took the authority that I and others gave him, and he misused it. And I regret that deeply." -- Des Moines High School in Iowa, January 28, 2007
"I'm not going to support a specific deadline." -- Hillary responding to a question from a reporter that asked if she would support withdrawing all troops by early 2008. Press conference January 17, 2007	"The President is determined to move forward on a plan that won't succeed. He should extricate the country before he leaves office. -- Campaigning in Iowa, January 28, 2007

NANCY PELOSI'S WINGS CLIPPED

Well, it turns out Nancy Pelosi has been limited in her jet size request by the Department of Defense. They aren't giving her as big of a plane as she requested. She went on Greta Van Sustern's show yesterday to defend herself, saying the transportation wasn't her idea and she was willing to fly commercial. But she did keep saying she didn't blame the president. Evidently he told her personally that he would get her whatever she needed for her security.

The official word from the Pentagon on the issue is that Pelosi will get the same thing her predecessor got...a smaller commuter jet, one that will require refueling between D.C. and San Francisco. Nancy is not happy about this. She was really looking for a non-stop solution. And that's not all, the military will also be monitoring who gets to fly home with The Speaker at taxpayer's expense. So much for the friends and family package, huh?

On Fox News yesterday, Pelosi said she would be willing to fly commercial. Why not hold her to that? After all, if she doesn't like the arrangements being provided by the military, she could always hop on a non-stop flight from Reagan National home.

As one congressional source put it, "non-stop service is not guaranteed." Priceless.

I do want some credit here for not making any broom references.

Wait a minute .. .I just made a broom reference, didn't I?

CARTER CRITICIZES SIMON WIESENTHAL CENTER

When last we heard from Jimmy Carter, he was trying to limit the damage from his one-sided book. According to this article, he’s criticizing the Simon Wiesenthal Center, saying that they’ve slandered him. Here’s Carter’s shot:

“I don’t believe Simon Wiesenthal would have resorted to falsehood and slander to raise funds,” Carter wrote last month in a handwritten letter to the head of the human rights center that bears the name of the late Holocaust survivor and Nazi hunter. The petition does not require payment to be sent, though Carter’s letter suggests it is being used as a fundraising tool.

Rabbi Marvin Hier replied:

“I believe that Simon Wiesenthal would have been as outraged by your book, ‘Palestine: Peace Not Apartheid,’ as I was,” Rabbi Marvin Hier, dean and founder of the Los Angeles-based Simon Wiesenthal Center, wrote in a Feb. 2 response to Carter.

Considering all the controversy surrounding the petition, let’s look at the petition itself and determine if it has merit.

Here are some of President Carter’s key allegations in Palestine: Peace Not Apartheid:Israel’s “occupation and colonialization” of the West Bank and Gaza is the reason there is no peace.

FACT: President Carter deliberately overlooks that in 2000, Israeli Prime Minister Ehud Barak went to Camp David and offered Yassir Arafat 95% of the West Bank, 100% of Gaza and part of the Old City of Jerusalem for a Palestinian State, along with $30 billion in compensation for Palestinian refugees. Arafat’s response: launching the bloody Intifada which targeted innocent civilians in restaurants, malls, schools, and religious services with suicide terror attacks. Had Arafat accepted Israel’s offer at Camp David there would have long been a Palestinian State alongside Israel.

The only thing that’s controversial about that section is President Carter’s characterization of Israel’s act. Here’s the next point of the petition:

• Israel’s ‘Wall’ has virtually choked-off the Palestinian economy and in many ways is worse than South Africa’s former Apartheid system.

FACT: Israel’s temporary security fence has been an effective deterrent in thwarting unending Palestinian suicide terror attacks which have dropped over 90% since its construction. Israel has said that the fence will come down when the Palestinian terror stops. Israel is entitled to protect her citizens from outside threats in the same way as with any sovereign country. It is interesting to note that during his presidency President Carter correctly chose to continue the U.S. embargo of its Soviet-allied neighbor, Cuba because he perceived it as a continuing potential national security threat.

After people criticized Carter for using the word apartheid, Carter immediately backtracked, saying that he merely wanted to provoke a dialogue on the Palestinian-Israeli situation. It’s fair to say that the fence is perfectly justifiable from Israel’s standpoint because Palestinian terrorists were flocking into Israel like college students flock to South Beach this time of year. Nations have the right to defend themselves. It’s even in the U.N. Charter.

I strongly recommend you read the entire petition. I’ll guarantee that you’ll agree with me that the Simon Wiesenthal Center didn’t cheapshot President Carter. Rather, it’s the other way around. President Carter has perverted the truth of what’s happened during the Israeli-Palestinian war. That’s why he’s received so much criticism from so many different directions. There’s a reason why Alan Dershowitz challenged him to a debate. There’s a reason why his advisers at the Carter Center quit.

These things happened because Jimmy Carter took liberties with the truth. That’s why the Simon Wiesenthal Center took issue with his book.

MEDIA BIAS? NO WAY! (YEAH RIGHT.)

Now let's sit back a bit here and watch the media at work.

Yesterday you saw headlines in newspapers and heard many TV talking heads telling you that the Republicans had blocked debate on an anti-war resolution in the U.S. Senate. But is this the way things really happened? Just where did the media get this story? Where did the mainstream media come up with the idea that the Republicans were trying to stop the debate?

Well .. it came from a vote. A cloture vote. Republicans refused to step forward and vote for the cloture motion, so it failed. But just what is a motion for cloture? Why, it's a motion to stop debate and vote on the issue in question! The issue in question here the Democrat non-binding resolution opposing Bush's moves in Iraq.

Are you following this? There's a debate going on in the Senate. The debate is over a Democrat-inspired resolution condemning George Bush and his latest actions in Iraq. The Democrats bring a motion to the floor to stop the debate and vote on the resolution. The Republicans vote against the motion. The debate goes on ... and suddenly the left-wing media is reporting that the Republicans are trying to block debate on the Iraq war in the Senate? On what level does this make sense?

If the situation were reversed and it was the Republicans bring a cloture motion to the floor of the Senate, with the Democrats opposing the motion, you can bet your first born that the mainstream leftist press would be blaming the Republicans for trying to stifle debate in the Senate.

The truth is that the Republicans have kept the debate going ... rather than blocking it. But Harry Reid gets up there and accuses of the Republicans of trying to block debate and the media grabs Reid's slant and runs with it. But what would you expect? Reid is the Democrat leader of the Senate! Do you really expect the media to do anything other than adopt his slant?

There is more to the story. Why are the Democrats so anxious to vote on their anti-war resolution and be done with it? Because the Republicans have another resolution they want considered. It's called the Gregg resolution and it was introduced by Republican Senator Judd Gregg of New Hampshire. The Gregg resolution would state that the Senate would oppose any reduction in funding for troops in Iraq. Harry Reid called Gregg's resolution a "diversionary tactic" and refused to allow it to come to a vote. So the Republicans have in turned refused to allow the Democrats anti-war resolution to come to a vote. The Democrats are afraid that the Gregg resolution would get more votes than their favored Warner-Levin anti-war version .. and that would make them look bad.

Now once again, and all together ... "there is no liberal bias to in the mainstream media!"

Yeah .. sure.

Al Gore says that the Bush Administration is paying scientists to dispute the party line on man-made global warming. Now isn't it odd that Gore doesn't mention that many of the scientists who are preaching the party line are being paid to do so! These scientists know that as soon as they get off the man-made global warming bandwagon their funding dries up. I guess this just slipped Gore's mind.