Russia ‘moves troops, helicopters and armoured vehicles’ to its border with North Korea
‘New weapons’ displayed during military parade in North Korea to celebrate Kim Il SungA symphony orchestra played as one of Kim’s missiles hurtled into the US and revealed a smouldering Stars and Stripes flag.
Military figures watched on gleefully as uniformed troops from the Korean State Merited Chorus belted out a series of tuneless numbers.
And in a verse unlikely to make its way onto Broadway any time soon, one warbled: “Our proud Hwasong rocket blasts off” and “it flies as quickly as a flash of lightning to challenge imperialism”.
Others played trumpets as the 90s-style film saw a ballistic missile roar into America.
Accompanying it are the words: “If US imperialists move an inch toward us, we will immediately hit them with nukes.”
The bizarre video was played at the 105th birthday celebration of Kim’s late grandfather Kim Il-Sung at the weekend.
His regime had earlier that day put on a huge military procession to show off the country’s ballistic missile arsenal.
North Korea propaganda video shows US aircraft carrier being blown up
Story 2: Obama’s Iran Nuclear Agreement Legacy Heading Towards The Wastebasket? No. Certification Granted and Sanctions Suspended — All Talk–No Action — Bad Appeasement Deal Stands — Videos —
The Iran Nuclear Deal
How the Iran nuclear deal works, explained in 3 minutes
Iran and the Bomb
Published on May 12, 2014
Many countries have nuclear weapons, and many more want them. Only one, though, has its neighbors and the world terrified. That country is Iran. Why is everyone so concerned? Because the Islamic theocracy has repeatedly threatened to destroy Israel, sponsors global terrorism, and would leverage the deterrence effect of a nuclear weapon to advance their anti-Western and anti-American interests. Bret Stephens, foreign affairs columnist for the Wall Street Journal explains the one thing you really need to know in order to understand why we can’t let Iran get the bomb–they may actually use it.
The Iran Nuclear Deal Explained
The Iran Nuclear Deal Explained
Donald Trump on Iran Nuclear Agreement (C-SPAN)
Trump on Iran: ‘They will know I am not playing games’
Donald Trump on nuke deal: They are laughing at us in Iran
Sec. Rex Tillerson Warns ‘Unchecked’ Iran Could Follow Path Of North Korea | NBC Nightly News
Trump administration certifies Iran compliant with nuclear deal – donald trump news
Tillerson announces NSC will review the Iran nuclear deal
Secretary of State Rex Tillerson says Iran could be the next North Korea
Tillerson Threatens Iran: ‘The Great Destabilizer’?
Trump Shies Away From Striking Down Obama Era Iran Deal: Why It Doesn’t Matter
What’s In The Iran Nuclear Deal?
Implementation of the JCPOA: Is It Working?
Tillerson Toughens Tone on Iran After U.S. Confirms Nuclear Deal Compliance
By GARDINER HARRIS APRIL 19, 2017
President Trump at the White House on Wednesday. During the 2016 campaign, he denounced the nuclear agreement with Iran as “the worst deal ever.”CreditAl Drago/The New York Times
WASHINGTON — Secretary of State Rex W. Tillerson described a landmark Iran nuclear deal as a failure on Wednesday, only hours after the State Department said Tehran was complying with its terms. But the top United States diplomat stopped short of threatening to jettison the 2015 agreement that was brokered by world powers, or saying whether the Trump administration would punish Iran with new sanctions.
The whiplash left Republicans on Capitol Hill, who had universally excoriated the agreement to limit Iran’s nuclear program and voted against its implementation, uncertain of how to respond. Its architects, however, said they were cautiously optimistic that the deal would stay in place.
The nuclear deal “fails to achieve the objective of a non-nuclear Iran,” Mr. Tillerson said. “It only delays their goal of becoming a nuclear state.”
He said that Iran continued to threaten the United States and the rest of the world, and he announced that the Trump administration was reviewing ways to counter challenges posed by Tehran.
It was an attempt to clarify a State Department certification, issued shortly before a midnight deadline on Tuesday, that said Iran was complying with the nuclear agreement that also eased crippling international sanctions against the Islamic republic’s economy. During the 2016 campaign, President Trump denounced the agreement as “the worst deal ever,” and Vice President Pence promised to rip it up.
In a hastily called news conference at the State Department on Wednesday, Mr. Tillerson likened Iran to North Korea, whose nuclear weaponry and burgeoning missile technology is what the administration now believes is the gravest risk to world peace and security. Mr. Pence visited Seoul, South Korea, this week to declare that the United States was united with its allies to stem North Korea’s threat.
The Iran deal “represents the same failed approach to the past that brought us to the current imminent threat that we face from North Korea,” Mr. Tillerson told reporters. “The Trump administration has no intention of passing the buck to a future administration on Iran. The evidence is clear: Iran’s provocative actions threaten the United States, the region and the world.”
Once the National Security Council completes a review of the nuclear deal, Mr. Tillerson said, “we will meet the challenges Iran poses with clarity and conviction.”
Hours earlier, late on Tuesday night, Mr. Tillerson sent a terse letter to Speaker Paul D. Ryan pledging to evaluate whether earlier suspension of sanctions against Iran, as required under the terms of the nuclear agreement, “is vital to the national security interests of the United States.”
A man of few words, Mr. Tillerson has sometimes found that his cryptic remarks create more confusion than clarity among allies, friends and even adversaries. Earlier on Wednesday, Sean Spicer, the White House press secretary, offered little additional information about the Iran certification. He refused to say whether the Trump administration would add the Iran deal to a series of other stunning foreign policy reversals it has made by deciding to retain it instead of ripping it up or renegotiating the agreement as promised.
“I think part of the review, the interagency process, is to determine where Iran is in compliance with the deal and to make recommendations to the president on the path forward,” Mr. Spicer said.
The enigmatic remarks left top Republicans on Capitol Hill nonplused. Senator Tom Cotton, the Arkansas Republican who led congressional opposition to the Iran deal, said in a statement that the administration’s “certification is shaky, and it doesn’t mean that the intentions behind Iran’s nuclear program are benign.”
Senator Bob Corker, Republican of Tennessee and chairman of the Foreign Relations Committee, said the Trump administration appeared to be preparing a tougher line against Iran.
“Secretary Tillerson made clear that regardless of Iran’s technical compliance with the nuclear deal, the administration is under no illusion about the continued threat from Tehran and is prepared to work closely with Congress to push back,” Mr. Corker said in a statement on Wednesday.
Tuesday’s certification extends sanctions relief for Iran in exchange for continued constraints on its nuclear program. American sanctions, as approved by Congress, were suspended instead of revoked; they can be reimposed with the stroke of a presidential pen.
The Trump administration has given itself 90 days to complete its review, but it will need to make a series of decisions in coming weeks about whether to continue its support of the deal, which was also brokered with Britain, China, France, Germany and Russia. Those governments, along with representatives of the United States and Iran, will meet next week in Vienna to review the pact’s progress.
Mr. Trump faces a mid-May deadline, as imposed by Congress, to decide whether to continue the suspension of sanctions.
Backing away from the agreement would spur enormous consternation across Europe and in Moscow.
In their first congratulatory phone calls to Mr. Trump after his electoral victory, both President Vladimir V. Putin of Russia and Chancellor Angela Merkel of Germany emphasized the need to keep the Iran deal in place. And after her first meeting with Mr. Tillerson in February, Federica Mogherini, the European Union’s foreign minister, said the Trump administration pledged “to stick to the full strict implementation of the agreement in all its parts.”
Analysts and former government officials said it was unlikely the Trump administration would renounce the Iran agreement.
“I’m glad this deal has held up to this point, and I hope it continues to hold up,” said Wendy Sherman, a former under secretary of state who was deeply involved in negotiating terms of the deal during the Obama administration.
Robert Einhorn, a senior fellow at the Brookings Institution who was involved in Iran policy under President Barack Obama, said it was “pretty much a foregone conclusion” that Mr. Trump would keep the nuclear agreement in place.
Still, the administration has sought since its first days in office to ratchet up pressure on Iran. In January, before he resigned, Michael T. Flynn, then the national security adviser, walked into the White House briefing room and declared that the administration was “officially putting Iran on notice” after it launched a ballistic missile.
The Trump administration has returned the United States to closer ties with its traditional Arab friends in the Middle East, including Saudi Arabia and the United Arab Emirates. Part of those ties means supporting those nations, which are overwhelmingly Sunni Muslim, in their intense rivalry with Iran, a Shiite power.
By contrast, by the end of his second term, Mr. Obama had begun to view those sectarian tensions with a jaundiced eye, believing the United States should not intervene in a millennium-old religious struggle.
Earlier on Wednesday, Mr. Tillerson attended a United States-Saudi Arabia chief executive summit meeting where he declared that he was “pleased to be here today to reaffirm the very strong partnership that exists between the United States and the kingdom of Saudi Arabia.”
Mark Dubowitz, chief executive of the Foundation for Defense of Democracies, a group that sought to defeat the Iran deal, said the administration may still walk away from the agreement or renegotiate it. He contended that the administration “should not be bound by arms control agreements that are deeply flawed.”
And even Ms. Sherman shied away from predicting it will remain in place. “I’m taking this one day at a time,” she said.
Formal negotiations toward the Joint Comprehensive Plan of Action on Iran’s nuclear program began with the adoption of the Joint Plan of Action, an interim agreement signed between Iran and the P5+1 countries in November 2013. For the next twenty months, Iran and the P5+1 countries engaged in negotiations, and in April 2015 agreed on an Iran nuclear deal framework for the final agreement and in July 2015, Iran and the P5+1 agreed on the plan.
Under the agreement, Iran agreed to eliminate its stockpile of medium-enriched uranium, cut its stockpile of low-enriched uranium by 98%, and reduce by about two-thirds the number of its gas centrifuges for 13 years. For the next 15 years, Iran will only enrich uranium up to 3.67%. Iran also agreed not to build any new heavy-water facilities for the same period of time. Uranium-enrichment activities will be limited to a single facility using first-generation centrifuges for 10 years. Other facilities will be converted to avoid proliferation risks. To monitor and verify Iran’s compliance with the agreement, the International Atomic Energy Agency (IAEA) will have regular access to all Iranian nuclear facilities. The agreement provides that in return for verifiably abiding by its commitments, Iran will receive relief from U.S., European Union, and United Nations Security Council nuclear-related economic sanctions.
In 1979, the Iranian Revolution took place, and Iran’s nuclear program, which had developed some baseline capacity, fell to disarray as “much of Iran’s nuclear talent fled the country in the wake of the Revolution.” Ayatollah Ruhollah Khomeini was initially opposed to nuclear technology; and Iran engaged in a costly war with Iraq from 1980 to 1988.
Starting in the later 1980s, Iran restarted its nuclear program, with assistance from Pakistan (which entered into a bilateral agreement with Iran in 1992), China (which did the same in 1990), and Russia (which did the same in 1992 and 1995), and from the A.Q. Khan network. Iran “began pursuing an indigenous nuclear fuel cycle capability by developing a uranium mining infrastructure and experimenting with uranium conversion and enrichment.” According to the nonpartisan Nuclear Threat Initiative, “U.S. intelligence agencies have long suspected Iran of using its civilian nuclear program as a cover for clandestine weapons development.” Iran, in contrast, “has always insisted that its nuclear work is peaceful”.
In August 2002, the Paris-based National Council of Resistance of Iran, an Iranian dissident group, publicly revealed the existence of two undeclared nuclear facilities, the Arak heavy-water production facility and the Natanz enrichment facility. In February 2003, Iranian President Mohammad Khatami acknowledged the existence of the facilities and asserted that Iran had undertaken “small-scale enrichment experiments” to produce low-enriched uranium for nuclear power plants. In late February, International Atomic Energy Agency (IAEA) inspectors visited Natanz. In May 2003, Iran allowed IAEA inspectors to visit the Kalaye Electric Company, but refused to allow them to take samples, and an IAEA report the following month concluded that Iran had failed to meet its obligations under the previous agreement.
In June 2003, Iran—faced with the prospect of being referred to the UN Security Council—entered into diplomatic negotiations with France, Germany, and the United Kingdom (the EU 3). The United States refused to be involved in these negotiations. In October 2003, the Tehran Declaration was reached between Iran and the EU 3; under this declaration Iran agreed to cooperate fully with the IAEA, sign the Additional Protocol, and temporarily suspend all uranium enrichment. In September and October 2003, the IAEA conducted several facility inspections. This was followed by the Paris Agreement in November 2004, in which Iran agreed to temporarily suspend enrichment and conversion activities, “including the manufacture, installation, testing, and operation of centrifuges, and committed to working with the EU-3 to find a mutually beneficial long-term diplomatic solution”.
In August 2005, Mahmoud Ahmadinejad, a hard-liner, was elected president of Iran. He accused Iranian negotiators who had negotiated the Paris Accords of treason. Over the next two months, the EU 3 agreement fell apart as talks over the EU 3’s proposed Long Term Agreement broke down; the Iranian government “felt that the proposal was heavy on demands, light on incentives, did not incorporate Iran’s proposals, and violated the Paris Agreement”. Iran notified the IAEA that it would resume uranium conversion at Esfahan.
In February 2006, Iran ended its voluntary implementation of the Additional Protocol and resumed enrichment at Natanz, prompting the IAEA Board of Governors to refer Iran to the UN Security Council. After the vote, Iran announced it would resume enrichment of uranium. In April 2006, Ahmadinejad announced that Iran had nuclear technology, but stated that it was purely for power generation and not for producing weapons. In June 2006, the EU 3 joined China, Russia, and the United States, to form the P5+1. The following month, July 2006, the UN Security Council passed its first resolution demanding Iran stop uranium enrichment and processing.Altogether, from 2006 to 2010, the UN Security Council subsequently adopted six resolutions concerning Iran’s nuclear program: 1696 (July 2006), 1737 (December 2006), 1747 (March 2007), 1803 (March 2008), 1835 (September 2008), and 1929 (June 2010). The legal authority for the IAEA Board of Governors referral and the Security Council resolutions was derived from the IAEA Statute and the United Nations Charter. The resolutions demanded that Iran cease enrichment activities and imposed sanctions on Iran, including bans on the transfer of nuclear and missile technology to the country and freezes on the assets of certain Iranian individuals and entities, in order to pressure the country. However, in Resolution 1803 and elsewhere the Security Council also acknowledged Iran’s rights under Article IV of the NPT, which provides for “the inalienable right … to develop research, production and use of nuclear energy for peaceful purposes”.[b]
In July 2006, Iran opened the Arak heavy water production plant, which led to one of the Security Council resolutions. In September 2009, U.S. President Barack Obama, revealed the existence of an underground enrichment facility in Fordow, near Qom saying, “Iran’s decision to build yet another nuclear facility without notifying the IAEA represents a direct challenge to the basic compact at the center of the non-proliferation regime.” Israel threatened to take military action against Iran.
In a February 2007 interview with the Financial Times, IAEA director general Mohamed ElBaradei said that military action against Iran “would be catastrophic, counterproductive” and called for negotiations between the international community and Iran over the Iranian nuclear program. ElBaradei specifically proposed a “double, simultaneous suspension, a time out” as “a confidence-building measure”, under which the international sanctions would be suspended and Iran would suspend enrichment. ElBaradei also said, “if I look at it from a weapons perspective there are much more important issues to me than the suspension of [enrichment],” naming his top priorities as preventing Iran from “go[ing] to industrial capacity until the issues are settled”; building confidence, with “full inspection” involving Iranian adoption of the Additional Protocol; and “at all costs” preventing Iran from “moving out of the [treaty-based non-proliferation] system”.
A November 2007 U.S. National Intelligence Estimate assessed that Iran “halted its nuclear weapons program” in 2003; that estimate and subsequent U.S. Intelligence Community statements also assessed that the Iranian government at the time had was “keeping open the ‘option’ to develop nuclear weapons” in the future. A July 2015 Congressional Research Service report said, “statements from the U.S. intelligence community indicate that Iran has the technological and industrial capacity to produce nuclear weapons at some point, but the U.S. government assesses that Tehran has not mastered all of the necessary technologies for building a nuclear weapon.”
In March 2013, the United States began a series of secret bilateral talks with Iranian officials in Oman, led by William Joseph Burns and Jake Sullivan on the American side and Ali Asghar Khaji on the Iranian side. In June 2013, Hassan Rouhani was elected president of Iran. Rouhani has been described as “more moderate, pragmatic and willing to negotiate than Ahmadinejad”. However, in a 2006 nuclear negotiation with European powers, Rouhani said that Iran had used the negotiations to dupe the Europeans, saying that during the negotiations, Iran managed to master the conversion of uranium yellowcake at Isfahan. The conversion of yellowcake is an important step in the nuclear fuel process. In August 2013, three days after his inauguration, Rouhani called for a resumption of serious negotiations with the P5+1 on the Iranian nuclear program. In September 2013, Obama and Rouhani had a telephone conversation, the first high-level contact between U.S. and Iranian leaders since 1979, and U.S. Secretary of State John Kerry had a meeting with Iranian foreign minister Mohammad Javad Zarif, signaling that the two countries had an opening to cooperation.
After several rounds of negotiations, on 24 November 2013, the Joint Plan of Action, an interim agreement on the Iranian nuclear program, was signed between Iran and the P5+1 countries in Geneva, Switzerland. It consisted of a short-term freeze of portions of Iran’s nuclear program in exchange for decreased economic sanctions on Iran, as the countries work towards a long-term agreement. The IAEA began “more intrusive and frequent inspections” under this interim agreement. The agreement was formally activated on 20 January 2014. On that day, the IAEA issued a report stating that Iran was adhering to the terms of the interim agreement, including stopping enrichment of uranium to 20 percent, beginning the dilution process (to reduce half of the stockpile of 20 percent enriched uranium to 3.5 percent), and halting work on the Arak heavy-water reactor.
The agreement between the P5+1+EU and Iran on the Joint Comprehensive Plan of Action (JCPOA) is the culmination of 20 months of “arduous” negotiations.
The agreement followed the Joint Plan of Action (JPA), an interim agreement between the P5+1 powers and Iran that was agreed to on 24 November 2013 at Geneva. The Geneva agreement was an interim deal, in which Iran agreed to roll back parts of its nuclear program in exchange for relief from some sanctions. This went into effect on 20 January 2014. The parties agreed to extend their talks with a first extension deadline on 24 November 2014 and a second extension deadline set to 1 July 2015.
An Iran nuclear deal framework was reached on 2 April 2015. Under this framework Iran agreed tentatively to accept restrictions on its nuclear program, all of which would last for at least a decade and some longer, and to submit to an increased intensity of international inspections under a framework deal. These details were to be negotiated by the end of June 2015. The negotiations toward a Joint Comprehensive Plan of Action were extended several times until the final agreement, the Joint Comprehensive Plan of Action, was finally reached on 14 July 2015. The JCPOA is based on the framework agreement from three months earlier.
Subsequently the negotiations between Iran and the P5+1 continued. In April 2014, a framework deal was reached at Lausanne. Intense marathon negotiations then continued, with the last session in Vienna at the Palais Coburg lasting for seventeen days. At several points, negotiations appeared to be at risk of breaking down, but negotiators managed to come to agreement. As the negotiators neared a deal, U.S. Secretary of State John Kerry directly asked Iranian Foreign Minister Mohammad Javad Zarif to confirm that he was “authorized to actually make a deal, not just by the [Iranian] president, but by the supreme leader?” Zarif gave assurances that he was.
Ultimately, on 14 July 2015, all parties agreed to a landmark comprehensive nuclear agreement. At the time of the announcement, shortly before 11:00 GMT, the agreement was released to the public.
The final agreement’s complexity shows the impact of a public letter written by a bipartisan group of 19 U.S. diplomats, experts, and others in June 2015, written when negotiations were still going on. That letter outlined concerns about the several provisions in the then-unfinished agreement and called for a number of improvements to strengthen the prospective agreement and win their support for it. After the final agreement was reached, one of the signatories, Robert J. Einhorn, a former U.S. Department of State official now at the Brookings Institution, said of the agreement: “Analysts will be pleasantly surprised. The more things are agreed to, the less opportunity there is for implementation difficulties later on.”
The final agreement is based upon (and buttresses) “the rules-based nonproliferation regime created by the Nuclear Non-Proliferation Treaty (NPT) and including especially the IAEA safeguards system.”
Souvenir signatures of lead negotiators on the cover page of the JCPOA document. The Persian handwriting on top left side is a homage by Javad Zarif to his counterparts’ efforts in the negotiations: “[I am] Sincere to Mr. Abbas [Araghchi] and Mr. Majid [Takht-Ravanchi].”
Iran’s current stockpile of low-enriched uranium will be reduced by 98 percent, from 10,000 kg to 300 kg. This reduction will be maintained for fifteen years. For the same fifteen-year period, Iran will be limited to enriching uranium to 3.67%, a percentage sufficient for civilian nuclear power and research, but not for building a nuclear weapon.However, the number of centrifuges is sufficient for a nuclear weapon, but not for nuclear power. This is a “major decline” in Iran’s previous nuclear activity; prior to watering down its stockpile pursuant to the Joint Plan of Action interim agreement, Iran had enriched uranium to near 20% (medium-enriched uranium). These enriched uranium in excess of 300 kg of up to 3.67% will be down blended to natural uranium level or be sold in return for natural uranium, and the uranium enriched to between 5% and 20% will be fabricated into fuel plates for the Tehran Research Reactor or sold or diluted to an enrichment level of 3.67%. The implementation of the commercial contracts will be facilitated by P5+1. After fifteen years, all physical limits on enrichment will be removed, including limits on the type and number of centrifuges, Iran’s stockpile of enriched uranium, and where Iran may have enrichment facilities. According to Belfer, at this point Iran could “expand its nuclear program to create more practical overt and covert nuclear weapons options”.
For ten years, Iran will place over two-thirds of its centrifuges in storage, from its current stockpile of 19,000 centrifuges (of which 10,000 were operational) to no more than 6,104 operational centrifuges, with only 5,060 allowed to enrich uranium, with the enrichment capacity being limited to the Natanz plant. The centrifuges there must be IR-1 centrifuges, the first-generation centrifuge type which is Iran’s oldest and least efficient; Iran will give up its advanced IR-2M centrifuges in this period. The non-operating centrifuges will be stored in Natanz and monitored by IAEA, but may be used to replace failed centrifuges. Iran will not build any new uranium-enrichment facilities for fifteen years.
Iran may continue research and development work on enrichment, but that work will take place only at the Natanz facility and include certain limitations for the first eight years. This is intended to keep the country to a breakout time of one year.
Iran, with cooperation from the “Working Group” (the P5+1 and possibly other countries), will modernise and rebuild the Arak heavy water research reactor based on an agreed design to support its peaceful nuclear research and production needs and purposes, but in such a way to minimise the production of plutonium and not to produce weapons-grade plutonium. The power of the redesigned reactor will not exceed 20 MWth. The P5+1 parties will support and facilitate the timely and safe construction of the Arak complex. All spent fuel will be sent out of the country. All excess heavy water which is beyond Iran’s needs for the redesigned reactor will be made available for export to the international market based on international prices. In exchange, Iran received 130 tons of uranium in 2015 and in late 2016 was approved to receive 130 tons in 2017. For 15 years, Iran will not engage in, or research on, spent fuel reprocessing. Iran will also not build any additional heavy-water reactors or accumulate heavy water for fifteen years.
Iran’s Fordow facility will stop enriching uranium and researching uranium enrichment for at least fifteen years; the facility will be converted into a nuclear physics and technology center. For 15 years, Fordow will maintain no more than 1,044 IR-1 centrifuges in six cascades in one wing of Fordow. “Two of those six cascades will spin without uranium and will be transitioned, including through appropriate infrastructure modification,” for stable radioisotope production for medical, agricultural, industrial, and scientific use. “The other four cascades with all associated infrastructure will remain idle.” Iran will not be permitted to have any fissile material in Fordow.
Iran will implement an Additional Protocol agreement which will continue in perpetuity for as long as Iran remains a party to the Nuclear Non-Proliferation Treaty (NPT). The signing of the Additional Protocol represents a continuation of the monitoring and verification provisions “long after the comprehensive agreement between the P5+1 and Iran is implemented”.
A comprehensive inspections regime will be implemented in order to monitor and confirm that Iran is complying with its obligations and is not diverting any fissile material.[c]
The IAEA will have multilayered oversight “over Iran’s entire nuclear supply chain, from uranium mills to its procurement of nuclear-related technologies“. For declared nuclear sites such as Fordow and Natanz, the IAEA will have “round-the-clock access” to nuclear facilities and will be entitled to maintain continuous monitoring (including via surveillance equipment) at such sites. The agreement authorizes the IAEA to make use of sophisticated monitoring technology, such as fiber-optic seals on equipment that can electronically send information to the IAEA; infrared satellite imagery to detect covert sites, “environmental sensors that can detect minute signs of nuclear particles”; tamper-resistant, radiation-resistant cameras. Other tools include computerized accounting programs to gather information and detect anomalies, and big data sets on Iranian imports, to monitor dual-use items.
The number of IAEA inspectors assigned to Iran will triple, from 50 to 150 inspectors.
If IAEA inspectors have concerns that Iran is developing nuclear capabilities at any non-declared sites, they may request access “to verify the absence of undeclared nuclear materials and activities or activities inconsistent with” the agreement, informing Iran of the basis for their concerns. The inspectors would only come from countries with which Iran has diplomatic relations. Iran may admit the inspectors to such site or propose alternatives to inspection that might satisfy the IAEA’s concerns. If such an agreement cannot be reached, a process running to a maximum of 24 days is triggered. Under this process, Iran and the IAEA have 14 days to resolve disagreements among themselves. If they fail to, the Joint Commission (including all eight parties) would have one week in which to consider the intelligence which initiated the IAEA request. A majority of the Commission (at least five of the eight members) could then inform Iran of the action that it would be required to take within three more days. The majority rule provision “means the United States and its European allies—Britain, France, Germany and the EU—could insist on access or any other steps and that Iran, Russia or China could not veto them”. If Iran did not comply with the decision within three days, sanctions would be automatically reimposed under the snapback provision (see below).
As a result of the above, the “breakout time”—the time in which it would be possible for Iran to make enough material for a single nuclear weapon—will increase from two to three months to one year, according to U.S. officials and U.S. intelligence.[d] An August 2015 report published by a group of experts at Harvard University‘s Belfer Center for Science and International Affairs concurs in these estimates, writing that under the JCPOA, “over the next decade would be extended to roughly a year, from the current estimated breakout time of 2 to 3 months”. The Center for Arms Control and Non-Proliferation also accepts these estimates. By contrast, Alan J. Kuperman, coordinator of the Nuclear Proliferation Prevention Project at the University of Texas at Austin, disputed the one-year assessment, arguing that under the agreement, Iran’s breakout time “would be only about three months, not much longer than it is today”.
The longer breakout time would be in place for at least ten years; after that point, the breakout time would gradually decrease. By the fifteenth year, U.S. officials state that the breakout time would return to the pre-JCPOA status quo of a few months. The Belfer Center report states: “Some contributors to this report believe that breakout time by year 15 could be comparable to what it is today—a few months—while others believe it could be reduced to a few weeks.”
Reuters reported that exemptions were granted to Iran prior to January 16, 2016. The reported purpose of the exemptions was so that sanctions relief and other benefits could start by that date, instead of Iran being in violation. The exemptions included: (a) Iran able to exceed the 300 Kg of 3.5% LEU limit in the agreement; (b) Iran able to exceed the zero Kg of 20% LEU limit in the agreement; (c) Iran to keep operating 19 “hot cells” that exceed the size limit in the agreement; (d) Iran to maintain control of 50 tonnes of heavy water that exceed the 130 tonne limit in the agreement by storing the excess at an Iran-controlled facility in Oman. In December 2016, the IAEA published decisions of the Joint Commission that spell out these clarifications of the JCPOA.
Eight years into the agreement, EU sanctions against a number of Iranian companies, individuals and institutions (such as the Revolutionary Guards) will be lifted.
The United States will “cease” application of its nuclear-related secondary sanctions by presidential action or executive waiver.Secondary sanctions are those that sanction other countries for doing business with Iran. Primary U.S. sanctions, which prohibit U.S. firms from conducting commercial transactions with few exceptions, are not altered by the JCPOA.
This step is not tied to any specific date, but is expected to occur “roughly in the first half of 2016”.
However, all U.S. sanctions against Iran related to alleged human rights abuses, missiles, and support for terrorism are not affected by the agreement and will remain in place. U.S. sanctions are viewed as more stringent, since many have extraterritorial effect (i.e., they apply worldwide). EU sanctions, by contrast, apply only in Europe.
No new UN or EU nuclear-related sanctions or restrictive measures will be imposed.
If Iran violates the agreement, any of the P5+1 can invoke a “snap back” provision, under which the sanctions “snap back” into place (i.e., are reimplemented).
Specifically, the JCPOA establishes the following dispute resolution process: if a party to the JCPOA has reason to believe that another party is not upholding its commitments under the agreement, then the complaining party may refer its complaint to the Joint Commission, a body created under the JCPOA to monitor implementation. If a complaint made by a non-Iran party is not resolved to the satisfaction of the complaining party within thirty-five days of referral, then that party could treat the unresolved issue as grounds to cease performing its commitments under the JCPOA, notify the United Nations Security Council that it believes the issue constitutes significant non-performance, or both. The Security Council would then have thirty days to adopt a resolution to continue the lifting of sanctions. If such a resolution is not adopted within those thirty days, then the sanctions of all of the pre-JCPOA nuclear-related UN Security Council resolutions would automatically be re-imposed. Iran has stated that in such a case, it would cease performing its nuclear obligations under the deal. The effect of this rule is that any permanent member of the Security Council (United States, United Kingdom, China, Russia and France) can veto any ongoing sanctions relief, but no member can veto the re-imposition of sanctions.
Snapback sanctions “would not apply with retroactive effect to contracts signed between any party and Iran or Iranian individuals and entities prior to the date of application, provided that the activities contemplated under and execution of such contracts are consistent with this JCPOA and the previous and current UN Security Council resolutions”.
Ankit Panda of The Diplomat states that this will make impossible any scenario where Iran is non-compliant with the JCPOA yet escapes re-imposition of sanctions. Mark Dubowitz of the Foundation for Defense of Democracies (which opposes the agreement) argues, however, that because the JCPOA provides that Iran could treat reinstatement of sanctions (in part or entirely) as grounds for leaving the agreement, the United States would be reluctant to impose a “snapback” for smaller violations: “The only thing you’ll take to the Security Council are massive Iranian violations, because you’re certainly not going to risk the Iranians walking away from the deal and engaging in nuclear escalation over smaller violations.”
Pictured here, Iranian foreign affairs minister and U.S. secretary of state shaking hands at the end of negotiations on 14 July 2015, Vienna. They shook hands on 26 September 2013 in the United Nations Headquarters for the first time.
Story 3: Radical Islamic Terrorist Attack In Paris, France Target Police One Officer Killed and One Wounded and One Shooter Killed and One Escaped — Videos —
One Officer Killed, One Wounded In Paris Shooting | NBC News
Trump Says Paris Shooting Looks Like Terror Attack
BREAKING Paris ISLAMIC Terrorist with Machine Gun kills police officer 2nd hurt April 20 2017 News
BREAKING!!! TERROR ATTACK IN PARIS!!!
Paris shooting ‘looks like another terrorist attack’ Trump says: ‘It just never ends’
The U.S. president addressed the assault on two police officers at a news conference Thursday afternoon in the White House’s East Room
French police say the incident involving at least two gunman was probably a ‘terrorist act’
‘We have to be strong, and we have to be vigilant, and I’ve been saying it for a long time,’ Trump said
By Francesca Chambers, White House Correspondent For Dailymail.com
PUBLISHED: 16:23 EDT, 20 April 2017 | UPDATED: 17:26 EDT, 20 April 2017
President Donald Trump says a shooting in Paris today ‘looks like another terrorist attack.’
The U.S. president addressed the assault on two police officers at a news conference Thursday afternoon.
‘It just never ends,’ he said of the terror threat from the White House’s East Room.
French police say the incident involving at least two gunman was probably a ‘terrorist act.’
President Donald Trump says a shooting in Paris today ‘looks like another terrorist attack.’
White House press secretary Sean Spicer said just before the news conference began that Trump had been briefed on the shooting that happened while he was meeting with the Italian prime minister.
‘Condolences from our country to the people for France again. It’s happening it seems,’ Trump said from the podium. ‘I just saw it as I was walking in, so it’s a terrible thing and it’s a very, very terrible thing that’s going on in the world today.’
Trump did not comment on the assault at the top of his remarks but said after he was asked for a reaction, ‘It looks like another terrorist attack, and what can you say? It just never ends.
‘We have to be strong, and we have to be vigilant, and I’ve been saying it for a long time,’ Trump told Fox News’ John Roberts.
France is in the process of holding a national election. The first round of voting begins on April 23.
A gunman wielding an AK-47 killed one police officer and wounded another today on the Champs-Elysees. The assailant was killed in the showdown with police, Paris police have said. Another suspect is believed to have been involved, as well.
Police just two days ago arrested two men in southern Marseille with weapons and explosives who were suspected of preparing an attack to disrupt the first-round of the presidential election on Sunday.
France is in a state of emergency and at its highest possible level of alert since a string of terror attacks that began in 2015 and have killed over 230 people.
Thousands of troops and armed police have been deployed to guard tourist hotspots such as the Champs Elysees or other potential targets like government buildings and religious sites.
‘Stay back, stay back!’ Police warn after shooting in Paris
Police closed off the popular avenue (pictured) after a policeman was killed during a shooting incident in the French capital
A French police officer was tonight shot dead on the Champs Elysees in Paris (pictured) – just as presidential candidates took part in a TV debate nearby
Up until now, polls showed voters more concerned about unemployment and their spending power than terrorism or security, though analysts warned this would change in the event of further bloodshed.
For weeks, centrist Emanuel Macron and National Front (FN) leader Marine Le Pen have been out in front.
Scandal-plagued conservative Francois Fillon and far-left firebrand Jean-Luc Melenchon have closed the gap substantially in the last two weeks.
Opinion polls now show there is a chance that any of the four leading candidates could reach the second-round run-off on May 7 if none of them reach a majority in this weekend’s election.
Footage potentially show s the moments after the Paris shootingPolice say the suspect was from an eastern Paris in suburb, despite ISIS naming him as a Belgian national on their Amaq news agency.
He is thought to have been known to security services for “extremist links”.
The shooter’s house in an eastern Paris suburb and other addresses are being searched by officers, a source told Reuters.
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Cops have said they are hunting a second suspect who may or may not be involved in the incident.
Local police advised people to avoid the area after shots were fired at around 9pm local time.
Witnesses said the attacker pulled up beside a stationery police car and fired through the window.
“He parked just behind the van and he got out with a Kalashnikov and I heard six gunshots,” a witness named Chelloug said.
“I thought they were firecrackers, because we all looked around the road and there was no one.
“In fact, he was hidden behind the van and shooting at the police.
Eyewitness of the Paris shooting says he heard six gun shots between police and the gunman
Two French police officers killed by gunman in Paris ‘terror’ attack”I think he hit a policeman. As soon as the policeman opened the door of the van, he fell, I think.
“As soon as we saw that, we all ran back inside (a building). We hid and I went up to the first floor and we saw them (the policeman) shoot him (the perpetrator).”
He added: ” I was afraid. I have a two year-old girl and I thought I was going to die… He shot straight at the police officer.”
President Francois Hollande said officials are “convinced” the incident is a terror attack.
Paris Prosecutor’s anti-terror office has opened an inquiry.
Eyewitness of the Paris shooting says he heard six gun shots between police and the gunman
ISIS claims it was behind Paris police shootingYvan Assioma of the police union Alliance said: “The exact circumstances are still unclear but I can confirm the tragic death of one of our colleagues. Our thoughts are very much with the family.
“One or several attackers have been shot dead by the police. Some officers were hit but the bullets were stopped by their bulletproof vests, but two were hit.
“Nothing is being ruled out for the time being, terrorism or a criminal act.”
Champs-Elysees in Paris evacuated after two police officers shot dead
French police closes traffic on Champs Elysees after shootingA Government spokesperson said: “An automatic weapon was used against police, a weapon of war.
“The shooting started shortly after 9pm, when a car stopped alongside a stationary police car.
“A man immediately got out and opened fire on the police car, fatally wounding a police officer. He also wounded a second one, it would seem very seriously.”
The shooting happened near the Métro station Franklin D Roosevelt and the Marks and Spencer store on the Champs-Elysées.
It is one of the most famous streets in the world and a busy tourist hub.
Armed police and emergency services have been spotted at the scene.
Armed officers tak e position behind a kiosk on the Champs ElyséesFrance’s President Francois Hollande has scheduled an emergency meeting following the shootings.
French Presidential candidates Marine Le Pen and Francois Fill0n have cancelled their trips tomorrow.
The shooting comes just just days ahead of France’s presidential election.
On Tuesday, days after police arrested two men in southern Marseille with weapons and explosives who were suspected of preparing an attack to disrupt the first-round of the presidential election on Sunday.
Policeman shot dead and ‘two seriously injured’ on Champs-Élysé, Paris
Police officers evacuate people off the Champs Elysees after ‘terror attack’France is in a state of emergency and at its highest possible level of alert since a string of terror attacks that began in 2015, which have killed over 230 people.
The UK Foreign Office said: “The British Embassy is in contact with local authorities and urgently seeking further information following reports of a shooting incident on the Champs-Elysees in Paris.
“You should remain vigilant and follow the advice of the local security authorities and/or your tour operator.
“If you’re in the area and it is safe to do so, contact your friends and family to tell them you are safe.”
Story 4: Republicans Return Repeal Replace Obamacare — Compromise Should Pass House by April 28, 2017 Videos —
House Republicans Close To Obamacare Repeal
Published on Apr 20, 2017
House Freedom Caucus and moderate Republicans are edging closer to a deal on repealing Obamacare. The agreement, brokered by House Freedom Caucus chairman Mark Meadows (R-NC) and Tuesday Group co-chairman Tom MacArthur (R-NJ), would allow states to eliminate Obamacare’s community rating system, a rule that prohibits health insurers from pricing health care plans based on age, gender, or health status. States that repeal Obamacare’s community rating rules would have to join a federal high-risk pool or establish a local high-risk pool to obtain the waiver.
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The developing plan from House Republicans to push forward their overhaul of the US healthcare system has one big problem: timing.
A new amendment leaked Wednesday night appears to be a compromise between the leaders of the conservative House Freedom Caucus and moderate Tuesday Group that could produce some movement on the bill in that timeframe.
But Congress faces another looming deadline by April 28: funding the federal government. If no new funding bill is passed by next Friday, parts of the federal government will shut down.
Washington is not known for multitasking, and it could be difficult to get a funding bill passed as the White House and lawmakers push to add policy proposals to the funding bill. Given the political ramifications of the issue, the shutdown fight could consume the calendar.
According to Politico, the White House and Congress are considering passage of a one-week extension on funding in order to hash out a more considered funding bill and possibly give the House time to take up the AHCA, which became colloquially known as “Trumpcare.”
Barring such an extension, however, it would be highly unlikely that the American Health Care Act moves forward before Trump’s 100th day in the Oval Office.
The full text of the proposed amendment, obtained by Politico’s Jake Sherman and Anna Palmer, states that the waiver would be granted by the federal government if the state can prove that it has an alternative to “reduce premium costs, increase the number of persons with healthcare coverage, or advance another benefit to the public interest in the state.”
Essential health benefits require insurers to cover a baseline of health procedures such as prenatal care and emergency room visits. Community rating means that insurers must charge people living in the same area the same price for insurance regardless of things such as age, gender, or preexisting conditions.
“The gist of this is that federal protections for pre-existing conditions and required benefits remain…unless a state doesn’t want them to,” tweeted Larry Levitt, senior vice president at health policy think thank The Kaiser Family Foundation on Thursday.
However, this means that the Trump administration, most likely Secretary of Health and Human Services Tom Price, would have final say on whether or not a waiver is granted.
While the deal was reportedly reached by conservative House Freedom Caucus chair Rep. Mark Meadows and moderate Tuesday Group chair Rep. Tom MacArthur, it also bears similarities to a previous deal that drew the ire of moderates for going too far in pulling back protections.
Additionally, it does not address the concerns of moderates such as the defunding of Medicaid expansion or the estimates that the Affordable Health Care Act could leave up to 24 million fewer people without health coverage over the next 10 years.
The Washington Post’s Robert Costa reported after the amendment’s outline was leaked that the GOP leadership is planning to release the exact language for the amendment later on Thursday and are targeting Wednesday for a vote on the revised bill, but that could change.
The amendment comes the day after reports that the White House was pushing for a deal to be completed by the end of next week in order to show progress during Trump’s first 100 days as president. Additionally, House Speaker Paul Ryan said in London on Wednesday that the GOP was putting the “finishing touches” on an Obamacare deal.
Passing the AHCA, even with the proposed changes, would be difficult in the short-term as Congress must also pass a bill to fund the federal government before parts of it shut down on April 28.
Mnuchin: Most significant tax code change since Reagan 9 Hours Ago | 01:19
The Trump administration is close to bringing forward “major tax reform,” Treasury Secretary Steven Mnuchin said Thursday, days after he tempered expectations for how quickly it will pass.
Mnuchin, who this week backed off of his earlier goal of passing tax reform by August, said the White House will unveil a plan “very soon.” However, the Trump administration previously missed several of its deadlines for releasing its tax plan.
In terms of timing, he said he hoped passing a tax overhaul will not “take till the end of the year.”
Mnuchin spoke at the Institute of International Finance Washington Policy Summit, where White House chief economic advisor Gary Cohn was set to appear later Thursday.
In a Financial Times interview published Monday, Mnuchin said getting a bill to President Donald Trump‘s desk before August is “highly aggressive to not realistic at this point.” He said in February that he wanted to see “very significant” tax reform passed by Congress’ August recess.
The business community has hoped Republicans can move quickly on overhauling the American tax system, a prospect that partly fueled stock market gains in the months following Trump’s election. However, political realities have tempered expectations for changes to the tax system.
Republicans attempted to pass legislation to replace the Affordable Care Act before moving to a tax reform bill. That effort failed late last month, and Mnuchin said the setback contributed to his assessment that passing a tax overhaul by August could be difficult.
Trump put the pressure back on Tuesday after Mnuchin and Cohn appeared to walk back expectations for how quickly tax reform will happen. He called out Mnuchin by name during a speech at Snap-on headquarters in Wisconsin.
“So we’re in very good shape on tax reform. We have the concept of the plan. We’re going to be announcing it very soon,” Trump said at that time. “But health care, we have to get the health care taken care of, and as soon as health care takes care of we are going to march very quickly. You’re going to watch. We’re going to surprise you. Right, Steve Mnuchin? Right?”
Even though the president sounded optimistic Tuesday, the Trump administration has set deadlines for tax policy before that have not come to pass. In late February, Trump said the tax plan was “very well finalized,” only a day after press secretary Sean Spicer said it would be released “in the next couple weeks.
Republicans have refocused on resurrecting the effort to repeal the ACA, better known as Obamacare, as they get set to return from a recess next week. House GOP leaders are trying to balance the concerns of the both the party’s conservative and moderate wings as they try to follow through on a major campaign pledge.
Mnuchin said Thursday that “whether health care gets done or health care doesn’t get done, we’re going to get tax reform done.”
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North Korea state media warns of nuclear strike if provoked as U.S. warships approach
* North Korea media warns of nuclear strike on U.S. if provoked
* U.S. warships head for Korean peninsula
* Trump says North Korea “looking for trouble”
* Russia “really worried” about possible U.S. attack on North (Adds Trump Tweet)
By Sue-Lin Wong
PYONGYANG, April 11 (Reuters) – North Korean state media on Tuesday warned of a nuclear attack on the United States at any sign of U.S. aggression as a U.S. Navy strike group steamed towards the western Pacific.
U.S. President Donald Trump, who has urged China to do more to rein in its impoverished neighbour, said in a Tweet North Korea was “looking for trouble” and the United States would “solve the problem” with or without China’s help.
Tension has escalated sharply on the Korean peninsula with talk of military action by the United States gaining traction following its strikes last week against Syria and amid concerns the reclusive North may soon conduct a sixth nuclear test.
North Korea’s official Rodong Sinmun newspaper said the country was prepared to respond to any aggression by the United States.
“Our revolutionary strong army is keenly watching every move by enemy elements with our nuclear sight focused on the U.S. invasionary bases not only in South Korea and the Pacific operation theatre but also in the U.S. mainland,” it said.
South Korean acting President Hwang Kyo-ahn warned of “greater provocations” by North Korea and ordered the military to intensify monitoring and to ensure close communication with the United States.
“It is possible the North may wage greater provocations such as a nuclear test timed with various anniversaries including the Supreme People’s Assembly,” said Hwang, acting leader since former president Park Geun-hye was removed amid a graft scandal.
Trump said in a Tweet a trade deal between China and the United States would be “far better for them if they solved the North Korea problem”.
“If China decides to help, that would be great,” he said. “If not, we will solve the problem without them!”
Trump and his Chinese counterpart, Xi Jinping, met in Florida last week and Trump pressed Xi to do more to rein in North Korea.
The North convened a Supreme People’s Assembly session on Tuesday, one of its twice-yearly sessions in which major appointments are announced and national policy goals are formally approved. It did not immediately release details.
But South Korean officials took pains to quell talk in social media of an impending security crisis or outbreak of war.
“We’d like to ask precaution so as not to get blinded by exaggerated assessment about the security situation on the Korean peninsula,” Defence Ministry spokesman Moon Sang-kyun said.
Saturday is the 105th anniversary of the birth of Kim Il Sung, the country’s founding father and grandfather of current ruler, Kim Jong Un.
A military parade is expected in the North’s capital, Pyongyang, to mark the day. North Korea often also marks important anniversaries with tests of its nuclear or missile capabilities in breach of U.N. Security Council resolutions.
Men and women in colourful outfits were singing and dancing on the streets of Pyongyang, illuminated by better lighting than that seen in previous years, apparently practising for the parade planned.
Syrian President Bashar al-Assad sent a message of congratulations to mark the event, lambasting “big powers” for their “expansionist” policy.
“The friendly two countries are celebrating this anniversary and, at the same time, conducting a war against big powers’ wild ambition to subject all countries to their expansionist and dominationist policy and deprive them of their rights to self-determination,” the North’s KCNA news agency quoted the message as saying.
The North’s foreign ministry, in a statement carried by KCNA, said the U.S. navy strike group’s approach showed America’s “reckless moves for invading had reached a serious phase”.
“We never beg for peace but we will take the toughest counteraction against the provocateurs in order to defend ourselves by powerful force of arms and keep to the road chosen by ourselves,” an unidentified ministry spokesman said.
North Korea and the rich, democratic South are technically still at war because their 1950-53 conflict ended in a truce, not a peace treaty. The North regularly threatens to destroy the South and its main ally, the United States.
“Empire” is a dirty word. Considering the behavior of many empires, that is not unreasonable. But empire is also simply a description of a condition, many times unplanned and rarely intended. It is a condition that arises from a massive imbalance of power. Indeed, the empires created on purpose, such as Napoleonic France and Nazi Germany, have rarely lasted. Most empires do not plan to become one. They become one and then realize what they are. Sometimes they do not realize what they are for a long time, and that failure to see reality can have massive consequences.
World War II and the Birth of an Empire
The United States became an empire in 1945. It is true that in the Spanish-American War, the United States intentionally took control of the Philippines and Cuba. It is also true that it began thinking of itself as an empire, but it really was not. Cuba and the Philippines were the fantasy of empire, and this illusion dissolved during World War I, the subsequent period of isolationism and the Great Depression.
The genuine American empire that emerged thereafter was a byproduct of other events. There was no great conspiracy. In some ways, the circumstances of its creation made it more powerful. The dynamic of World War II led to the collapse of the European Peninsula and its occupation by the Soviets and the Americans. The same dynamic led to the occupation of Japan and its direct governance by the United States as a de facto colony, with Gen. Douglas MacArthur as viceroy.
The United States found itself with an extraordinary empire, which it also intended to abandon. This was a genuine wish and not mere propaganda. First, the United States was the first anti-imperial project in modernity. It opposed empire in principle. More important, this empire was a drain on American resources and not a source of wealth. World War II had shattered both Japan and Western Europe. The United States gained little or no economic advantage in holding on to these countries. Finally, the United States ended World War II largely untouched by war and as perhaps one of the few countries that profited from it. The money was to be made in the United States, not in the empire. The troops and the generals wanted to go home.
But unlike after World War I, the Americans couldn’t let go. That earlier war ruined nearly all of the participants. No one had the energy to attempt hegemony. The United States was content to leave Europe to its own dynamics. World War II ended differently. The Soviet Union had been wrecked but nevertheless it remained powerful. It was a hegemon in the east, and absent the United States, it conceivably could dominate all of Europe. This represented a problem for Washington, since a genuinely united Europe — whether a voluntary and effective federation or dominated by a single country — had sufficient resources to challenge U.S. power.
The United States could not leave. It did not think of itself as overseeing an empire, and it certainly permitted more internal political autonomy than the Soviets did in their region. Yet, in addition to maintaining a military presence, the United States organized the European economy and created and participated in the European defense system. If the essence of sovereignty is the ability to decide whether or not to go to war, that power was not in London, Paris or Warsaw. It was in Moscow and Washington.
The organizing principle of American strategy was the idea of containment. Unable to invade the Soviet Union, Washington’s default strategy was to check it. U.S. influence spread through Europe to Iran. The Soviet strategy was to flank the containment system by supporting insurgencies and allied movements as far to the rear of the U.S. line as possible. The European empires were collapsing and fragmenting. The Soviets sought to create an alliance structure out of the remnants, and the Americans sought to counter them.
The Economics of Empire
One of the advantages of alliance with the Soviets, particularly for insurgent groups, was a generous supply of weapons. The advantage of alignment with the United States was belonging to a dynamic trade zone and having access to investment capital and technology. Some nations, such as South Korea, benefited extraordinarily from this. Others didn’t. Leaders in countries like Nicaragua felt they had more to gain from Soviet political and military support than in trade with the United States.
The United States was by far the largest economic power, with complete control of the sea, bases around the world, and a dynamic trade and investment system that benefitted countries that were strategically critical to the United States or at least able to take advantage of it. It was at this point, early in the Cold War, that the United States began behaving as an empire, even if not consciously.
The geography of the American empire was built partly on military relations but heavily on economic relations. At first these economic relations were fairly trivial to American business. But as the system matured, the value of investments soared along with the importance of imports, exports and labor markets. As in any genuinely successful empire, it did not begin with a grand design or even a dream of one. Strategic necessity created an economic reality in country after country until certain major industries became dependent on at least some countries. The obvious examples were Saudi Arabia or Venezuela, whose oil fueled American oil companies, and which therefore — quite apart from conventional strategic importance — became economically important. This eventually made them strategically important.
As an empire matures, its economic value increases, particularly when it is not coercing others. Coercion is expensive and undermines the worth of an empire. The ideal colony is one that is not at all a colony, but a nation that benefits from economic relations with both the imperial power and the rest of the empire. The primary military relationship ought to be either mutual dependence or, barring that, dependence of the vulnerable client state on the imperial power.
This is how the United States slipped into empire. First, it was overwhelmingly wealthy and powerful. Second, it faced a potential adversary capable of challenging it globally, in a large number of countries. Third, it used its economic advantage to induce at least some of these countries into economic, and therefore political and military, relationships. Fourth, these countries became significantly important to various sectors of the American economy.
Limits of the American Empire
The problem of the American Empire is the overhang of the Cold War. During this time, the United States expected to go to war with a coalition around it, but also to carry the main burden of war. When Operation Desert Storm erupted in 1991, the basic Cold War principle prevailed. There was a coalition with the United States at the center of it. After 9/11, the decision was made to fight in Afghanistan and Iraq with the core model in place. There was a coalition, but the central military force was American, and it was assumed that the economic benefits of relations with the United States would be self-evident. In many ways, the post-9/11 wars took their basic framework from World War II. Iraq War planners explicitly discussed the occupation of Germany and Japan.
No empire can endure by direct rule. The Nazis were perhaps the best example of this. They tried to govern Poland directly, captured Soviet territory, pushed aside Vichy to govern not half but all of France, and so on. The British, on the other hand, ruled India with a thin layer of officials and officers and a larger cadre of businessmen trying to make their fortunes. The British obviously did better. The Germans exhausted themselves not only by overreaching, but also by diverting troops and administrators to directly oversee some countries. The British could turn their empire into something extraordinarily important to the global system. The Germans broke themselves not only on their enemies, but on their conquests as well.
The United States emerged after 1992 as the only global balanced power. That is, it was the only nation that could deploy economic, political and military power on a global basis. The United States was and remains enormously powerful. However, this is very different from omnipotence. In hearing politicians debate Russia, Iran or Yemen, you get the sense that they feel that U.S. power has no limits. There are always limits, and empires survive by knowing and respecting them.
The primary limit of the American empire is the same as that of the British and Roman empires: demographic. In Eurasia — Asia and Europe together — the Americans are outnumbered from the moment they set foot on the ground. The U.S. military is built around force multipliers, weapons that can destroy the enemy before the enemy destroys the relatively small force deployed. Sometimes this strategy works. Over the long run, it cannot. The enemy can absorb attrition much better than the small American force can. This lesson was learned in Vietnam and reinforced in Iraq and Afghanistan. Iraq is a country of 25 million people. The Americans sent about 130,000 troops. Inevitably, the attrition rate overwhelmed the Americans. The myth that Americans have no stomach for war forgets that the United States fought in Vietnam for seven years and in Iraq for about the same length of time. The public can be quite patient. The mathematics of war is the issue. At a certain point, the rate of attrition is simply not worth the political ends.
The deployment of a main force into Eurasia is unsupportable except in specialized cases when overwhelming force can be bought to bear in a place where it is important to win. These occasions are typically few and far between. Otherwise, the only strategy is indirect warfare: shifting the burden of war to those who want to bear it or cannot avoid doing so. For the first years of World War II, indirect warfare was used to support the United Kingdom and the Soviet Union against Germany.
There are two varieties of indirect warfare. The first is supporting native forces whose interests are parallel. This was done in the early stages of Afghanistan. The second is maintaining the balance of power among nations. We are seeing this form in the Middle East as the United States moves between the four major regional powers — Iran, Saudi Arabia, Israel and Turkey — supporting one then another in a perpetual balancing act. In Iraq, U.S. fighters carry out air strikes in parallel with Iranian ground forces. In Yemen, the United States supports Saudi air strikes against the Houthis, who have received Iranian training.
This is the essence of empire. The British saying is that it has no permanent friends or permanent enemies, only permanent interests. That old cliche is, like most cliches, true. The United States is in the process of learning that lesson. In many ways the United States was more charming when it had clearly identified friends and enemies. But that is a luxury that empires cannot afford.
Building a System of Balance
We are now seeing the United States rebalance its strategy by learning to balance. A global power cannot afford to be directly involved in the number of conflicts that it will encounter around the world. It would be exhausted rapidly. Using various tools, it must create regional and global balances without usurping internal sovereignty. The trick is to create situations where other countries want to do what is in the U.S. interest.
This endeavor is difficult. The first step is to use economic incentives to shape other countries’ behavior. It isn’t the U.S. Department of Commerce but businesses that do this. The second is to provide economic aid to wavering countries. The third is to provide military aid. The fourth is to send advisers. The fifth is to send overwhelming force. The leap from the fourth level to the fifth is the hardest to master. Overwhelming force should almost never be used. But when advisers and aid do not solve a problem that must urgently be solved, then the only type of force that can be used is overwhelming force. Roman legions were used sparingly, but when they were used, they brought overwhelming power to bear.
The Responsibilities of Empire
I have been deliberately speaking of the United States as an empire, knowing that this term is jarring. Those who call the United States an empire usually mean that it is in some sense evil. Others will call it anything else if they can. But it is helpful to face the reality the United States is in. It is always useful to be honest, particularly with yourself. But more important, if the United States thinks of itself as an empire, then it will begin to learn the lessons of imperial power. Nothing is more harmful than an empire using its power carelessly.
It is true that the United States did not genuinely intend to be an empire. It is also true that its intentions do not matter one way or another. Circumstance, history and geopolitics have created an entity that, if it isn’t an empire, certainly looks like one. Empires can be far from oppressive. The Persians were quite liberal in their outlook. The American ideology and the American reality are not inherently incompatible. But two things must be faced: First, the United States cannot give away the power it has. There is no practical way to do that. Second, given the vastness of that power, it will be involved in conflicts whether it wants to or not. Empires are frequently feared, sometimes respected, but never loved by the rest of the world. And pretending that you aren’t an empire does not fool anyone.
The current balancing act in the Middle East represents a fundamental rebalancing of American strategy. It is still clumsy and poorly thought out, but it is happening. And for the rest of the world, the idea that the Americans are coming will become more and more rare. The United States will not intervene. It will manage the situation, sometimes to the benefit of one country and sometimes to another.
Tension between the two sides continued. Kim Il-sung remained in power until his death in 1994. He developed a pervasive personality cult and steered the country on an independent course in accordance with the principle of Juche (or self-reliance). However, with natural disasters and the collapse of the Soviet Bloc in 1991, North Korea went into a severe economic crisis. Kim Il-sung’s son, Kim Jong-il, succeeded him, and was in turn succeeded by his son, Kim Jong-un. Amid international alarm, North Korea developed nuclear missiles.
Northern Korea before the division
From 1910 to the end of World War II, Korea was under Japanese rule. Most Koreans were peasants engaged in subsistence farming. In the 1930s, Japan developed mines, hydro-electric dams, steel mills, and manufacturing plants in northern Korea and neighboring Manchuria. The Korean industrial working class expanded rapidly, and many Koreans went to work in Manchuria. As a result, 65% of Korea’s heavy industry was located in the north, but, due to the harshness of the terrain, only 37% of its agriculture.
A Korean guerrilla movement emerged in the mountainous interior and in Manchuria, harassing the Japanese imperial authorities. One of the most prominent guerrilla leaders was the Communist Kim Il-sung.
Northern Korea had very little exposure to modern, Western ideas. One partial exception of this was the penetration of religion. Since the arrival of missionaries in the late nineteenth century, the northwest of Korea, and Pyongyang in particular, had been a stronghold of Christianity.
At the Tehran Conference in November 1943 and the Yalta Conference in February 1945, the Soviet Union promised to join its allies in the Pacific War within three months of victory in Europe. On August 8, 1945, after three months to the day, the Soviet Union declared war on Japan. Soviet troops advanced rapidly, and the US government became anxious that they would occupy the whole of Korea. On August 10, the US government decided to propose the 38th parallel as the dividing line between a Soviet occupation zone in the north and a US occupation zone in the south. The parallel was chosen as it would place the capital Seoul under American control. The division placed sixteen million Koreans in the American zone and nine million in the Soviet zone. To the surprise of the Americans, the Soviet Union immediately accepted the division. The agreement was incorporated into General Order No. 1 (approved on 17 August 1945) for the surrender of Japan.
Soviet forces began amphibious landings in Korea by August 14 and rapidly took over the north-east of the country, and on August 16 they landed at Wonsan. On August 24, the Red Army reached Pyongyang. US forces did not arrive in the south until September 8.
During August, People’s Committees sprang up across Korea, affiliated with the Committee for the Preparation of Korean Independence, which in September founded the People’s Republic of Korea. When Soviet troops entered Pyongyang, they found a local People’s Committee established there, led by veteran Christian nationalist Cho Man-sik. Unlike their American counterparts, the Soviet authorities recognized and worked with the People’s Committees. By some accounts, Cho Man-sik was the Soviet government’s first choice to lead North Korea.
On September 19, Kim Il-sung and 36 other Korean Red Army officers arrived in Wonsan. They had fought the Japanese in Manchuria in the 1930s but had lived in the USSR and trained in the Red Army since 1941. On October 14, Soviet authorities introduced Kim to the North Korean public as a guerrilla hero.
In December 1945, at the Moscow Conference, the Soviet Union agreed to a US proposal for a trusteeship over Korea for up to five years in the lead-up to independence. Most Koreans demanded independence immediately, but Kim and the other Communists supported the trusteeship under pressure from the Soviet government. Cho Man-sik opposed the proposal at a public meeting on January 4, 1946, and disappeared into house arrest. On February 8, 1946, the People’s Committees were reorganized as Interim People’s Committees dominated by Communists. The new regime instituted popular policies of land redistribution, industry nationalization, labor law reform, and equality for women.
Kim established the Korean People’s Army (KPA) aligned with the Communists, formed from a cadre of guerrillas and former soldiers who had gained combat experience in battles against the Japanese and later Nationalist Chinese troops. From their ranks, using Soviet advisers and equipment, Kim constructed a large army skilled in infiltration tactics and guerrilla warfare. Before the outbreak of the Korean War, Joseph Stalin equipped the KPA with modern medium tanks, trucks, artillery, and small arms. Kim also formed an air force, equipped at first with ex-Soviet propeller-driven fighter and attack aircraft. Later, North Korean pilot candidates were sent to the Soviet Union and China to train in MiG-15 jet aircraft at secret bases.
In 1946, a sweeping series of laws transformed North Korea on Stalinist lines. The “land to the tiller” reform redistributed the bulk of agricultural land to the poor and landless peasant population, effectively breaking the power of the landed class. This was followed by a “Labor Law”, a “Sexual Equality Law”, and a “Nationalisation of Industry, Transport, Communications and Banks Law”.
As negotiations with the Soviet Union on the future of Korea failed to make progress, the US took the issue to the United Nations in September 1947. In response, the UN established the United Nations Temporary Commission on Korea to hold elections in Korea. The Soviet Union opposed this move. In the absence of Soviet co-operation, it was decided to hold UN-supervised elections in the south only. In April 1948, a conference of organizations from the North and the South met in Pyongyang, but conference produced no results. The southern politicians Kim Koo and Kim Kyu-sik attended the conference and boycotted the elections in the South. Both men were posthumously awarded the National Reunification Prize by North Korea. The elections were held in South Korea on May 10, 1948. On August 15, the Republic of Korea formally came into existence. A parallel process occurred in North Korea. A new Supreme People’s Assembly was elected in August 1948, and on September 3 a new constitution was promulgated. The Democratic People’s Republic of Korea (DPRK) was proclaimed on September 9, with Kim as premier. On October 12, the Soviet Union declared that Kim’s regime was the only lawful government on the peninsula. On December 12, 1948, the United Nations General Assembly accepted the report of UNTCOK and declared the Republic of Korea to be the “only lawful government in Korea”.
The consolidation of Syngman Rhee‘s government in the South with American military support and the suppression of the October 1948 insurrection ended North Korean hopes that a revolution in the South could reunify Korea, and from early 1949 Kim Il-sung sought Soviet and Chinese support for a military campaign to reunify the country by force. The withdrawal of most U.S. forces from South Korea in June 1949 left the southern government defended only by a weak and inexperienced South Korean army. The southern régime also had to deal with a citizenry of uncertain loyalty. The North Korean army, by contrast, had benefited from the Soviet Union‘s WWII-era equipment, and had a core of hardened veterans who had fought either as anti-Japanese guerrillas or alongside the Chinese Communists. In 1949 and 1950 Kim traveled to Moscow with the South Korean Communist leader Pak Hon-yong to raise support for a war of reunification.
InitiallyJoseph Stalin rejected Kim Il-sung’s requests for permission to invade the South, but in late 1949 the Communist victory in China and the development of Soviet nuclear weapons made him re-consider Kim’s proposal. In January 1950, after China’s Mao Zedong indicated that the People’s Republic of China would send troops and other support to Kim, Stalin approved an invasion. The Soviets provided limited support in the form of advisers who helped the North Koreans as they planned the operation, and Soviet military instructors to train some of the Korean units. However, from the very beginning Stalin made it clear that the Soviet Union would avoid a direct confrontation with the U.S. over Korea and would not commit ground forces even in case of major military crisis. The stage was set for a civil war between the two rival régimes on the Korean peninsula.
For over a year before the outbreak of war, the two sides had engaged in a series of bloody clashes along the 38th parallel, especially in the Ongjin area on the west coast. On June 25, 1950, claiming to be responding to a South Korean assault on Ongjin, the Northern forces launched an amphibious offensive all along the parallel. Due to a combination of surprise and military superiority, the Northern forces quickly captured the capital Seoul, forcing Syngman Rhee and his government to flee. By mid-July North Korean troops had overwhelmed the South Korean and allied American units and forced them back to a defensive line in south-east South Korea known as the Pusan Perimeter. During its brief occupation of southern Korea, the DPRK regime initiated radical social change, which included the nationalisation of industry, land reform, and the restoration of the People’s Committees.According to the captured US General William F. Dean, “the civilian attitude seemed to vary between enthusiasm and passive acceptance”.
The United Nations condemned North Korea’s actions and approved an American-led intervention force to defend South Korea. In September, UN forces landed at Inchon and retook Seoul. Under the leadership of US General Douglas Macarthur, UN forces pushed north, reaching the Chinese border. According to Bruce Cumings, the North Korean forces were not routed, but managed a strategic retreat into the mountainous interior and into neighboring Manchuria. Kim Il-sung’s government re-established itself in a stronghold in Chagang Province. In late November, Chinese forces entered the war and pushed the UN forces back, retaking Pyongyang in December 1950 and Seoul in January 1951. According to Bruce Cumings, the Korean People’s Army played an equal part in this counterattack. UN forces managed to retake Seoul for South Korea. The war essentially became a bloody stalemate for the next two years.
2012 rehearsal in Pyongyang for Victory Day, marking the end of the war
American bombing included the use of napalm against populated areas and the destruction of dams and dykes, which caused devastating floods. China and North Korea also alleged the US was deploying biological weapons. As a result of the bombing, almost every substantial building and much of the infrastructure in North Korea was destroyed. The North Koreans responded by building homes, schools, hospitals, and factories underground. Economic output in 1953 had fallen by 75-90% compared with 1949.
While the bombing continued, armistice negotiations, that had commenced in July 1951, wore on. North Korea’s lead negotiator was General Nam Il. The Korean Armistice Agreement was signed on July 27, 1953. A ceasefire followed, but there was no peace treaty, and hostilities continued at a lower intensity.
Despite the failure of his attempt at unifying the nation under his rule, Kim Il-sung considered the war a victory in the sense that he remained in power. As a result, the North Korean media made the most of it by focusing entirely on the defeats suffered by the US and UN forces during the failed invasion of North Korea in late 1950. The armistice was celebrated in Pyongyang with a military parade in which Kim declared: “Despite their best efforts, the imperialist invaders were defeated with great loss in men and material.”
Kim began gradually consolidating his power. Up to this time, North Korean politics were represented by four factions: the Yan’an faction, made up of returnees from China; the “Soviet Koreans” who were ethnic Koreans from the USSR; native Korean communists led by Pak Hon-yong; and Kim’s Kapsan group who had fought guerrilla actions against Japan in the 1930s.
When the Worker’s Party Central Committee plenum opened on 30 August 1953 Choe Chang-ik made a speech attacking Kim for concentrating the power of the party and the state in his own hands as well as criticising the party line on industrialisation which ignored widespread starvation among the North Korean people. However, Kim neutralised the attack on him by promising to moderate the regime, promises which were never kept. The majority in the Central Committee voted to support Kim and also voted in favour of expelling Choe and Pak Hon-yong from the Central Committee. Eleven of Kim’s opponents were convicted in a show trial. It is believed that all were executed. A major purge of the KWP followed, with members originating from South Korea being expelled.
Pak Hon-yong, party vice chairman and Foreign Minister of the DPRK, was blamed for the failure of the southern population to support North Korea during the war, was dismissed from his positions in 1953, and was executed after a show-trial in 1955. Most of the South Korean leftists and communist sympathizers who defected to the North in 1945–1953 were also accused of espionage and other crimes, and subsequently killed, imprisoned, or exiled to remote agricultural and mining villages. Potential rivals from other groups such as Kim Tu-bong were also purged.
The Party Congress in 1956 indicated the transformation that the party had undergone. Most members of other factions had lost their positions of influence. More than half the delegates had joined after 1950, most were under 40 years old, and most had limited formal education.
In February 1956, Soviet leader Nikita Khrushchev made a sweeping denunciation of Stalin, which sent shock waves throughout the Communist world. Encouraged by this, members of the party leadership in North Korea began to criticize Kim’s dictatorial leadership, personality cult, and Stalinist economic policies. They were defeated by Kim at the August Plenum of the party. By 1960, 70 per cent of the members of the 1956 Central Committee were no longer in politics.
Kim Il-sung had initially been criticized by the Soviets during a previous 1955 visit to Moscow for practicing Stalinism and a cult of personality, which was already growing enormous. The Korean ambassador to the USSR, Li Sangjo, a member of the Yan’an faction, reported that it had become a criminal offense to so much as write on Kim’s picture in a newspaper and that he had been elevated to the status of Marx, Lenin, Mao, and Stalin in the communist pantheon. He also charged Kim with rewriting history to appear as if his guerrilla faction had single-handedly liberated Korea from the Japanese, completely ignoring the assistance of the Chinese Communist Party. In addition, Li stated that in the process of agricultural collectivization, grain was being forcibly confiscated from the peasants, leading to “at least 300 suicides” and that Kim made nearly all major policy decisions and appointments himself. Li reported that over 30,000 people were in prison for completely unjust and arbitrary reasons as trivial as not printing Kim Il-sung’s portrait on sufficient quality paper or using newspapers with his picture to wrap parcels. Grain confiscation and tax collection were also conducted forcibly with violence, beatings, and imprisonment. During Kim Il-sung’s Moscow visit, the Soviets recommended that he discard the personality cult, adhere to the ideas of collective leadership, remove falsified history accounts from textbooks, and work towards improving the living standards of the Korean people, which remained poor and below prewar standards. Foodstuffs during the initial postwar period were rationed and extremely expensive, as were consumer items. By comparison, South Korea, which had less of an industrial base than the DPRK, had a better food supply and was also flooded with American goods although it should be noted that the overall destruction there during the war was smaller.
In late 1968, known military opponents of North Korea’s Juche ideology such as Kim Chang-bong (minister of National Security), Huh Bong-hak (chief of the Division for Southern Intelligence) and Lee Young-ho(commander in chief of the DPRK Navy) were purged as anti-party/counter-revolutionary elements, despite their credentials as anti-Japanese guerrilla fighters in the past.
Kim’s personality cult was modeled on Stalinism and his regime originally acknowledged Stalin as the supreme leader. After Stalin’s death in 1953, however, Kim was described as the “Great Leader” or “Suryong”. As his personality cult grew, the doctrine of Juche (or self-reliance) began to displace Marxism–Leninism. At the same time the cult extended beyond Kim himself to include his family in a revolutionary blood line. In 1972, to celebrate Kim Il-sung’s birthday, the Mansu Hill Grand Monument was unveiled, including a 22-meter bronze statue of him.
Like Mao in China, Kim Il-sung refused to accept Nikita Khrushchev‘s denunciation of Stalin and continued to model his regime on Stalinist norms. At the same time, he increasingly stressed Korean independence, as embodied in the concept of Juche. Kim told Alexei Kosygin in 1965 that he was not anyone’s puppet and “We…implement the purest Marxism and condemn as false both the Chinese admixtures and the errors of the CPSU”.
Relations with China had worsened during the war. Mao Zedong criticized Kim for having started the whole “idiotic war” and for being an incompetent military commander who should have been removed from power. PLA commander Peng Dehuai was equally contemptuous of Kim’s skills at waging war.
By some analysis, Kim Il-sung remained in power partially because the Soviets turned their attention to the Hungarian Revolution of 1956 that fall. The Soviets and Chinese were unable to stop the inevitable purge of Kim’s domestic opponents or his move towards a one-man Stalinist autocracy and relations with both countries deteriorated in the former’s case because of the elimination of the pro-Soviet Koreans and the latter because of the regime’s refusal to acknowledge Chinese assistance in either liberation from the Japanese or the war in 1950-53.
Stalin continued to be honored in North Korea long after his death in 1953, and a street in Pyongyang bore his name until 1980. By contrast, neighboring Chinese leader Mao Zedong was mostly ignored and Kim Il-sung rejected most of his policies such as the Hundred Flowers Campaign and (later) the Cultural Revolution.
The captured USS Pueblo being visited by tourists in Pyongyang
Tensions between North and South escalated in the late 1960s with a series of low-level armed clashes known as the Korean DMZ Conflict. In 1966, Kim declared “liberation of the south” to be a “national duty”. In 1968, North Korean commandos launched the Blue House Raid, an unsuccessful attempt to assassinate the South Korean President Park Chung-hee. Shortly after, the US spy ship Pueblo was captured by the North Korean navy. The crew were held captive throughout the year despite American protests that the vessel was in international waters and finally released in December after a formal US apology was issued. In April 1969 North Korea shot down an EC-121 aircraft, killing everyone on board. The Nixon administration found itself unable to react at all, since the US was heavily committed in Vietnam and had no troops to spare if the situation in Korea escalated. However, the Pueblo capture and EC-121 shootdown did not find approval in Moscow, as the Soviet Union did not want a second major war to erupt in Asia. China’s response to the USS Pueblo crisis is less clear.
After Khrushchev was replaced by Leonid Brezhnev as Soviet Leader in 1964, and with the incentive of Soviet aid, North Korea strengthened its ties with the USSR. Kim condemned China’s Cultural Revolution as “unbelievable idiocy”. In turn, China’s Red Guards labelled him a “fat revisionist”. But by 1970, most of the storm clouds of the Cultural Revolution had blown away and relations with China quickly returned to normal. Chinese premier Zhou Enlai visited Pyongyang that year and apologized for the attacks made on Kim by the Red Guards. At the same time, the Soviets were again criticized by both Chinese and North Korean officials for being too soft on the United States. The Cultural Revolution was now viewed in North Korea as an excellent idea and “completely correct”.
In 1972, the first formal summit meeting between Pyongyang and Seoul was held, but the cautious talks did not lead to a lasting change in the relationship.
With the fall of South Vietnam to the North Vietnamese on April 30, 1975, Kim Il-sung began to feel that the US had shown its weakness and that reunification of Korea under his regime was finally possible. Kim visited Beijing in May 1975 in the hope of gaining political and military support for this plan to invade South Korea again, but Mao Zedong refused. Despite public proclamations of support, Mao privately told Kim that China would be unable to assist North Korea this time because of the lingering after-effects of the Cultural Revolution throughout China, and also because Mao had recently decided to restore diplomatic relations with the US. Afterwards, Kim went home empty-handed.
Reconstruction of the country after the war proceeded with extensive Chinese and Soviet assistance. Koreans with experience in Japanese industries also played a significant part.Land was collectivized between 1953 and 1958. Resistance appears to have been minimal as landlords had been eliminated by the earlier reforms or during the war.
Although developmental debates took place within the Workers’ Party of Korea in the 1950s, North Korea, like all the postwar communist states, undertook massive state investment in heavy industry, state infrastructure and military strength, neglecting the production of consumer goods.
The first Three Year Plan (1954–1956) introduced the concept of Juche or self-reliance. The first Five Year Plan (1957-1961) consolidated the collectivization of agriculture and initiated mass mobilizations campaigns: the Chollima Movement, the Chongsan-ni system in agriculture and the Taean Work System in industry. The Chollima Movement was influenced by China’s Great Leap Forward, but did not have its disastrous results.Industry was fully nationalized by 1959. Taxation on agricultural income was abolished in 1966.
North Korea was placed on a semi-war footing, with equal emphasis being given to the civilian and military economies. This was expressed in the 1962 Party Plenum by the slogan, “Arms in one hand and a hammer and sickle in the other!” At a special party conference in 1966, members of the leadership who opposed the military build-up were removed.
On the ruins left by the war, North Korea had built an industrialized command economy. Che Guevara, then a Cuban government minister, visited North Korea in 1960, and proclaimed it a model for Cuba to follow. In 1965, the British economist Joan Robinson described North Korea’s economic development as a “miracle”. As late as the 1970s, its GDP per capita was estimated to be equivalent to South Korea’s. By 1968, all homes had electricity, though the supply was unreliable. By 1972, all children from age 5 to 16 were enrolled in school, and over 200 universities and specialized colleges had been established. By the early 1980s, 60–70% of the population was urbanized.
Decline and crisis
North Korean village in the Yalu River delta
In the 1970s, expansion of North Korea’s economy, with the accompanying rise in living standards, came to an end. Compounding this was a decision to borrow foreign capital and invest heavily in military industries. North Korea’s desire to lessen its dependence on aid from China and the Soviet Union prompted the expansion of its military power, which had begun in the second half of the 1960s. The government believed such expenditures could be covered by foreign borrowing and increased sales of its mineral wealth in the international market. North Korea invested heavily in its mining industries and purchased a large quantity of mineral extraction infrastructure from abroad. It also purchased entire petrochemical, textile, concrete, steel, pulp and paper manufacturing plants from the developed capitalist world. This included a Japanese-Danish venture that provided North Korea with the largest cement factory in the world. However, following the world 1973 oil crisis, international prices for many of North Korea’s native minerals fell, leaving the country with large debts and an inability to pay them off and still provide a high level of social welfare to its people. North Korea began to default in 1974 and halted almost all repayments in 1985. As a result, it was unable to pay for Western technology.
Worsening this already poor situation, the centrally planned economy, which emphasized heavy industry had reached the limits of its productive potential in North Korea. Juche’s repeated demands that North Koreans learn to build and innovate domestically had run its course as had the ability of North Koreans to keep technological pace with other industrialized nations. By the mid to late-1970s some parts of the capitalist world, including South Korea, were creating new industries based around computers, electronics, and other advanced technology in contrast to North Korea’s Stalinist economy of mining and steel production. Migration to urban areas stalled.
Despite the emerging economic problems, the regime invested heavily on prestigious projects, such as the Juche Tower, the Nampo Dam, and the Ryugyong Hotel. In 1989, as a response to the 1988 Seoul Olympics it held the 13th World Festival of Youth and Students in Pyongyang. In fact, the grandiosity associated with the regime and its personality cult, as expressed in monuments, museums, and events, has been identified as a factor in the economic decline.
In 1984 Kim visited Moscow during a grand tour of the USSR where he met Soviet leader Konstantin Chernenko. Kim also made public visits to East Germany, Czechoslovakia, Poland, Hungary, Romania, Bulgaria and Yugoslavia. Soviet involvement in the North Korean economy increased, until 1988 when bilateral trade peaked at US$2.8 billion. In 1986, Kim met the incoming Soviet leader Mikhail Gorbachev and received a pledge of support.
However, Gorbachev’s reforms and diplomatic initiatives, the Chinese economic reforms starting in 1979, and the collapse of the Eastern Bloc from 1989 to 1991 increased North Korea’s isolation. The leadership in Pyongyang responded by proclaiming that the collapse of the Eastern Bloc demonstrated the correctness of the policy of Juche.
The collapse of the Soviet Union in 1991 deprived North Korea of its main source of economic aid, leaving China as the isolated regime’s only major ally. Without Soviet aid, North Korea’s economy went into a free-fall. By this time in the early 1990s, Kim Jong-il was already conducting most of the day-to-day activities of running of the state. Meanwhile, international tensions were rising over North Korean’s quest for nuclear weapons. Former US president Jimmy Carter made a visit to Pyongyang in June 1994 in which he met with Kim and returned proclaiming that he had resolved the crisis.
Succession by Kim Jong-il
Portraits of Kim Il-sung and his son and successor Kim Jong-il
Kim Il-sung died from a sudden heart attack on July 8, 1994, three weeks after the Carter visit. His son, Kim Jong-il, who had already assumed key positions in the government, succeeded as General-Secretary of the Korean Workers’ Party. At that time, North Korea had no secretary-general in the party nor a president. Minimal legal procedure that had been established was summarily ignored. Although a new constitution appeared to end the war-time political system, it did not completely terminate the transitional military rule. Rather it legitimized and institutionalized military rule by making the National Defense Commission (NDC) the most important state organization and its chairman the highest authority. After three years of consolidating his power, Kim Jong-il became Chairman of the NDC on October 8, 1997, a position described by the NDC as the nation’s “highest administrative authority,” and thus North Korea’s de facto head of state. His succession had been foreshadowed in 1980, when he was introduced to the public at the Sixth Party Congress. In 1982, Kim Jong-il had established himself as a leading theoretician with the publication of On the Juche Idea. In 1984, he had been officially confirmed as his father’s successor.
Meanwhile, the economy was in steep decline. In 1990-1995, foreign trade was cut in half, with the loss of subsidized Soviet oil being particularly keenly felt. The crisis came to a head in 1995 with widespread flooding that destroyed crops and infrastructure, leading to a famine that lasted till 1998. At the same time, there appeared to be little significant internal opposition to the regime. Indeed, a great many of the North Koreans fleeing to China because of famine still showed significant support for the government as well as pride in their homeland. Many of these people reportedly returned to North Korea after earning sufficient money.
In 1998 the government announced a new policy called “Songun“, or “Military First”. This suggested that the Korean People’s Army was now more powerful than the Korean Workers’ Party.
President Kim Dae-jung of South Korea actively attempted to reduce tensions between the two Koreas under the Sunshine Policy, but this produced few immediate results. Since the election of George W. Bush as the President of the United States in 2000, North Korea has faced renewed external pressure over its nuclear program, reducing the prospect of international economic assistance.
In 2002, Kim Jong-il declared that “money should be capable of measuring the worth of all commodities”, followed by some small market-oriented measures, and the creation of the Kaesong Industrial Region with transport links to South Korea was announced. Experiments are under way to allow factory managers to fire underperforming workers and give bonuses. China’s investments increased to $200 million in 2004.
On October 9, 2006, North Korea has announced that it had successfully detonated a nuclear device underground at 10:36 am local time without any radiation leak. An official at South Korea’s seismic monitoring center confirmed a magnitude-3.6 tremor felt at the time North Korea said it conducted the test was not a natural occurrence.
Additionally, North Korea was running a missile development program. In 1998, North Korea tested a Taepondong-1 Space Launch Vehicle, which successfully launched but failed to reach orbit. On July 5, 2006, they tested a Taepodong-2 ICBM that reportedly could reach the west coast of the U.S. in the 2-stage version, or the entire U.S. with a third stage. However, the missile failed shortly after launch, so it is unknown what its exact capabilities are or how close North Korea is to perfecting the technology.
North Korea’s advancements in weapons technology appear to give them leverage in ongoing negotiations with the United Nations and other countries. On February 13, 2007, North Korea signed an agreement with South Korea, the United States, Russia, China, and Japan, which stipulated North Korea would shut down itsYongbyon nuclear reactor in exchange for economic and energy assistance. However, in 2009 the North continued its nuclear test program.
Kim Jong-Il died on December 17, 2011 and was quickly succeeded by his son, Kim Jong-un. Tensions between North Korea and other countries increased due to its rocket launches and nuclear bomb testing, and UN sanctions have been tightened.
In 2015, North Korea adopted Pyongyang Standard Time (UTC+08.30), reversing the change to Japan Standard Time (UTC+9.00) which had been imposed by the Japanese Empire. As a result, North Korea was in a different time zone from South Korea.
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PUBLISHED: 02:20 EDT, 10 April 2017 | UPDATED: 10:56 EDT, 10 April 2017
President Donald Trump has scrapped the tax plan he campaigned on and is going back to the drawing board in a search for Republican consensus behind legislation to overhaul the U.S. tax system.
The administration’s first attempt to write legislation is in its early stages and the White House has kept much of it under wraps. But it has already sprouted the consideration of a series of unorthodox proposals including a drastic cut to the payroll tax, aimed at appealing to Democrats.
Some view the search for new options as a result of Trump’s refusal to set clear parameters for his plan and his exceedingly challenging endgame: reducing tax rates enough to spur faster growth without blowing up the budget deficit.
Administration officials say it’s now unlikely that a tax overhaul will meet the August deadline set by Treasury Secretary Steve Mnuchin.
Off plan: Donald Trump is abandoning the tax overhaul he campaigned on
Tough deadline: Steven Mnuchin, the Treasury Secretary who was at the table when Trump was briefed on the Syria missile strikes, had set an the August deadline for tax reform
But the ambitious pace to figure out a plan reflects Trump’s haste to move quickly past a bruising failure to broker a compromise within his own party on how to replace the health insurance law enacted under President Barack Obama.
The White House is trying to learn the lessons from health care. Rather than accepting a bill written by the lawmakers, White House officials are taking a more active role.
Administration officials have signaled that they want to pass tax legislation with only Republican votes, yet they’ve also held listening sessions with House Democrats.
White House aides say the goal is to cut tax rates sharply enough to improve the economic picture in depressed rural and industrial pockets of the country where many Trump voters live.
But the administration so far has swatted down alternative ways for raising revenues, such as a carbon tax, to offset lower rates.
Trump, who brands himself as a deal-maker, has not said which trade-offs he might accept and he has remained noncommittal on the leading blueprint, from Rep. Kevin Brady, chairman of the Ways and Means Committee.
Brady, a Republican from Texas, has proposed a border adjustment system, which would eliminate corporate deductions on imports, to raise $1 trillion over 10 years that could fund lower corporate tax rates.
But that possibility has rankled retailers who say it would lead to higher prices and threaten millions of jobs, while some lawmakers have worried that the system would violate World Trade Organization rules.
Brady has said he intends to amend the blueprint but has not spelled out how he would do so.
Other options are being shopped on Capitol Hill.
One circulating this past week would change the House Republican plan to eliminate much of the payroll tax and cut corporate tax rates. This would require a new dedicated funding source for Social Security.
The change, proposed by a GOP lobbyist with close ties to the Trump administration, would transform Brady’s plan on imports into something closer to a value-added tax by also eliminating the deduction of labor expenses.
This would bring it in line with WTO rules and generate an additional $12 trillion over 10 years, according to budget estimates.
Those additional revenues could then enable the end of the 12.4 percent payroll tax, split evenly between employers and employees, that funds Social Security, while keeping the health insurance payroll tax in place.
This approach would give a worker earning $60,000 a year an additional $3,720 in take-home pay, a possible win that lawmakers could highlight back in their districts even though it would involve changing the funding mechanism for Social Security, according to the lobbyist, who asked for anonymity to discuss the proposal without disrupting early negotiations.
Although some billed this as a bipartisan solution, and President Barack Obama did temporarily cut the payroll tax after the Great Recession, others note it probably would run into firm opposition from Democrats who are loathe to be seen as undermining Social Security.
The White House would not comment on the plan, but said a value-added tax based on consumption is not under consideration ‘as of now,’ according to a White House statement.
The lack of detail about how to significantly rewrite tax laws for the first time in 30 years may provide Trump some time to build consensus among Republicans. But without Trump laying down his hand, lawmakers appear reluctant to back a plan that will likely stir controversy.
How will markets react? Stocks rallied after the election on the promise of lower taxes and fewer regulations, but the Dow has dipped 1.2 percent over the past month
Stock markets take a hit after Trump’s healthcare defeat
‘Because there are trade-offs, congressmen need cover from the president to withstand the lobbyists and constituents who are going to complain,’ said Bill Gale, an economist at the Brookings Institution who worked at the White House Council of Economic Advisers during President George H.W. Bush’s administration.
The Trump administration appears to have shut out the economists who helped assemble one of his campaign’s tax overhaul plans, which independent analyses show would have increased the budget deficit.
‘It’s a little frustrating that they feel they have to write a new tax plan when they have a tax plan,’ said Steven Moore, an economist at the conservative Heritage Foundation who helped formulate tax policy for the Trump campaign.
Rob Portman, the Republican senator from Ohio, a member of the Senate Finance Committee, said that all of the trial balloons surfacing in public don’t represent the work that’s being done behind the scenes.
‘It’s not really what’s going on,’ Portman said. ‘What’s going on is they’re working with on various ideas.’
Investors are beginning to show some doubts that Trump can deliver. Stocks rallied after his election on the promise of lower taxes and fewer regulations, but the Dow Jones Industrial Average has dipped 1.2 percent over the past month as the path for health care and tax revisions has become muddied.
‘The White House is going to need its own clear direction, or it’s going to need to defer to Congress, but saying that your plan is forthcoming and then not producing a plan kind of puts everything in stasis,’ said Alan Cole, an economist at the conservative Tax Foundation.
The BAT is a bad idea. There are far better ways to shrink the federal budget deficit.
By GENE EPSTEIN
March 18, 2017
“Anytime I hear border adjustment, I don’t love it,” Donald Trump told The Wall Street Journal shortly before his inauguration, noting that the proposed border adjustment tax was “too complicated.”
Trump isn’t always right when he makes off-the-cuff remarks such as that, but this time he was. The proposed border adjustment tax is so complicated that even its advocates can’t agree on how its disruptive effects on the U.S. economy will play out, and there’s nothing to love about that. The BAT is a bad idea, and it should be scrapped. And while taking it off the table will bring more red ink to the federal budget, there are better ways to stanch the bleeding than subjecting the economy to the trauma of a BAT.
Despite protestations to the contrary, the border adjustment levy is a tax hike embedded in the program of tax reductions that House Republicans put forward last June under the rubric of “A Better Way.” It’s there, presumably, to help offset the effect of the administration’s planned cuts, since the Republicans’ stated aim is to keep those cuts revenue-neutral. Barron’s fully supports the goal of not adding to deficits that, before too long, will be running above $1 trillion a year, given repeated warnings from the nonpartisan Congressional Budget Office about the risk of a financial crisis, due to exploding debt.
The attraction of a BAT is that it could generate an estimated $100 billion a year in revenue. There may be reasons to challenge that estimate, but we’ll accept it for now. There are, however, better ways to slash the fiscal deficit by $100 billion a year than the Better Way plan, and most fall under the heading of spending cuts.
President Trump has spoken about “waste, fraud, and abuse” in “every agency” of the federal government. Indeed, he promised that “we will cut so much, your head will spin.” He should therefore find plenty to love in our proposed reductions in spending. Just for starters, if all corporate welfare were cut from the budget, as much as $100 billion a year could be saved, about matching the total expected from the BAT.
The president also favors slashing the top rate on corporate income to 15% from 35%. Barron’s has proposed a more modest cut, to 22% (“Cut the Top U.S. Corporate Tax Rate to 22%,” Nov. 26, 2016). The Republican package calls for a reduction to 20%, which is close enough to our original proposal and which we believe should boost revenue rather than shrink it.
A list of potential cuts and revenue enhancements, totaling $200 billion, is in the table at the bottom of this page.
THE BETTER WAY PLAN, as noted, would reduce the top federal tax rate on corporate profits to 20% from 35%—which is all to the good. The proposed tax cut would not only be revenue-neutral; it would probably be revenue-enhancing.
In a study released this month by the London-based Centre for Policy Studies, analyst Daniel Mahoney traces the effect on revenue from Britain’s cuts in the corporate tax rate over a 34-year period. According to his calculations, the take from the corporate tax has added three-tenths of a percentage point annually to gross domestic product since rates were slashed.
Similarly, last year, in calling for a maximum U.S. rate of 22%, we traced the significant decline in the average top rate on corporate income for 19 countries in the Organization for Economic Cooperation and Development, which includes the U.S. and the United Kingdom. Over 33 years, their average tax take as a share of GDP rose six-tenths of a percentage point.
While that might not sound like much, every tenth of a percentage point of U.S. nominal GDP is worth $18.9 billion. So if revenue from the corporate tax rises by, say, three-tenths of a percentage point, to 2.5%—a conservative guess—that increase would translate into a bonus of nearly $57 billion a year in revenue. That alone gets us more than halfway to the $100 billion value of a BAT.
The idea of a revenue-enhancing cut in the corporate income tax was put forward in 1978, when economist Arthur Laffer was first cited as arguing that some rate decreases could generate enough added economic growth that the government wouldn’t lose revenue over the long run—and might, in fact, even gain revenue. Laffer also noted that most tax hikes generate less revenue than a conventional “static” analysis indicates, and that most tax cuts lose less.
Laffer’s “dynamic” analysis covered all of the behavioral changes likely to result from a cut. To begin with, if the tax collector claims a lower share of income, there is an incentive to produce more income. Second, a lower rate means there’s less incentive to spend time and effort avoiding the tax.
Corporations don’t pay taxes; only people do. And there is a tendency to forget that if a corporation nets more profits as a result of a lower tax, those funds will soon take the form of salaries, dividends, and capital gains, and will be taxed in those forms.
The second factor, less tax avoidance, applies with special force to a rollback of corporate taxes. As we noted last year, bringing down the top rate to 22% from 35% would dramatically reduce corporate flight to low-tax jurisdictions in the rest of the world.
Following the publication of our article, the CBO released a study confirming that U.S corporate tax rates are among the highest in the world. Among the Group of 20 countries—including Japan, China, Russia, Germany, France, Canada, and the U.K.—the U.S. is No. 1, 3, and 4, respectively, in “top statutory corporate tax rate,” “average corporate tax rate,” and “effective corporate tax rate.” The Better Way plan would narrow this gap significantly and make the U.S. more competitive.
But when it comes to the Better Way plan for cutting tax rates on personal income, Barron’s believes that there would be a loss of revenue even after taking into account behavioral changes. The revenue reduction from the proposed personal income-tax cuts has been estimated, on a static basis, at an average of $98 billion a year. We can assume that dynamic losses would run 10% less, or $88 billion, mainly because lower taxes are likely to encourage people to work.
Still, $88 billion a year is a huge loss of revenue. Barron’s proposes that the Better Way plan consider splitting the difference and going halfway on the tax cut, thus saving $44 billion.
THE REVENUE-ENHANCING corporate tax cut would include a special kicker in the form of the border adjustment tax. The BAT would deny corporations the ability to deduct the cost of imports from their taxable income, while all income earned from exports would be exempt from the 20% levy.
This means that companies selling imported goods in the domestic market would be taxed on the sale’s full proceeds—not just on the profit earned—which could more than offset the gains from the corporate tax reduction. At the same time, as noted, there would be no tax on the sale of exports.
The GOP’s Big Three Key players in the border adjustment tax debate: Senate Majority Leader Mitch McConnell, above, and House Speaker Paul Ryan and President Donald Trump, below. McConnell has said that he hasn’t made up his mind about the levy. Alex Wong/Getty Images
The BAT would bring uncertainty and disruption to the U.S. economy, making it hard to predict whether it really would raise $100 billion annually in revenue. The basic idea is that, because the U.S. imports more than it exports, the export exemption would be more than offset by hitting imports hard. Regardless of how it shakes out, the value of the transactions affected by the BAT is huge.
The U.S. trade deficit—the difference between exports and imports—ran at just 3.4% of real GDP in 2016, much lower than the 5.5% peak of 2005. But the actual gross flows of exports and imports are much larger than the difference between the two flows. Exports last year were valued at $2.2 trillion, or 12.8% of real GDP, and imports at $2.7 trillion, or 16.2% (see chart). Given those magnitudes, the tax plan is likely to require massive readjustments throughout the economy.
That’s why major importers, like Wal-Mart Stores, are objecting—and why exporters are clearly pleased. As you might expect, then, the BAT is pitting exporters against importers, creating needless discord at a time when the country is surely suffering from more discord than it can handle.
THE POSITION PAPER for the Better Way asserts that by “exempting exports and taxing imports,” the BAT does “not” consist of the “addition of a new tax.” But of course, the BAT’s designers know that imports normally exceed exports by about $500 billion a year. Apply a back-of-the-envelope 20% to that $500 billion, and you get the hoped-for $100 billion in revenue. So the maneuver of “exempting exports and taxing imports” certainly looks and sounds like a new tax.
The Better Way statement also argues that there is an imbalance in the tax treatment of imports and exports that the BAT must remedy. “In the absence of border adjustments,” it states, “exports from the United States implicitly bear the cost of the U.S. income tax, while imports do not bear any federal income tax cost. This amounts to a self-imposed unilateral penalty on American exports and a self-imposed unilateral subsidy for U.S. imports.”
Ryan strongly supports the tax. Chip Somodevilla/Getty Images
But all other countries impose this “implicit cost” on exports through their own corporate income tax. And since the Better Way would slash America’s top rate to 20%, this implicit cost would finally become competitive with that of other nations.
Some supporters of the BAT like it precisely because it would help exports and penalize imports. The mercantilist view of economics implicit in that aim was discredited in Adam Smith’s 1776 treatise, The Wealth of Nations. And apart from the massive dislocations that will occur if imports shrink, this calls into question whether the projected $100 billion a year in revenue is realistic. As Alan Greenspan once wisely said, “Whatever you tax, you get less of.”
Then again, whether we really will get fewer imports depends a lot on the exchange value of the dollar. Other supporters of the BAT predict that the dollar will respond by appreciating against other currencies, conforming to the dictates of textbook fundamentals. If the dollar appreciates enough, the advantage to exporters and disadvantage to importers will be nullified. Without getting into the technicalities of how all this would work, we concede that it is all quite possible.
But as currency analysts and traders can tell you, exchange rates are subject to all kinds of forces and can spend long periods flouting textbook fundamentals. So whether the dollar will really strengthen in response to the BAT is anyone’s guess. But even if it does, a much stronger greenback would bring other disruptions. American investors with holdings denominated in foreign currencies would take a huge hit. And America’s tourist industries, which are already hurting from what the Los Angeles Times has called a “Trump slump,” would be hurt even more, as the cost of traveling to the States jumps.
There are other questions. Would the World Trade Organization challenge the BAT? Might our trading partners respond in ways that would be unfavorable to us? The border adjustment tax is an experiment in Rube Goldberg economics that the U.S. can do without.
SINCE REVENUE NEUTRALITY is the goal of the Better Way package, what about making up for the $100 billion a year in revenue that the border adjustment tax is supposed to generate?
Whether this tax really will raise as much as $100 billion depends on how imports and exports respond, which is hard to predict. Also, the reduction in the corporate income tax would probably be revenue-enhancing and could generate more than $50 billion in annual revenue.
The president has declared that “anytime I hear border adjustment, I don’t love it” and has voiced concern that it’s overly complicated. Michael Reynolds/Getty Images
We note that the full title of the House Republican plan is “A Better Way: Our Vision for a Confident America,” which leaves room for a vision that includes cost-cutting, along with tax-cutting.
That discussion revealed much low-hanging fruit. For example, the Medicare system is rife with “improper payments,” which Medicare itself estimates at 11% of its spending in 2016. That’s probably a low estimate, because those who get improperly paid tend to keep these payments hidden. Barron’s calculated that if the improper-payment rate could be halved, it would save more than $400 billion over 10 years.
That would contribute $40 billion a year to the $100 billion shortfall from forgoing the BAT. To that we add $65 billion, and perhaps as much as $100 billion, by eliminating corporate welfare.
The Better Way statement properly criticizes the tax code for being “littered with hundreds of preferences and subsidies that pick winners and losers” and “direct resources to politically favored interests.” Spending on corporate welfare is another form of subsidy that picks winners and losers and directs funds to politically favored interests.
IN A 2012 PAPER, “Corporate Welfare in the Federal Budget,” the Cato Institute identified nearly $100 billion worth of yearly spending on corporate handouts, broadly defined, that could be ended. At Barron’s request, Cato senior fellow Chris Edwards updated the scoring on just 10 of the institute’s 40 categories of corporate welfare and came up with $66 billion in potential cuts.
High on Edwards’ list: farm subsidy programs, which redistribute taxpayer money to relatively rich agribusinesses and landowners. That the farm industry receives subsidies makes about as much sense as channeling funds to the restaurant industry, which could well be riskier than farming, based on its high failure rate. This form of corporate welfare goes back to the Great Depression of the 1930s. But whatever argument might have been made for it then hardly applies today, with the yearly tab currently at $25 billion.
Also on the corporate welfare list: pork-barrel handouts administered by the Department of Housing and Urban Development, totaling $13 billion, which go under the heading of “community development,” and which distribute funds to such recipients as museums, recreational facilities, and parking lots. Whatever one may think about the worthiness of these projects, they are better left to states and localities.
Another $10 billion could be saved by abolishing the Universal Service Fund, through which the Federal Communications Commission subsidizes telecommunications companies, among others. A creation of the Telecommunications Act of 1996, this attempt to pick winners and losers is more unnecessary than ever in this dynamic and competitive industry.
PRESIDENT TRUMP PROMISED to “drain the swamp” of Washington’s special interests. One route toward that admirable goal would be to cut corporate welfare. Trump should repeat his objections to a border adjustment tax that would favor the interests of some businesses over others. He can help make U.S. corporations great again by weaning them off subsidies and reducing their tax burdens.
And there are many other provisions that would reduce penalties on work, saving, investment, and entrepreneurship. No, it’s not quite a flat tax, which is the gold standard of tax reform, but it is a very pro-growth initiative worthy of praise.
That being said, there is a feature of the plan that merits closer inspection. The plan would radically change the structure of business taxation by imposing a 20 percent tax on all imports and providing a special exemption for all export-related income. This approach, known as “border adjustability,” is part of the plan to create a “destination-based cash flow tax” (DBCFT).
When I spoke about the Better Way plan at the Heritage Foundation last month, I highlighted the good features of the plan in the first few minutes of my brief remarks, but raised my concerns about the DBCFT in my final few minutes.
Allow me to elaborate on those comments with five specific worries about the proposal.
Concern #1: Is the DBCFT protectionist?
It certainly sounds protectionist. Here’s how the Financial Timesdescribed the plan.
The border tax adjustment would work by denying US companies their current ability to deduct import costs from their taxable income, meaning companies selling imported products would effectively be taxed on the full value of the sale rather than just the profit. Export revenues, meanwhile, would be excluded from company tax bases, giving net exporters the equivalent of a subsidy that would make them big beneficiaries of the change.
Charles Lane of the Washington Postexplains how it works.
…the DBCFT would impose a flat 20 percent tax only on earnings from sales of output consumed within the United States… It gets complicated, but the upshot is that the cost of imported supplies would no longer be deductible from taxable income, while all revenue from exports would be. This would be a huge incentive to import less and export more, significant change indeed for an economy deeply dependent on global supply chains.
That certainly sounds protectionist as well. A tax on imports and a special exemption for exports.
But proponents say there’s no protectionism because the tax is neutral if the benchmark is where products are consumed rather than where income is earned. Moreover, they claim exchange rates will adjust to offset the impact of the tax changes. Here’s how Lane explains the issue.
…the greenback would have to rise 25 percent to offset what would be a new 20 percent tax on imported inputs — propelling the U.S. currency to its highest level on record. The international consequences of that are unforeseeable, but unlikely to be totally benign for everyone. Bear in mind that many other countries — China comes to mind — can and will manipulate exchange rates to protect their own short-term interests.
For what it’s worth, I accept the argument that the dollar will rise in value, thus blunting the protectionist impact of border adjustability. It would remain to be seen, though, how quickly or how completely the value of the dollar would change.
Concern #2: Is the DBCFT compliant with WTO obligations?
The United States is part of the World Trade Organization (WTO) and we have ratified various agreements designed to liberalize world trade. This is great for the global economy, but it might not be good news for the Better Way plan because WTO rules only allow border adjustability for indirect taxes like a credit-invoice value-added tax. The DBCFT, by contrast, is a version of a corporate income tax, which is a direct tax.
The column by Charles Lane explains one of the specific problems.
Trading partners could also challenge the GOP plan as a discriminatory subsidy at the World Trade Organization. That’s because it includes a deduction for wages paid by U.S.-located firms, importers and exporters alike — a break that would obviously not be available to competitors abroad.
Advocates argue that the DBCFT is a consumption-base tax, like a VAT. And since credit-invoice VATs are border adjustable, they assert their plan also should get the same treatment. But the WTO rules say that only “indirect” taxes are eligible for border adjustability. The New York Timesreports that the WTO therefore would almost surely reject the plan.
Michael Graetz, a tax expert at the Columbia Law School, said he doubted that argument would prevail in Geneva. “W.T.O. lawyers do not take the view that things that look the same economically are acceptable,” Mr. Graetz said.
A story in the Wall Street Journal considers the potential for an adverse ruling from the World Trade Organization.
Even though it’s economically similar to, and probably better than, the value-added taxes (VATs) many other countries use, it may be illegal under World Trade Organization rules. An international clash over taxes is something the world can ill afford when protectionist sentiment is already running high. …The controversy is over whether border adjustability discriminates against trade partners. …the WTO operates not according to economics but trade treaties, which generally treat tax exemptions on exports as illegal unless they are consumption taxes, such as the VAT. …the U.S. has lost similar disputes before. In 1971 it introduced a tax break for exporters that, despite several revamps, the WTO ruled illegal in 2002.
And a Washington Posteditorial is similarly concerned.
Republicans are going to have to figure out how to make such a huge de facto shift in the U.S. tax treatment of imports compliant with international trade law. In its current iteration, the proposal would allow corporations to deduct the costs of wages paid within this country — a nice reward for hiring Americans and paying them well, which for complex reasons could be construed as a discriminatory subsidy under existing World Trade Organization doctrine.
Concern #3: Is the DBCFT a stepping stone to a VAT?
If the plan is adopted, it will be challenged. And if it is challenged, it presumably will be rejected by the WTO. At that point, we would be in uncharted territory.
Would that force the folks in Washington to entirely rewrite the tax system? Would they be more surgical and just repeal border adjustability? Would they ignore the WTO, which would give other nations the right to impose tariffs on American exports?
One worrisome option is that they might simply turn the DBCFT into a subtraction-method value-added tax (VAT) by tweaking the law so that employers no longer could deduct expenses for labor compensation. This change would be seen as more likely to get approval from the WTO since credit-invoice VATs are border adjustable.
This possibility is already being discussed. The Wall Street Journal story about the WTO issue points out that there is a relatively simple way of making the DBCFT fit within America’s trade obligations, and that’s to turn it into a value-added tax.
One way to avoid such a confrontation would be to revise the cash flow tax to make it a de facto VAT.
One tax initiative that should be strangled before it sees the light of day is to give a tax rebate to exporters and to impose taxes on imports. …It’s a bad idea. Why do we want to make American consumers pay more for products while subsidizing foreign buyers? It also could put us on the slippery slope to our own VAT.
And that’s not a slope we want to be on. Unless the income tax is fully repealed (sadly not an option), a VAT would be a recipe for turning America into a European-style welfare state.
Concern #4: Does the DBCFT undermine tax competition and give politicians more ability to increase tax burdens?
Alan Auerbach, an academic from California who previously was an adviser for John Kerry and also worked at the Joint Committee on Taxation when Democrats controlled Capitol Hill, is the main advocate of a DBCFT (the New York Timeswrote that he is the “principal intellectual champion” of the idea).
He wrote a paper several years ago for the Center for American Progress, a hard-left group closely associated with Hillary Clinton. Auerbach explicitly argued that this new tax scheme is good because politicians no longer would feel any pressure to lower tax rates.
This…alternative treatment of international transactions that would relieve the international pressure to reduce rates while attracting foreign business activity to the United States. It addresses concerns about the effect of rising international competition for multinational business operations on the sustainability of the current corporate tax system. With rising international capital flows, multinational corporations, and cross-border investment, countries’ tax rates and tax structures are of increasing importance. Indeed, part of the explanation for declining corporate tax rates abroad is competition among countries for business activity. …my proposed reforms…builds on the [Obama] Administration’s approach…and alleviates the pressure to reduce the corporate tax rate.
This is very troubling. Tax competition is a very valuable liberalizing force in the world economy. It partially offsets the public choice pressures on politicians to over-tax and over-spend. If governments no longer had to worry that taxable activity could escape across national borders, they would boost tax rates and engage in more class warfare.
Concern #5: Does the DBCFT create needless conflict and division among supporters of tax reform?
As I pointed out in my remarks at the Heritage Foundation, there’s normally near-unanimous support from the business community for pro-growth tax reforms.
That’s not the case with the DBCFT.
The Washington Examiner reports on the divisions in the business community.
Major retailers are skeptical of the House Republican plan to revamp the tax code, fearing that the GOP call to border-adjust corporate taxes could harm them even if they win a significant cut to their tax rate. As a result, retailers, oil refiners and other industries that import goods to sell in the U.S. could provide a major obstacle to the Republican effort to reform taxes. …The effect of the border adjustment, retailers fear, would be that the goods they import to sell to consumers would face a 20 percent mark-up, one that would force retailers like Walmart, the Home Depot and Sears…to raise prices and lose customers.
A story from CNBC highlights why retailers are so concerned.
…retailers are nervous. Very nervous. …About 95 percent of clothing and shoes sold in the U.S. are manufactured overseas, which means imports make up a vast majority of many U.S. retailers’ merchandise. …If the GOP plan were adopted as it’s currently laid out, Gap pays 20 percent corporate tax on the $5 profit from the sweater, or $1. Plus, 20 percent tax on the $80 cost it paid for that sweater from the overseas supplier, or $16. That means the tax goes from $1.75 to $17 for that sweater, more than three times the profit on that sweater. Talk about a hit to margins. …Retailers certainly aren’t taking a lot of comfort in the economic theory of dollar appreciation. …the tax reform plan will dilute specialty retailers’ earnings by an average of 132 percent. …Athletic manufacturers could take a 40 percent earnings hit… Gap, Carter’s , Urban Outfitters , Fossil and Under Armour are most at risk under the plan.
And here’s another article from the Washington Examiner that explains why folks in the energy industry are concerned.
…the border adjustment would raise costs for refiners that import oil. In turn, that could raise prices for consumers. The border adjustment would amount to a $10-a-barrel tax on imported crude oil, raising costs for drivers buying gasoline by up to 25 cents a gallon, the energy analyst group PIRA Energy Group warned this week. The report warned of a “potential huge impact across the petroleum industry,” even while noting that the tax reform plan faces many obstacles to passage.
Concern #6: What happens when other nations adopt their versions of a DBCFT?
Advocates of the DBCFT plausibly argue that if the WTO somehow approves their plan, then other nations will almost certainly copy the new American system.
But is also has negative implications for the fight to protect America from a VAT. The main selling point for advocates of the DBCFT is that we need a border-adjustable tax to offset the supposed advantage that other nations have because of border-adjustable VATs (both Paul Krugman and I agree that this is nonsense, but it still manages to be persuasive for some people).
So what happens when other nations turn their corporate income taxes into DBCFTs, which presumably will happen? We’re than back where we started and misguided people will say we need our own VAT to balance out the VATs in other nations.
The bottom line is that a DBCFT is not the answer to America’s wretched business tax system. There are simply too many risks associated with this proposal. I’ll elaborate tomorrow in Part II and also explain some good ways of pursuing tax reform without a DBCFT.
Chairman Brady Acknowledges “Valid Concerns” About the Border Adjustment Tax Harming U.S. Businesses
Post by Freedom Partners
After months of insisting that a trillion-dollar Border Adjustment Tax (BAT) on American consumers is the best and only way to achieve pro-growth tax reform without adding to the deficit, Ways and Means Chairman Kevin Brady acknowledged that importers fearful of the new tax have “valid concerns.”
The proposed BAT from House Republicans would mean a new 20 percent tax on everything imported into the U.S., raising up to $1.2 trillion of new government revenue in the form of higher prices, shouldered by consumers. In effect, the regressive tax could undercut positive economic outcomes from lower rates and a simplified tax code through tax reform.
According to Chairman Brady, House Republicans need to “make sure that we allay the valid concerns of those that are importing today,” CNBC reports.
Freedom Partners Vice President of Policy Nathan Nascimento issued the following statement:
“Some of the ‘valid concerns’ that Chairman Brady acknowledges include a devastating new trillion-dollar tax hike, higher costs on everyday goods, fewer jobs, and less economic opportunity. We hope to work with the administration and Congress to get pro-growth tax reform done, but a 20 percent tax hike on all imports would only undermine the point of tax reform – which is to provide much-needed relief for taxpayers and the economy. A massive tax hike on all imports is bad policy, and Americans deserve a better plan that can unite lawmakers in both the House and Senate behind comprehensive tax reform.”
Americans for Prosperity has already identified more than $2 trillion in wasteful spending, unnecessary programs, and corporate welfare that ought to be eliminated before any new tax on U.S. consumers. Freedom Partners and its coalition allies support the efforts of Congress and the administration to bring comprehensive tax reform to reality in a way that protects all Americans from a massive tax hike.
U.S. Businesses Facing Massive Tax Increases Under A Border-Adjusted Tax System Have “Valid Concerns”
Wall Street Journal: “Some Retailers And Other Big Importers … Warn Of Tax Bills That Would Exceed Profits, Forcing Them To Pass Costs To Consumers. ”Cody Lusk, president of the American International Automobile Dealers Association, says his members are shocked that a Republican Congress is proposing a 20% tax on imports.” (Richard Rubin, “GOP Plan To Overhaul Tax Code Gets Held Up At The Border,” Wall Street Journal, 2/7/17)
LUSK: “We view this as a very, very serious potential blow to the auto sector and the economy.” (Richard Rubin, “GOP Plan To Overhaul Tax Code Gets Held Up At The Border,” Wall Street Journal, 2/7/17)
Financial Times: Border Tax Threatens To Devastate Importers Through Soaring Tax Bills. “Yet for Mr. Woldenberg the hope has turned to horror. Republicans are still promising the most sweeping changes since the Reagan reforms of 1986. But the only firm proposal on the table — from the House of Representatives — threatens to devastate his 150-person business because it includes a 20 per cent tax on imports … The problem for Mr. Woldenberg is that his goods come from China — 98 per cent of the products he sells in the US are imported. US factories could not produce them with the same low costs and specialized skills, he says. So he would have no choice but to pay the import levy. He estimates it would send his tax bill soaring to 165 per cent of earnings.” (Barney Jopson, Sam Fleming & Shawn Donnan, “Trump And The Tax Plan Threatening To Split Corporate America,” Financial Times, 2/13/17)
RICK WOLDENBERG: “To preserve cash flow I [would have to] raise my prices by a third, expect volume to go down by 40 per cent, and fire one out of five people.” (Barney Jopson, Sam Fleming & Shawn Donnan, “Trump And The Tax Plan Threatening To Split Corporate America,” Financial Times, 2/13/17)
RBC Capital Markets: Major Retailers Would Face Tax Bills That Exceed Their Operating Profits. “Major retailers like Wal-Mart, Best Buy, Costco and Dollar Tree would face tax bills that exceed their operating profits under House Republicans’ plans to create a ‘border adjustable’ business tax, RBC Capital Markets said. The investment bank sided with retailers in a debate over the proposal, saying in a research note it would have a ‘seriously adverse’ impact on them. ‘If the US moves to a border-adjusted tax system, most of our retailers would be forced to raise prices (and revenues) or meaningfully change their import/domestic sourcing mix, or their earnings would be materially reduced,’ it said.” (Brian Faler, “RBC Capital Markets: GOP Border-Adjustment Plan Bad For Retailers,” POLITICO Pro, 12/12/16)
POLITICO: “Retailers Fear Massive Tax Increases Under House Republican Tax Plan” “Many retailers fear that, even with Republicans promising to slash the corporate tax rate, they will still face big tax increases that in some cases will exceed their profits. On high alert over the proposal, retailers have begun a big lobbying campaign on the Hill, warning lawmakers and their aides that any tax hikes will get passed on to their constituents in the form of higher prices.” (Brian Faler, “Retailers Fear Massive Tax Increases Under House Republican Tax Plan,” POLITICO, 11/23/16)
The National Retail Federation Warns That A Border Tax Could Shut Businesses Down Completely. “‘Our members have told us that the import tax could be as high as five times their profits,’ said David French, chief lobbyist for the National Retail Federation. ‘I don’t know how viable some retailers would be in the face of this import tax.’” (Brian Faler, “Retailers Fear Massive Tax Increases Under House Republican Tax Plan,” POLITICO, 11/23/16)
POLITICO Pro: “Some Of The Biggest Losers Would Be Retailers Like Walmart, Best Buy And Home Depot That Import Massive Amounts Of Goods And Materials On Which They Would Suddenly Have To Pay Taxes.” “The border adjustment plan would affect individual companies differently, depending in part on how much they import and export. Some of the biggest losers would be retailers like Walmart, Best Buy and Home Depot that import massive amounts of goods and materials on which they would suddenly have to pay taxes.” (Brian Faler, “Some Companies May Never Pay Taxes Under Border-Adjustment Tax Plan,” POLITICO Pro, 1/9/17)
Axios: Cowen Research Released A Study Highlighting Some Of The Big Name Companies That Will Be Hurt By The Border Adjustments High Tax Hikes. “Cowen Research published a report Thursday that estimates the effect of the reform plan, and other planned measures, like eliminating the deductibility of interest and a headline corporate tax cut, on different industries and companies. Here are some of the big-name firms Cowen says will be hurt by reform: 1. Apple: The world’s largest company would see its tax bill jump because it won’t be able to deduct the expense of assembly abroad. 2. Constellation Brands: The largest beer importer in America will not be able to expense the cost of goods it brings across the border, like its Corona brand. 3. Gap: Between 50% and 80% of the retailer’s cost of the goods its sells comes from abroad. Walmart: 4. Walmart’s low margins means that it may not be able to survive a tax hike on imported goods without raising prices. 5. Target: Will suffer from the same conundrum as Walmart, but will be worse off since less of its revenue comes from domestically-sourced groceries. J.C. Penney: The department store has high debt loads, and interest on debt will not be deductible under the Republican plan. (Christopher Matthews, “These Companies Will Be Hit Hardest By GOP Tax Reform,” Axios, 1/27/17)
Border Adjustment Tax Would Result In Higher Costs For Hard-Working Families
Christian Science Monitor: Border Tax Could Raise Car Prices By Thousands Of Dollars. “Michigan-based Baum & Associates says that a border tax–one that applies not only to vehicles imported from factories abroad but also to foreign-made vehicle parts–could increase sticker prices by as much as $17,000 … Most increases would be smaller, but still very substantial. Volvo, for example, would need to up its prices by more than $7,500 to accommodate a border tax. Volkswagen wouldn’t be far behind, with increases of around $6,800. Even Detroit brands would see price upticks: Ford’s would climb $285, and General Motors’ would rise by nearly $1,000. Fiat Chrysler would have to boost prices by closer to $2,000.” (Richard Read, “How Trump’s Border Tax Could Raise Car Prices By Thousands Of Dollars,” Christian Science Monitor, 2/8/17)
Auto Sales Would Plummet Under A Border Adjustment Tax. “A report from UBS Securities says that the higher car prices would slash U.S. auto sales by about 2 million vehicles per year. That would more than erase the increased capacity and almost certainly result in layoffs.” (Richard Read, “How Trump’s Border Tax Could Raise Car Prices By Thousands Of Dollars,” Christian Science Monitor, 2/8/17)
More Than A Hundred American Businesses Are Opposing The Republican Border Tax: “Don’t Make Hard-Working Families Pay More On Essential Products.” “Nike, Rite Aid, The Gap, Best Buy and Abercrombie & Fitch have joined a new advocacy group aimed at killing House Republicans’ plans to create a border adjustable business tax. They are some of the more than 100 companies and trade associations behind Americans for Affordable Products, an organization launched today that is pushing lawmakers to dump a plan to begin taxing imports as part of a broader tax-code rewrite. The groups, which rely on imports, fear the House Republican plan will mean huge tax increase even as Republicans promise to simultaneously slash the corporate tax rate … Other well-known companies joining the effort include Target, Walmart, QVC, Petco, AutoZone, Macy’s and Levi Strauss.” (Brian Faler, “Border Adjustment Tax Opponents Launch New Group Targeting GOP Proposal,” Politico, 2/01/17)
“A Sweeping Tax Reform Proposal Meant To Boost U.S. Manufacturing Faces Mounting Pressure From Industries That Rely Heavily On Imported Goods …” “A sweeping tax reform proposal meant to boost U.S. manufacturing faces mounting pressure from industries that rely heavily on imported goods as President-elect Donald Trump and congressional Republicans work to finalize new tax legislation. As Republican members of the House of Representatives tax committee prepared to discuss tax reform this week, the panel received a letter from 81 industry groups rejecting the proposal known as ‘border adjustability.’ A lynchpin of the House Republican ‘Better Way’ agenda and viewed favorably by Trump’s team, the policy would help manufacturers by exempting export revenues from corporate taxes. But it would tax imports, hitting import-dependent industries.” (David Morgan, “U.S. Tax Reform Proposal On Border Trade Faces Growing Opposition,” Reuters, 12/15/16)
“Companies That Rely On Global Supply Chains Would Face Huge Business Challenges Caused By Increased Taxes And Increased Cost Of Goods.” “In a Dec. 13 letter to House Ways and Means Chairman Kevin Brady and incoming top Democrat Richard Neal, groups representing the auto and retailing industries, among others, said: ‘Companies that rely on global supply chains would face huge business challenges caused by increased taxes and increased cost of goods.’ They warned of ‘reductions in employment, reduced capital investments and higher prices for consumers’ as potential consequences.” (David Morgan, “U.S. Tax Reform Proposal On Border Trade Faces Growing Opposition,” Reuters, 12/15/16)
CNBC: Coach CEO Victor Luis Acknowledged That “Any Border Tax Will Lead To Higher Prices For The Consumer.” “If we see this border adjustment in an economy where 70 percent of GDP is driven by consumption that is driven on imports, any border tax will lead to higher prices for the consumer … That’s just a reality that we’ll have to face if it comes to that.” (Rachel Cao, “Coach CEO: Any Border Tax Will Lead To Higher Prices For The Consumer,” CNBC, 1/31/17)
National Retail Federation: The Border Adjustment Tax Could Cost The Average Family $1,700 In Just The First Year. “The imposition of a ‘border adjustment tax,’ a key provision of a pending House tax reform proposal, would end up seriously harming U.S. consumers. NRF analysis indicates that this plan could cost the average family $1,700 in the first year alone if the border adjustment provision is enacted. While economic theory suggests that trade flow of imports and exports would balance out over the long run due to offsetting exchange rate and price adjustments, there is no consensus as to the degree or the timing of these adjustments. In the near term, consumers would be left to pick up the significant tab while hoping that the economic theory proves out.” (Mark Mathews, “Border Adjustment Tax Would Cost American Households Up To $1,700 In First Year Alone,” National Retail Federation, 2/3/17)
NRF: Annual Family’s Savings Could Be Wiped Out By Nearly A Third. “For the average family, 27 percent of their savings (income after taxes and expenditures) could evaporate with the cost increases caused by the border tax.” (Mark Mathews, “Border Adjustment Tax Would Cost American Households Up To $1,700 In First Year Alone,” National Retail Federation, 2/3/17)
“Unmarried adults without children currently have only $443 left over annually after taxes and expenditures. If the border adjustment tax were enacted, they could see an $836 increase in costs — nearly 200 percent higher than their annual savings.”
“One-parent households, which are already in the red, could see an additional $1,000 added to their debt burden as they do what they can to make ends meet. Their apparel and footwear bills would increase by $271”
“The average family (married with children) could see their apparel costs (including shoes) increase by $437 a year.”
“Single people could see their annual gasoline bills rise by $189, a whopping 43 percent of their annual average savings.”
“Married couples with children could see their annual gasoline bill could increase by over $400.”
CNBC: “The Republicans’ Plan To Enact A Border Adjustment Tax Will Leave Consumers Digging Deeper Into Their Pockets,” Increasing The Price Of Everyday Goods Like Clothes And Shoes By 20 Percent. “It will force consumers to pay as much as 20 percent more for the products they need. Gasoline is estimated to go up as much as 35 cents a gallon,’ said ‘Americans for Affordable Products’ advisor Brian Dodge … ‘Common household goods, apparel, things that people count on every day, pajamas, will cost more and really just so a certain, select group of corporations can avoid paying taxes forever. We think that’s bad policy…” (Michelle Fox, “Consumers Could See 20% Price Hike With Border Adjustment Tax, Retail Group Says,” CNBC, 2//17)
Economists And Analysts Weigh-In Against Border Adjustments
Dan Mitchell, Cato Institute: “I’ve Never Understood Why Politicians Think It’s A Good Idea To Have Higher Taxes On What Americans Consume And Lower Taxes On What Foreigners Consume.” (Dan Mitchell, “A Remarkably Good And Reasonably Bold Tax Reform Plan From House Republicans,” International Liberty, 6/25/16)
President Of The New York Fed Bill Dudley: “… There Could Be A Lot Of Unintended Consequences.” “Another prominent critic of a ‘border adjustment tax’ emerged Tuesday: the president of the New York Federal Reserve. Bill Dudley was asked by Macy’s CEO Terry Lundgren at a meeting of the National Retail Federation trade group what he thinks of the idea of a border adjustment tax, which involves taxing imports at 20 percent, while making U.S. exports tax-free. … ‘I think that it will lead to a lot of changes in the value of the dollar, the price of imported goods in the U.S., and I’m not sure that would all happen very smoothly,’ Dudley said. ‘I also think there could be a lot of unintended consequences.’” (Michelle Caruso-Cabrera, “NY Fed’s Dudley Sees ‘A Lot Of Unintended Consequences’ From Border-Tax Plan,” CNBC, 1/17/17)
Stephen Moore, Heritage Foundation: Border Tax Unlikely To Be Enacted. “A Heritage Foundation economist who advised President Trump’s campaign said he doubts a proposal from House Republicans to tax imports and exempt exports will gain traction.” (Naomi Jagoda, “Trump Campaign Adviser: Border Tax Unlikely To Be Enacted,” The Hill, 2/7/17)
MOORE: “I think it’s a distraction.” (Naomi Jagoda, “Trump Campaign Adviser: Border Tax Unlikely To Be Enacted,” The Hill, 2/7/17)
Steve Forbes: Border Adjustment Amounts To “Sneaky, Anti-Consumer Tax.” “This levy will cost American consumers at least a trillion dollars over the next ten years … Prices for everyday items, such as socks, shoes and household appliances, will go up. So will tech devices like the iPad, not to mention automobiles and trucks. Gasoline? Millions of Americans will pay an additional 30 cents or more per gallon at the pump. Lower-income and struggling middle-class Americans will get hit the hardest.” (Steve Forbes, “OMG! House Republicans Are Preparing To Hit Consumers With A Horrible New Tax That Will Harm Trump And Hurt The Economy,” Forbes, 1/11/17)
POLITICO Pro: “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans.” “An economic adviser to President-elect Donald Trump slammed plans to create a so-called border adjustable business tax, and predicted it could kill efforts to overhaul the tax code. The House Republican proposal is overly complicated … said Larry Kudlow, who helped write Trump’s tax-reform plans.” (Brian Faler, “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans,” POLITICO Pro, 1/12/17)
KUDLOW: “That is an exercise in government planning and complexity that I believe is doomed to fail … I think the whole corporate tax reform, which is the most important pro-growth measure, will go down the drain over this … There’s a problem that exists, but this is not the right solution …” (Brian Faler, “Trump Adviser Larry Kudlow Slams Border-Adjustment Tax Plans,” POLITICO Pro, 1/12/17)
KUDLOW: “GOP’s Border Adjustment Tax Is ‘Voodoo Economics” “President-elect Donald Trump is correct to criticize the House Republican plan to tax cross-border trade … said Larry Kudlow, who served as a senior economic adviser to Trump’s campaign…’I hate to say this, but it’s ‘voodoo economics’” (R. Williams, “Larry Kudlow: GOP’s Border Adjustment Tax Is ‘Voodoo Economics,” Newsmax, 1/17/17)
I wrote yesterday to praise the Better Way tax plan put forth by House Republicans, but I added a very important caveat: The “destination-based” nature of the revised corporate income tax could be a poison pill for reform.
I listed five concerns about a so-called destination-based cash flow tax (DBCFT), most notably my concerns that it would undermine tax competition (folks on the left think it creates a “race to the bottom” when governments have to compete with each other) and also that it could (because of international trade treaties) be an inadvertent stepping stone for a government-expanding value-added tax.
Brian Garst of the Center for Freedom and Prosperity has just authored a new study on the DBCFT. Here’s his summary description of the tax.
The DBCFT would be a new type of corporate income tax that disallows any deductions for imports while also exempting export-related revenue from taxation. This mercantilist system is based on the same “destination” principle as European value-added taxes, which means that it is explicitly designed to preclude tax competition.
Since CF&P was created to protect and promote tax competition, you won’t be surprised to learn that the DBCFT’s anti-tax competition structure is a primary objection to this new tax.
First, the DBCFT is likely to grow government in the long-run due to its weakening of international tax competition and the loss of its disciplinary impact on political behavior. … Tax competition works because assets are mobile. This provides pressure on politicians to keep rates from climbing too high. When the tax base shifts heavily toward immobile economic activity, such competition is dramatically weakened. This is cited as a benefit of the tax by those seeking higher and more progressive rates. …Alan Auerbach, touts that the DBCFT “alleviates the pressure to reduce the corporate tax rate,” and that it would “alter fundamentally the terms of international tax competition.” This raises the obvious question—would those businesses and economists that favor the DBCFT at a 20% rate be so supportive at a higher rate?
Brian also shares my concern that the plan may morph into a VAT if the WTO ultimately decides that is violates trade rules.
Second, the DBCFT almost certainly violates World Trade Organization commitments. …Unfortunately, it is quite possible that lawmakers will try to “fix” the tax by making it into an actual value-added tax rather than something that is merely based on the same anti-tax competition principles as European-style VATs. …the close similarity of the VAT and the DBCFT is worrisome… Before VATs were widely adopted, European nations featured similar levels of government spending as the United States… Feeding at least in part off the easy revenue generate by their VATs, European nations grew much more drastically over the last half century than the United States and now feature higher burdens of government spending. The lack of a VAT-like revenue engine in the U.S. constrained efforts to put the United States on a similar trajectory as European nations.
And if you’re wondering why a VAT would be a bad idea, here’s a chart from Brian’s paper showing how the burden of government spending in Europe increased once that tax was imposed.
In the new report, Brian elaborates on the downsides of a VAT.
If the DBCFT turns into a subtraction-method VAT, its costs would be further hidden from taxpayers. Workers would not easily understand that their employers were paying a big VAT withholding tax (in addition to withholding for income tax). This makes it easier for politicians to raise rates in the future. …Keep in mind that European nations have corporate income tax systems in addition to their onerous VAT regimes.
And he points out that those who support the DBCFT for protectionist reasons will be disappointed at the final outcome.
…if other nations were to follow suit and adopt a destination-based system as proponents suggest, it will mean more taxes on U.S. exports. Due to the resulting decline in competitive downward pressure on tax rates, the long-run result would be higher tax burdens across the board and a worse global economic environment.
Brian concludes with some advice for Republicans.
Lawmakers should always consider what is likely to happen once the other side eventually returns to power, especially when they embark upon politically risky endeavors… In this case, left-leaning politicians would see the DBCFT not as something to be undone, but as a jumping off point for new and higher taxes. A highly probable outcome is that the United States’ corporate tax environment becomes more like that of Europe, consisting of both consumption and income taxes. The long-run consequences will thus be the opposite of what today’s lawmakers hope to achieve. Instead of a less destructive tax code, the eventual result could be bigger government, higher taxes, and slower economic growth.
My concern with the DBCFT is partly based on theoretical objections, but what really motivates me is that I don’t want to accidentally or inadvertently help statists expand the size and scope of government. And that will happen if we undermine tax competition and/or set in motion events that could lead to a value-added tax.
Let’s close with three hopefully helpful observations.
Helpful Reminder #1: Congressional supporters want a destination-based system as a “pay for” to help finance pro-growth tax reforms, but they should keep in mind that leftists want a destination-based system for bad reasons.
Based on dozens of conversations, I think it’s fair to say that the supporters of the Better Way plan don’t have strong feelings for destination-based taxation as an economic principle. Instead, they simply chose that approach because it is projected to generate $1.2 trillion of revenue and they want to use that money to “pay for” the good tax cuts in the overall plan.
That’s a legitimate choice. But they also should keep in mind why other people prefer that approach. Folks on the left want a destination-based tax system because they don’t like tax competition. They understand that tax competition restrains the ability of governments to over-tax and over-spend. Governments in Europe chose destination-based value-added taxes to prevent consumers from being able to buy goods and services where VAT rates are lower. In other words, to neuter tax competition. Some state governments with high sales taxes in the United States are pushing a destination-based system for sales taxes because they want to hinder consumers from buying goods and services from states with low (or no) sales taxes. Again, their goal is to cripple tax competition.
Something else to keep in mind is that leftist supporters of the DBCFT also presumably see the plan as being a big step toward achieving a value-added tax, which they support as the most effective way of enabling bigger government in the United States.
Helpful Reminder #2: Choosing the right tax base (i.e., taxing income only one time, otherwise known as a consumption-base system) does not require choosing a destination-based approach.
The proponents of the Better Way plan want a “consumption-base” tax. This is a worthy goal. After all, that principle means a system where economic activity is taxed only one time. But that choice is completely independent of the decision whether the tax system should be “origin-based” or “destination-based.”
The bottom line is that you can have the right tax base with either an origin-based system or a destination-based system.
Helpful Reminder #3: The good reforms of the Better Way plan can be achieved without the downside risks of a destination-based tax system.
The Tax Foundation, even in rare instances when I disagree with its conclusions, always does very good work. And they are the go-to place for estimates of how policy changes will affect tax receipts and the economy. Here is a chart with their estimates of the revenue impact of various changes to business taxation in the Better Way plan. As you can see, the switch to a destination-based system (“border adjustment”) pulls in about $1.2 trillion over 10 years. And you can also see all the good reforms (expensing, rate reduction, etc) that are being financed with the various “pay fors” in the plan.
I am constantly asked how the numbers can work if “border adjustment” is removed from the plan. That’s a very fair question.
But there are lots of potential answers, including:
Make a virtue out of necessity by reducing government revenue by $1.2 trillion.
Reduce the growth of government spending to generate offsetting savings.
Reduce the size of the tax cuts in the Better Way plan by $1.2 trillion.
I’m not pretending that any of these options are politically easy. If they were, the drafters of the Better Way plan probably would have picked them already. But I am suggesting that any of those options would be better than adopting a destination-based system for business taxation.
Ultimately, the debate over the DBCFT is about how different people assess political risks. House Republicans advocating the plan want good things, and they obviously think the downside risks in the future are outweighed by the ability to finance a larger level of good tax reforms today. Skeptics appreciate that those proponents want good policy, but we worry about the long-run consequences of changes that may (especially when the left sooner or late regains control) enable bigger government.
P.S. This is not the first time that advocates of good policy have bickered with each other. During the 2016 nomination battle, Rand Paul and Ted Cruz proposed tax reform plans that fixed many of the bad problems in the tax code. But they financed some of those changes by including value-added taxes in their plans. In the short run, either plan would have been much better than the current system. But I was critical because I worried that the inclusion of VATs would eventually give statists a tool to further increase the burden of government.
THE CORNER THE ONE AND ONLY. Speaker Ryan’s Use of Reporters’ Recorders to Explain His Border Tax Was Cute — But Misleading
Faced with growing opposition to their border-adjustment tax, congressional Republicans are nonetheless on the offensive trying to sell it. I have expressed my many reasons for opposing the tax, including my disbelief that Republicans would support a massive tax increase alongside what is otherwise a pro-growth tax reform. While they oppose tax increases to pay for spending increases in other contexts and usually make the case that spending increases should be paid for by spending cuts, Republicans continue to push for this massive new source of revenue, in spite of the distortions it would introduce.
Until now, supporters of the tax have used many questionable arguments. For instance, they claim we shouldn’t worry about the protectionist aspect of a tax that imposes a 20 percent rate to imports but exempts exports under the hope that the U.S. dollar will adjust fully and quickly. However, there are reasons to believe that while the U.S. currency will adjust, it won’t adjust fully (Federal Reserve Board chairwoman Janet Yellen is only the latest one to stress that point), it won’t adjust as quickly as they claim (especially if the tax is challenged under the World Trade Organization as the Europeans have warned is going to be the case), and it won’t result in unicorns and rainbows.
But the latest misguided statements about the border-adjustment tax comes from House speaker Paul Ryan — who ought to know better. During a press conference last week, he repeated the claim that United States was at a disadvantage because other countries’ exports are exempted from taxes while U.S. goods aren’t. [Ryan] noted that most other countries already border-adjust their taxes and tax goods based on whether they were consumed in their jurisdiction.
That comment is bound to confuse reporters because, as Mr. Ryan must know, no other country border-adjusts their corporate income tax. They border-adjust their Value Added Tax. Conflating the two is misleading, to say the least.
The Speaker picked up two reporters’ recorders to give an example of how goods are taxed currently. He suggested one was American-made and the other was Japanese-made. Early on, he dropped one of the recorders, saying “oops” and receiving laughter from the reporters. “Here’s what Japan does when they make this tape recorder: When they send it for export they take the tax off of it, and then it comes to America and it’s not taxed, and it comes through to compete against our good, which was taxed. Theirs was untaxed twice,” Ryan said. “When America makes something, like a tape recorder, we tax it, and then we send it to Japan. As it enters Japan it’s taxed again, to compete against their tape recorder,” he continued. “So we are doing it to ourselves. We are hurting our manufacturing and jobs. We are putting a bias against making things in America in the tax code. . . . That is why we think this is very important. This is good manufacturing policy.”
Oh boy, where do I begin? First, it is true that U.S. companies are at a disadvantage but it is not because of other countries’ tax codes. It is because our corporate-income-tax system has the highest rate of all OECD countries and because, unlike most of our competitors, it taxes U.S. companies’ profits no matter where they are earned in the world. The solution to this disadvantage is to reduce the rates and move to a territorial system. Oh, and by the way, unlike what Ryan and other proponents of a border-adjustment tax would like you to believe, you do not need to move to an expansive destination-based-cash-flow tax to have a territorial tax.
Now let me address the cute tape-recorder example used by the speaker. It is totally misleading because it conflates foreign countries corporate tax and VAT taxes and it paints a picture that is incorrect. For instance, he claims that Japanese exports are exempt from taxes. No, Japanese products exported to the U.S. are exempt from the Japanese VAT but the Japanese company is still paying U.S. corporate tax on its U.S. profits. And you know what? In that sense, the Japanese export is treated exactly like the U.S. goods sold in the U.S. In other words, the playing field is even! I repeat: Japanese goods in the U.S. are taxed like U.S. goods in the U.S.
How about U.S. exports in Japan? Well, it gets hit by the Japanese VAT in Japan and by the Japanese corporate tax but so are Japanese goods sold in Japan. Again, the only disadvantage faced by U.S. companies selling tape recorders abroad comes from the U.S. tax system, which requires that income earned in Japan be taxed by Uncle Sam at 35 percent after benefiting from a tax credit for tax paid in Japan. If the U.S. company decides to keep its Japanese income outside the U.S., the U.S. rate won’t apply.
Dan Mitchell explains why the VAT doesn’t change the terms of trade in this video.
Finally, economists have debunked the idea implied by the speaker that foreign VATs give an advantage to foreign exports — and therefor boost foreign exports. It is simply not true. It follows that imposing a border-adjustment tax in the U.S. will not boost U.S. exports either. Period.
Let me summarize this for you:
No, other countries do not border-adjust their corporate income tax.
Comparing other countries’ VATs and our corporate tax is problematic to say the least.
No, foreign exports sold in the U.S. do not have an advantage over U.S. goods sold in the U.S. Foreign VATs do not boost foreign exports.
A border tax in the U.S. will not boost our exports but it will hurt consumers and many U.S. retailers.
The disadvantage faced by U.S. companies exporting goods abroad comes from the terrible worldwide tax and high rates of the U.S. tax regime, not from other countries’ tax system.
The way to fix the U.S. disadvantage is not to create a new expansive tax that would penalize imports in the U.S. — including imports for the benefit of U.S. domestic companies — and would penalize U.S. consumers.
The Border Adjustment Tax, a proposal favored by House Speaker Paul Ryan, has aroused serious opposition from Republican senators.
FEB 21, 2017
Donald Trump is feeling good about taxes. In his gonzo press conference last Thursday, he assured Americans that “very historic tax reform” is absolutely on track and is going to be—wait for it!—“big league.” The week before, he told a bunch of airline CEOs that “big league” reform was “way head of schedule” and that his people would be announcing something “phenomenal” in “two or three weeks.” And at his Orlando pep rally this past weekend, he gushed about his idea for a punitive 35 percent border tax on products manufactured overseas. The magic is happening, people. And soon America’s tax code will be the best, most beautiful in the world.
But here’s the thing. What Trump doesn’t know about the legislative process could overflow the pool at Mar-a Lago. And when it comes to tax reform, even minor changes make Congress lose its mind. Weird fault lines appear, and the next thing you know, warring factions have painted their faces blue and vowed to die on the blood-soaked battlefield before allowing this marginal rate to change or that loophole to close.
Such drama has, in fact, already begun over the proposal percolating in the House. At issue: a provision known as the border adjustment tax—let’s call it BAT—which, shrunk to its essence, incentivizes domestic manufacturing by slapping a 20 percent levy on imports, while making U.S. companies’ export-revenues tax deductible.
BAT fans—most notably House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady—pitch the provision as an economically elegant twofer: an America-First measure that discourages companies from moving operations overseas while creating a revenue stream ($1 trillion every decade or so) that allows the overall corporate tax rate to be slashed.
Opponents—most vocally Senators David Perdue and Tom Cotton—argue that a BAT is another grubby government cash grab that will ultimately hurt consumers when, say, Walmart has to jack up the prices of underwear, bananas, and Playstations. In a February 8 letter to colleagues, Perdue, who spent four decades in the business world, charged that the BAT is “regressive, hammers consumers, and shuts down economic growth.”Thus the battle lines are drawn. And, make no mistake, this will not be some bush-league, penny-ante skirmish. Behind the legislative factions are amassing some of the heaviest hitters in corporate America, ready to spend millions to sway debate on behalf of their team.Roughly speaking, companies that do a lot of exporting dig the BAT (think: Boeing, Merck, and Dow Chemical) while import-dependent retailers (including Target, Nike, and, yes, Walmart) fear it will destroy their bottom lines. The oil industry isn’t feeling much BAT love either. The Koch brothers want it dead, like, yesterday.At this point, anti-BATers have an edge. Why? Partly, because the provision is super complicated and almost impossible to explain in terms that don’t sound like something a coven of economists vomited up. Ask BAT fans why the provision won’t, in fact, hurt retailers or consumers, and you’re instantly hip-deep in talk of currency revaluation, purchasing power, and territorial taxation. Last Wednesday, one day after Paul Ryan tried to educate Senate Republicans on the wonders of BAT at their weekly policy lunch, Tom Cotton (who represents Walmart’s home state of Arkansas) snarked on the Senate floor, “Some ideas are so stupid only an intellectual could believe them.”This is in no way to suggest that the pro-BAT arguments are wrong. They simply don’t push the same buttons as anti-BAT warnings that Congress is poised to screw consumers in order to fund big tax cuts for corporations.For the past few weeks, in fact, an anti-BAT coalition called Americans for Affordable Products has been busy hawking this exact message. “This is a consumer tax—a means by which House Republicans are paying for other tax deductions,” asserted AAP member Brian Dodge. “It’s not about America First. It’s not a trade-deficit reduction tool. It is a pay-for.”AAP is lobbying lawmakers and staffers and doing public outreach. Last Wednesday, it dispatched eight CEOs to chat with Trump and Vice President Pence. “We view our job as leading a large education campaign,” said Dodge. “We believe the more that lawmakers understand about this proposal, the less inclined they’ll be to support it.”Of course, BAT fans are gearing up as well and promise to be equally aggressive. The day after the AAP roll out, the American Made Coalition launched, with an eye toward helping Ryan’s office spread the good word. “It takes time to educate both policy makers and businesses on what’s on the table,” said Brian Reardon, an adviser to the group.There is no place for subtlety in this war. Part of BAT supporters’ argument is that, without the provision, tax overhaul will implode altogether. Message: Get on board or kiss your once-in-a-lifetime reform opportunity good-bye.It’s a question of Senate math. To pass with a simple majority (and avoid a filibuster by Democrats), the GOP’s plan must go through under the procedure known as reconciliation. But to qualify for reconciliation, the package–which slashes both corporate and upper-bracket taxes–cannot blow a hole in the long-term budget. Without the $1 trillion in revenues from BAT, say advocates, there’s no way that hole can be plugged.“This is the only way at these rates and keeping things revenue neutral,” insisted a senior Republican aide. There is no other viable option. Period. End of story.But anti-BATers are eyeing a different Senate equation. To amass even a simple majority of votes, the BAT can lose only two of the 52 Republican members. (Unless Democrats cross the aisle, of course.) In addition to Cotton’s and Perdue’s open hostility, Senators John Boozman, Mike Rounds, John Cornyn, Tim Scott, and Mike Lee have all expressed reservations. “I have real concerns that this piece of the House blueprint will cause more disruption than necessary,” Lee said. “Will the dollar suddenly shoot up by 20 percent? Will U.S. manufacturers have to redo their international supply chains? These are all open questions.”
With the provision’s Senate prospects iffy, there’s less incentive for House conservatives to support something that smells even faintly like a tax. Both the current chairman of the Freedom Caucus, Mark Meadows, and the former chairman, Jim Jordan, have said they’d like reform done without a BAT.
“My reasoning is very basic,” Jordan told me. “Why in the world would we want to add another revenue stream?” You can debate the impact on exchange rates and purchasing power all day, said Jordan, but that doesn’t address many conservatives’ core objection. “We come at it from fundamental perspective,” he said. “The idea that you’re going to add an entirely new tax is a big problem.”
(BAT fans, for the record, dispute that this is a new tax. It is, they insist, replacing the existing system with an entirely new, far superior one that must be looked at, as Reardon put it, “holistically.”)
The only thing everyone can agree on is that this will be a long, ugly fight. If Trump drops his tariff idea and embraces BAT, it could boost the cause. But even then, he’d need to do major arm-twisting to get Senate skeptics on board (especially with the likes of Walmart and the Kochs twisting the other arm.) Like it or not, this is what the political big leagues are like: slow, messy, and infuriating.
The up side for Trump: He’ll have time to throw a lot more pep rallies on this topic before anything gets decided.
The Internal Revenue Service has recently released new data on individual income taxes for calendar year 2014, showing the number of taxpayers, adjusted gross income, and income tax shares by income percentiles.
The data demonstrates that the U.S. individual income tax continues to be very progressive, borne mainly by the highest income earners.
In 2014, 139.6 million taxpayers reported earning $9.71 trillion in adjusted gross income and paid $1.37 trillion in individual income taxes.
The share of income earned by the top 1 percent of taxpayers rose to 20.6 percent in 2014. Their share of federal individual income taxes also rose, to 39.5 percent.
In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all individual income taxes while the bottom 50 percent paid the remaining 2.7 percent.
The top 1 percent paid a greater share of individual income taxes (39.5 percent) than the bottom 90 percent combined (29.1 percent).
The top 1 percent of taxpayers paid a 27.1 percent individual income tax rate, which is more than seven times higher than taxpayers in the bottom 50 percent (3.5 percent).
Reported Income and Taxes Paid Both Increased Significantly in 2014
Taxpayers reported $9.71 trillion in adjusted gross income (AGI) on 139.5 million tax returns in 2014. Total AGI grew by $675 billion from the previous year’s levels. There were 1.2 million more returns filed in 2014 than in 2013, meaning that average AGI rose by $4,252 per return, or 6.5 percent.
Meanwhile, taxpayers paid $1.37 trillion in individual income taxes in 2014, an 11.5 percent increase from taxes paid in the previous year. The average individual income tax rate for all taxpayers rose from 13.64 percent to 14.16 percent. Moreover, the average tax rate increased for all income groups, except for the top 0.1 percent of taxpayers, whose average rate decreased from 27.91 percent to 27.67 percent.
The most likely explanation behind the higher tax rates in 2014 is a phenomenon known as “real bracket creep.”  As incomes rise, households are pushed into higher tax brackets, and are subject to higher overall tax rates on their income. On the other hand, the likely reason why the top 0.1 percent of households saw a slightly lower tax rate in 2014 is because a higher portion of their income consisted of long-term capital gains, which are subject to lower tax rates.
The share of income earned by the top 1 percent rose to 20.58 percent of total AGI, up from 19.04 percent in 2013. The share of the income tax burden for the top 1 percent also rose, from 37.80 percent in 2013 to 39.48 percent in 2014.
Table 1. Summary of Federal Income Tax Data, 2014
Number of Returns
Adjusted Gross Income ($ millions)
Share of Total Adjusted Gross Income
Income Taxes Paid ($ millions)
Share of Total Income Taxes Paid
Income Split Point
Average Tax Rate
Note: Does not include dependent filers
High-Income Americans Paid the Majority of Federal Taxes
In 2014, the bottom 50 percent of taxpayers (those with AGIs below $38,173) earned 11.27 percent of total AGI. This group of taxpayers paid approximately $38 billion in taxes, or 2.75 percent of all income taxes in 2014.
In contrast, the top 1 percent of all taxpayers (taxpayers with AGIs of $465,626 and above) earned 20.58 percent of all AGI in 2014, but paid 39.48 percent of all federal income taxes.
In 2014, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined. The top 1 percent of taxpayers paid $543 billion, or 39.48 percent of all income taxes, while the bottom 90 percent paid $400 billion, or 29.12 percent of all income taxes.
High-Income Taxpayers Pay the Highest Average Tax Rates
The 2014 IRS data shows that taxpayers with higher incomes pay much higher average individual income tax rates than lower-income taxpayers.
The bottom 50 percent of taxpayers (taxpayers with AGIs below $38,173) faced an average income tax rate of 3.45 percent. As household income increases, the IRS data shows that average income tax rates rise. For example, taxpayers with AGIs between the 10th and 5th percentile ($133,445 and $188,996) pay an average rate of 13.7 percent – almost four times the rate paid by those in the bottom 50 percent.
The top 1 percent of taxpayers (AGI of $465,626 and above) paid the highest effective income tax rate, at 27.2 percent, 7.9 times the rate faced by the bottom 50 percent of taxpayers.
Taxpayers at the very top of the income distribution, the top 0.1 percent (with AGIs over $2.14 million), paid an even higher average tax rate, of 27.7 percent.
5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 2. Number of Federal Individual Income Tax Returns Filed 1980–2014 (Thousands)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 3. Adjusted Gross Income of Taxpayers in Various Income Brackets, 1980–2014 ($Billions)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 4. Total Income Tax after Credits, 1980–2014 ($Billions)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 5. Adjusted Gross Income Shares, 1980–2014 (percent of total AGI earned by each group)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 6. Total Income Tax Shares, 1980–2014 (percent of federal income tax paid by each group)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Table 7. Dollar Cut-Off, 1980–2014 (Minimum AGI for Tax Returns to Fall into Various Percentiles; Thresholds Not Adjusted for Inflation)
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
Source: Internal Revenue Service.
Between 5% & 10%
Between 10% & 25%
Between 25% & 50%
Table 8. Average Tax Rate, 1980–2014 (Percent of AGI Paid in Income Taxes)
Source: Internal Revenue Service.
The Tax Reform Act of 1986 changed the definition of AGI, so data above and below this line not strictly comparable
The IRS changed methodology, so data above and below this line not strictly comparable
For data prior to 2001, all tax returns that have a positive AGI are included, even those that do not have a positive income tax liability. For data from 2001 forward, returns with negative AGI are also included, but dependent returns are excluded.
Income tax after credits (the measure of “income taxes paid” above) does not account for the refundable portion of EITC. If it were included, the tax share of the top income groups would be higher. The refundable portion is classified as a spending program by the Office of Management and Budget and therefore is not included by the IRS in these figures.
The only tax analyzed here is the federal individual income tax, which is responsible for more than 25 percent of the nation’s taxes paid (at all levels of government). Federal income taxes are much more progressive than federal payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes.
AGI is a fairly narrow income concept and does not include income items like government transfers (except for the portion of Social Security benefits that is taxed), the value of employer-provided health insurance, underreported or unreported income (most notably that of sole proprietors), income derived from municipal bond interest, net imputed rental income, and others.
The unit of analysis here is that of the tax return. In the figures prior to 2001, some dependent returns are included. Under other units of analysis (like the Treasury Department’s Family Economic Unit), these returns would likely be paired with parents’ returns.
These figures represent the legal incidence of the income tax. Most distributional tables (such as those from CBO, Tax Policy Center, Citizens for Tax Justice, the Treasury Department, and JCT) assume that the entire economic incidence of personal income taxes falls on the income earner.
 There is strong reason to believe that capital gains realizations were unusually depressed in 2013, due to the increase in the top capital gains tax rate from 15 percent to 23.8 percent. In 2013, capital gains accounted for 26.6 percent of the income of taxpayers with over $1 million in AGI received, compared to 31.7 percent in 2014 (these calculations apply for net capital gains reported on Schedule D). Table 1.4, Publication 1304, “Individual Income Tax Returns 2014,” Internal Revenue Service, https://www.irs.gov/uac/soi-tax-stats-individual-income-tax-returns-publication-1304-complete-report.
 Here, “average income tax rate” is defined as income taxes paid divided by adjusted gross income.
Story 2: Stagnating United States Economy — The Great Stagnation — Videos —
American Stasis (Episode 3/5)
Why Governments Create Inflation
Tyler Cowen, “The Complacent Class”
TEDxEast – Tyler Cowen – The Great Stagnation
Tyler Cowen: The Great Stagnation
The American Dream and the Complacent Class
The Complacent Class (Episode 1/5)
The New Era of Segregation (Episode 2/5)
American Stasis (Episode 3/5)
The Missing Men (Episode 4/5)
Tyler Cowen: The Rise and Fall of the Chinese Economy
The Great Stagnation by Tyler Cowen
National Income and Product Accounts
Gross Domestic Product: Fourth Quarter and Annual 2016 (Third Estimate)
Corporate Profits: Fourth Quarter and Annual 2016
Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the fourth quarter of
2016 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the
third quarter of 2016, real GDP increased 3.5 percent.
The GDP estimate released today is based on more complete source data than were available for the
"second" estimate issued last month. In the second estimate, the increase in real GDP was 1.9 percent.
With this third estimate for the fourth quarter, the general picture of economic growth remains largely
the same; personal consumption expenditures (PCE) increased more than previously estimated (see
"Updates to GDP" on page 2).
Real gross domestic income (GDI) increased 1.0 percent in the fourth quarter, compared with an
increase of 5.0 percent in the third. The average of real GDP and real GDI, a supplemental measure of
U.S. economic activity that equally weights GDP and GDI, increased 1.5 percent in the fourth quarter,
compared with an increase of 4.3 percent in the third quarter (table 1).
The increase in real GDP in the fourth quarter reflected positive contributions from PCE, private
inventory investment, residential fixed investment, nonresidential fixed investment, and state and local
government spending that were partly offset by negative contributions from exports and federal
government spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2).
The deceleration in real GDP in the fourth quarter reflected downturns in exports and in federal
government spending, an acceleration in imports, and a deceleration in nonresidential fixed investment
that were partly offset by accelerations in private inventory investment and in PCE, and upturns in
residential fixed investment and in state and local government spending.
Current-dollar GDP increased 4.2 percent, or $194.1 billion, in the fourth quarter to a level of $18,869.4
billion. In the third quarter, current-dollar GDP increased 5.0 percent, or $225.2 billion (table 1 and
The price index for gross domestic purchases increased 2.0 percent in the fourth quarter, compared
with an increase of 1.5 percent in the third quarter (table 4). The PCE price index increased 2.0 percent,
compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index
increased 1.3 percent, compared with an increase of 1.7 percent (appendix table A).
Updates to GDP
The upward revision to the percent change in real GDP primarily reflected upward revisions to PCE and
to private inventory investment that were partly offset by downward revisions to nonresidential fixed
investment and to exports. Imports, which are a subtraction in the calculation of GDP, were revised
upward. For more information, see the Technical Note. For information on updates to GDP, see the
"Additional Information" section that follows.
Advance Estimate Second Estimate Third Estimate
(Percent change from preceding quarter)
Real GDP 1.9 1.9 2.1
Current-dollar GDP 4.0 3.9 4.2
Real GDI --- --- 1.0
Average of Real GDP and Real GDI --- --- 1.5
Gross domestic purchases price index 2.0 1.9 2.0
PCE price index 2.2 1.9 2.0
Real GDP increased 1.6 percent in 2016 (that is, from the 2015 annual level to the 2016 annual level),
compared with an increase of 2.6 percent in 2015 (table 1).
The increase in real GDP in 2016 reflected positive contributions from PCE, residential fixed investment,
state and local government spending, exports, and federal government spending that were partly offset
by negative contributions from private inventory investment and nonresidential fixed investment.
Imports, which are a subtraction in the calculation of GDP, increased (table 2).
The deceleration in real GDP from 2015 to 2016 reflected downturns in private inventory investment
and in nonresidential fixed investment and decelerations in PCE, in residential fixed investment, and in
state and local government spending that were partly offset by a deceleration in imports and
accelerations in federal government spending and in exports.
Current-dollar GDP increased 3.0 percent, or $532.5 billion, in 2016 to a level of $18,569.1 billion,
compared with an increase of 3.7 percent, or $643.5 billion, in 2015 (table 1 and table 3).
Real GDI increased 1.6 percent in 2016, compared with an increase of 2.5 percent in 2015 (table 1).
The price index for gross domestic purchases increased 1.0 percent in 2016, compared with an increase
of 0.4 percent in 2015 (table 4).
During 2016 (that is, measured from the fourth quarter of 2015 to the fourth quarter of 2016), real GDP
increased 2.0 percent, compared with an increase of 1.9 percent during 2015. The price index for gross
domestic purchases increased 1.5 percent during 2016, compared with an increase of 0.4 percent during
2015. Real GDI increased 1.9 percent during 2016, compared with an increase of 1.5 percent during
2015 (table 7).
Corporate Profits (table 12)
Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) increased $11.2 billion in the fourth quarter of 2016, compared with an
increase of $117.8 billion in the third quarter.
Profits of domestic financial corporations increased $26.5 billion in the fourth quarter, compared with
an increase of $50.1 billion in the third. Profits of domestic nonfinancial corporations decreased $60.4
billion, in contrast to an increase of $66.4 billion. The estimate of nonfinancial corporate profits in the
fourth quarter was reduced by a $4.95 billion ($19.8 billion at an annual rate) settlement between a U.S.
subsidiary of Volkswagen and the federal and state governments. For more information, see the FAQ,
"What are the effects of the Volkswagen buyback deal on GDP and the national accounts?”. The
rest-of-the-world component of profits increased $45.1 billion, compared with an increase of $1.3 billion.
This measure is calculated as the difference between receipts from the rest of the world and payments to
the rest of the world. In the fourth quarter, receipts increased $9.1 billion, and payments decreased
In 2016, profits from current production decreased $2.3 billion, compared with a decrease of $64.0
billion in 2015. Profits of domestic financial corporations increased $20.5 billion, compared with an
increase of $8.5 billion. Profits of domestic nonfinancial corporations decreased $47.0 billion, compared
with a decrease of $47.3 billion. The rest-of-the-world component of profits increased $24.3 billion, in
contrast to a decrease of $25.2 billion.
* * *
Next release: April 28, 2017 at 8:30 A.M. EDT
Gross Domestic Product: First Quarter 2017 (Advance Estimate)
Additional Resources available at www.bea.gov:
• Stay informed about BEA developments by reading the BEA blog, signing up for BEA’s email
subscription service, or following BEA on Twitter @BEA_News.
• Historical time series for these estimates can be accessed in BEA’s Interactive Data Application.
• Access BEA data by registering for BEA’s Data Application Programming Interface (API).
• For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business.
• BEA's news release schedule
• NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts
Gross domestic product (GDP) is the value of the goods and services produced by the nation’s economy
less the value of the goods and services used up in production. GDP is also equal to the sum of personal
consumption expenditures, gross private domestic investment, net exports of goods and services, and
government consumption expenditures and gross investment.
Gross domestic income (GDI) is the sum of incomes earned and costs incurred in the production of GDP.
In national economic accounting, GDP and GDI are conceptually equal. In practice, GDP and GDI differ
because they are constructed using largely independent source data. Real GDI is calculated by deflating
gross domestic income using the GDP price index as the deflator, and is therefore conceptually
equivalent to real GDP.
Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is,
at “market value.” Also referred to as “nominal estimates” or as “current-price estimates.”
Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.
The gross domestic purchases price index measures the prices of final goods and services purchased by
The personal consumption expenditure price index measures the prices paid for the goods and services
purchased by, or on the behalf of, “persons.”
Profits from current production, referred to as corporate profits with inventory valuation adjustment
(IVA) and capital consumption adjustment (CCAdj) in the NIPAs, is a measure of the net income of
corporations before deducting income taxes that is consistent with the value of goods and services
measured in GDP. The IVA and CCAdj are adjustments that convert inventory withdrawals and
depreciation of fixed assets reported on a tax-return, historical-cost basis to the current-cost economic
measures used in the national income and product accounts.
For more definitions, see the Glossary: National Income and Product Accounts.
Annual rates. Quarterly values are expressed at seasonally-adjusted annual rates (SAAR), unless
otherwise specified. Dollar changes are calculated as the difference between these SAAR values. For
detail, see the FAQ “Why does BEA publish estimates at annual rates?”
Percent changes in quarterly series are calculated from unrounded data and are displayed at annual
rates, unless otherwise specified. For details, see the FAQ “How is average annual growth calculated?”
Quantities and prices. Quantities, or “real” volume measures, and prices are expressed as index
numbers with a specified reference year equal to 100 (currently 2009). Quantity and price indexes are
calculated using a Fisher-chained weighted formula that incorporates weights from two adjacent
periods (quarters for quarterly data and annuals for annual data). “Real” dollar series are calculated by
multiplying the published quantity index by the current dollar value in the reference year (2009) and
then dividing by 100. Percent changes calculated from real quantity indexes and chained-dollar levels
are conceptually the same; any differences are due to rounding.
Chained-dollar values are not additive because the relative weights for a given period differ from those
of the reference year. In tables that display chained-dollar values, a “residual” line shows the difference
between the sum of detailed chained-dollar series and its corresponding aggregate.
Updates to GDP
BEA releases three vintages of the current quarterly estimate for GDP: "Advance" estimates are
released near the end of the first month following the end of the quarter and are based on source data
that are incomplete or subject to further revision by the source agency; “second” and “third” estimates
are released near the end of the second and third months, respectively, and are based on more detailed
and more comprehensive data as they become available.
Annual and comprehensive updates are typically released in late July. Annual updates generally cover at
least the 3 most recent calendar years (and their associated quarters) and incorporate newly available
major annual source data as well as some changes in methods and definitions to improve the accounts.
Comprehensive (or benchmark) updates are carried out at about 5-year intervals and incorporate major
periodic source data, as well as major conceptual improvements.
The table below shows the average revisions to the quarterly percent changes in real GDP between
different estimate vintages, without regard to sign.
Vintage Average Revision Without Regard to Sign
(percentage points, annual rates)
Advance to second 0.5
Advance to third 0.6
Second to third 0.2
Advance to latest 1.1
Note - Based on estimates from 1993 through 2015. For more information on GDP updates, see Revision
Information on the BEA Web site.
The larger average revision from the advance to the latest estimate reflects the fact that periodic
comprehensive updates include major statistical and methodological improvements.
Unlike GDP, an advance current quarterly estimate of GDI is not released because data on domestic
profits and on net interest of domestic industries are not available. For fourth quarter estimates, these
data are not available until the third estimate.
Mark Steyn: Trump hit a reset button for the world
President Trump’s Syria policy raises concerns
Sen. Paul: We didn’t have the debate, we simply went to war
A look at the intel that led to US strike on Syrian airbase
US Strikes Syria: Chemical attack not the first in Syrian civil war
Marco Rubio: President had legal, moral authority to attack
Israeli PM Netanyahu ‘fully supports’ US strike on Syria
President Trump Orders U.S. Airstrike on Syria
Trump turns on Assad: How will US strikes impact war in Syria? (part 1)
BREAKING! WE’RE AT WAR! TRUMP JUST LAUNCHED A MASSIVE STRIKE AGAINST SYRIA WW3 HAS BEGUN!!!
Issue Analysis: Trump, Assad, Syria, China, North Korea, UN Resolutions, Russia and What’s Next?
President Donald Trump Bombs Syria
Syria Chemical Attack: Push For Ousting Bashar al-Assad
Seymour Hersh: Obama “Cherry-Picked” Intelligence on Syrian Chemical Attack to Justify U.S. Strike
Global Empire – The World According to Seymour Hersh [Part Two]
Global Empire – The World According to Seymour Hersh [Part One]
Turkey’s interests in the Syrian civil war
Saudi Arabia’s role in the Syrian civil war
Why Do Saudi Arabia And Iran Hate Each Other?
TURKEY vs SYRIA Military Power Comparison | Turkish Army VS Syrian Arab Army | 2016
Toxicity of Phosgene with Audio
FSA use poison gas on SAA and Syrian people supplied by Turkey
Gas warfare in the First World War
What is Sarin Gas?
Published on Sep 7, 2013
Hank discusses the chemistry of sarin, the nerve agent that killed more than 1400 people in a chemical weapons attack in Syria.
Like SciShow? Want to help support us, and also get things to put on your walls, cover your torso and hold your liquids? Check out our awesome products over at DFTBA Records: http://dftba.com/artist/52/SciShow
AMERICA’S TOP GENERAL JUST GAVE TRUMP SOMETHING THAT WILL SCARE NORTH KOREA TO DEATH!
Published on Apr 7, 2017
Sub for more: http://nnn.is/the_new_media | Danny Gold for Liberty Writers reports, Anyone who has been watching the news recently is sure to have heard all about North Korea and their nukes. They also know President Donald Trump is NOT happy about it and he and Mattis are ready to STRIKE BACK!
Why did Donald Trump strike al-Shayrat air base?
The strike on al-Shayrat air base near the western Syrian city of Homs was both a symbolic and a tactical one.
The airfield is not just a valuable military target, it is also the one from which the Syrian government launched its chemical attack on Tuesday.
Shayrat is one of the largest and most active Syrian Air Force bases, which has served as the nerve centre of its missions against rebels in Homs, as well as Palmyra, where government forces have been battling Islamic State of Iraq and the Levant (Isil).
Watch | Donald Trump: Syria strike in ‘vital’ US interest
However, it is believed that the US gave advance warning of the missile strike to Russia, which gave the Syrian military some time to move most of its assets to another base.
The Russians, who intervened militarily on behalf of the Bashar al-Assad regime in October 2015, have aircraft stationed at bases across Syria and the US could not risk accidentally hitting one.
Russia reportedly reinforced the base and built additional runways before beefing up its operations there.
Maj Gen. Igor Konashenkov, Russian defense ministry spokesman, reported on Friday that only 23 of the 59 Tomahawk cruise missiles reached the air base.
The raid damaged one of its two runways, according to pictures shared on social media which also showed severe fire damage to other parts of the base.
Rami Adbulrahman, director of UK-based Syrian Observatory for Human Rights monitor said he was told 90 per cent of the base was destroyed and senior airforce commander, Brigadier Khalil Issa Ibrahim, was among the seven reported killed.
Before 2013 the base was used to store chemical weapons but nothing was targeted that could have contained them now.
It was believed there may have been sarin gas stored in one warehouse but that was avoided.
Maj Konashenkov said they destroyed six MiG-23 fighter jets of the Syrian air force which were under repairs, but did not damage other warplanes.
A former pilot who was stationed at Shayrat before he defected said Shayrat could hold up to 45 aircraft and that had they all been hit it would have had a major impact on the Syrian military’s strike capacity.
The mayor of Homs criticised the strikes, saying they only aided terrorists as the base was the main operations centre for carrying out strikes against Isil.
Fares Shehabi, an MP for Aleppo, posted on Twitter: “Trump attacked an airport solely dedicated to fighting ISIS in central Syria and providing aid to besieged civilians in Deir Ezzor.”
Jumping to conclusions; something is not adding up in Idlib chemical weapons attack
By Paul Antonopoulos
BEIRUT, LEBANON (4:47 P.M.) – At least 58 people were killed in a horrific gas attack in the Idlib Governorate this morning. However, even before investigations could be conducted and for evidence to emerge, Federica Mogherini, the Italian politician High Representative of the European Union (EU) for Foreign Affairs and Security Policy, condemned the Syrian government stating that the “Assad regime bears responsibility for ‘awful’ Syria ‘chemical’ attack.”
The immediate accusation from a high ranking EU official serves a dangerous precedent where public outcry can be made even before the truth surrounding the tragedy can emerge
Merely hours after the alleged chemical weapons attack in Khan Sheikhun, supposedly by the Syrian government, holes are beginning to emerge from opposition sources, discrediting the Al-Qaeda affiliated White Helmets claims.
For one, seen in the above picture, the White Helmets are handling the corpses of people without sufficient safety gear, most particularly with the masks mostly used , as well as no gloves. Although this may seem insignificant, understanding the nature of sarin gas that the opposition claim was used, only opens questions.
Within seconds of exposure to sarin, the affects of the gas begins to target the muscle and nervous system. There is an almost immediate release of the bowels and the bladder, and vomiting is induced. When sarin is used in a concentrated area, it has the likelihood of killing thousands of people. Yet, such a dangerous gas, and the White Helmets are treating bodies with little concern to their exposed skin. This has to raise questions.
It also raises the question why a “doctor” in a hospital full of victims of sarin gas has the time to tweet and make video calls. This will probably be dismissed and forgotten however.
It is known that about 250 people from Majdal and Khattab were kidnapped by Al-Qaeda terrorists last week. Local sources have claimed that many of those dead from the chemical weapons were those from Majdal and Khattab.
ALSO READIn Video | ISIS Hunters secure gas fields in east Palmyra
This would suggest that on the eve of upcoming peace negotiations, terrorist forces have once again created a false flag scenario. This bares resemblance to the Ghouta chemical weapons attack in 2013 where the Syrian Army was accused of using the weapons of mass destruction on the day that United Nations Weapon’s Inspectors arrived in Damascus.
Later, in a separate chemical weapon usage allegation, Carla del Ponte, a UN weapons inspector said that there was no evidence that the government had committed the atrocity. This had however not stopped the calls for intervention against the Syrian government, a hope that the militant forces wished to eventuate from their use of chemical weapons against civilians in Khan-al-Assal.
Therefore, it is completely unsurprising that Orient TV has already prepared a “media campaign” to cover the Russian and Syrian airstrikes in Hama countryside against terrorist forces, with the allegations that the airforces have been using chemical weapons. And most telling, there announcement of covering the use of chemical weapons by the Syrian government, hours before this allegation even emerged…….. Seems like someone forgot to tell him that it would not occur for a few more hours before his tweet.
Meanwhile, pick up trucks have been photographed around bodies of those killed. Again, it must be questioned why there are people around sarin gas without any protective gear, and not affected at all when it can begin attacking the body within seconds? Also, the pick up trucks remain consistent to what local sources have said that many of those dead were kidnapped by Al-Qaeda terrorists from pro-government towns in rural Hama.
ALSO READUpdate from Syrian airbase targeted by US missiles
Also, what is brought into question is where the location of the hose is coming from in the below picture, a dugout carved into the rock. This also suggests that the location is at a White Helmets base where there are dug out hiding spots carved into the mountainside and where they have easy access to equipment, as highlighted by Twitter user Ian Grant.
The army “has not and does not use them, not in the past and not in the future, because it does not have them in the first place,” a military source said.
And this of course begs the question. With the Syrian Army and its allies in a comfortable position in Syria, making advances across the country, and recovering lost points in rural Hama, why would they now resort to using chemical weapons? It is a very simple question with no clear answer. It defies any logic that on the eve of a Syria conference in Brussels and a week before peace negotiations are to resume, that the Syrian government would blatantly use chemical weapons. All evidence suggests this is another false chemical attack allegation made against the government as seen in the Khan-al-Assal 2013 attack where the terrorist groups hoped that former President Obama’s “red-line” would be crossed leading to US-intervention in Syria against the government.
Most telling however, is that most recent report shows that the government does not deny striking Khan Sheikhun. Al-Masdar’s Yusha Yuseef was informed by the Syrian Army that the air force targeted a missile factory in Khan Sheikoun, using Russian-manufactured Su-22 fighter jet to carry out the attack. Most importantly, the Su-22’s bombs are unique and cannot be filled with any chemical substances, which is different than bombs dropped from attack helicopters. Yuseef was then told that the Syrian Air Force did not know there were any chemical substances inside the missile factory in Khan Sheikhoun. It remains to be known whether there actually were chemicals in the missile factory targeted by the airstrikes, or whether the terrorist forces used gas on the kidnapped civilians from the pro-government towns and brought them in the lorry trucks to the site of the airstrikes. Whether they were gassed by the militant forces, or the airstrikes caused a chemical weapon factory to explode, the gruesome deaths of children, seen foaming in the mouth because of the gas, lays in the hands of the terrorists.
ALSO READAutopsies confirm Assad behind chemical attack in southern Idlib: Turkish state media
Therefore, it becomes evident that the area targeted was definitely a terrorist location, where it is known that the White Helmets share operation rooms with terrorist forces like Al-Qaeda as seen after the liberation of eastern Aleppo. Civilians and fighting forces, including Kurdish militias, have all claimed that militant groups that operate in Idlib, Hama and Aleppo countrysides, have used chemical weapons in the past. Therefore, before the war cries begin and the denouncement of the government from high officials in power positions begin, time must be given so that all evidence can emerge. However, this is an important factor that has never existed in the Syrian War, and the terrorist forces continue to hope that Western-intervention against the government will occur, at the cost of the lives of innocent civilians.
London’s Daily Mail in a 2013 article confirmed the existence of an Anglo-American project endorsed by the White House (with the assistance of Qatar) to wage a chemical weapons attack on Syria and place the blame of Bashar Al Assad.
The following Mail Online article was published and subsequently removed. Note the contradictory discourse: “Obama issued warning to Syrian president Bashar al Assad”, “White House gave green light to chemical weapons attack”.
The Pentagon’s Training of “Rebels” (aka Al Qaeda Terrorists) in the Use of Chemical Weapons
CNN accuses Bashar Al Assad of killing his own people while also acknowledging that the “rebels” are not only in possession of chemical weapons, but that these “moderate terrorists” affiliated with Al Nusra are trained in the use of chemical weapons by specialists on contract to the Pentagon.
In a twisted logic, the Pentagon’s mandate was to ensure that the rebels aligned with Al Qaeda would not acquire or use WMD, by actually training them in the use of chemical weapons (sounds contradictory):
“The training [in chemical weapons], which is taking place in Jordan and Turkey, involves how to monitor and secure stockpiles and handle weapons sites and materials, according to the sources. Some of the contractors are on the ground in Syria working with the rebels to monitor some of the sites, according to one of the officials.
The nationality of the trainers was not disclosed, though the officials cautioned against assuming all are American. (CNN, December 09, 2012, emphasis added)
screenshot of the CNN article, the original link has been redirected to CNN blogs,
And these are the same terrorists (trained by the Pentagon) who are the alleged target of Washington’s counterterrorism bombing campaign initiated by Obama in August 2014:
“The Pentagon scheme established in 2012 consisted in equipping and training Al Qaeda rebels in the use of chemical weapons, with the support of military contractors hired by the Pentagon, and then holding the Syrian government responsible for using the WMD against the Syrian people.
What is unfolding is a diabolical scenario –which is an integral part of military planning– namely a situation where opposition terrorists advised by Western defense contractors are actually in possession of chemical weapons.
This is not a rebel training exercise in non-proliferation. While president Obama states that “you will be held accountable” if “you” (meaning the Syrian government) use chemical weapons, what is contemplated as part of this covert operation is the possession of chemical weapons by the US-NATO sponsored terrorists, namely “by our” Al Qaeda affiliated operatives, including the Al Nusra Front which constitutes the most effective Western financed and trained fighting group, largely integrated by foreign mercenaries. In a bitter twist, Jabhat al-Nusra, a US sponsored “intelligence asset”, was recently put on the State Department’s list of terrorist organizations.
The West claims that it is coming to the rescue of the Syrian people, whose lives are allegedly threatened by Bashar Al Assad. The truth of the matter is that the Western military alliance is not only supporting the terrorists, including the Al Nusra Front, it is also making chemical weapons available to its proxy “opposition” rebel forces.
The next phase of this diabolical scenario is that the chemical weapons in the hands of Al Qaeda operatives will be used against civilians, which could potentially lead an entire nation into a humanitarian disaster.
The broader issue is: who is a threat to the Syrian people? The Syrian government of Bashar al Assad or the US-NATO-Israel military alliance which is recruiting “opposition” terrorist forces, which are now being trained in the use of chemical weapons.” (Michel Chossudovsky, May 8, 2013, minor edit)
During the World War I, a new, deadly type of weapon was used for the first time; toxic gas. Considered uncivilised prior to the war, the development and military usage of poisonous gas grenades was soon called for by the demands of both sides to find a new way to overcome the stalemate of unforeseen trench warfare.
First used at the Second Battle of Ypres on 22 April 1915, cylinders filled with toxic gas soon became one of the most devastating and effective weapons used in the entire Great War, killing more than 90,000 soldiers and injuring about 1.25 million. In this article, we are going to explore the 4 of most deadly chemical weapons ever conceived, their history, usage, and effects on the human beings.
While Germans were releasing the mustard gas in year 1917 near the Belgian city of Ypres for the first time, chemist Frederic Guthrie was most likely turning in his grave. In year 1860, this British professor discovered the mustard gas, and also experienced its toxic effects first-hand for the first time. 57 years later, after its first military usage at Ypres, it got its infamous nickname, Yperite.
In the beginning, Germans planned to use the mustard gas only as a paralyzing agent. However, they soon found out, that when in sufficient concentrations, this gas could be easily lethal to the majority of the enemy soldiers.
Soldiers after the mustard gas attack
Due to its dangerous properties, mustard gas soon became a popular chemical weapon, used in WWII, during the North Yemen Civil War, and even by Saddam Husein in year 1988. Even 150 years after its discovery, antidote is still to be discovered.
Pure mustard gas is colourless, oily liquid at room temperature. When used in its impure form, as warfare agent, it is usually green-brown in color and has an specific odor resembling mustard or garlic, hence the name. Yperite fumes are more than 6 times heavier than air, staying near the ground for several hours, effectively filling and contaminating enemy’s trenches, and killing everyone without proper protection.
Mustard gas shells
Lethal dose for an adult man weighing 160 lbs is approximately 7,5 g of liquid mustard gas, when in contact with his skin for several minutes. However, when used in its gaseous form, lethality greatly depends on its concentration and on the length of exposure. Gas mask is usually not enough to be protected from this gas; it can easily penetrate the skin and kill the victim from inside. It easily passes through most of the clothes, shoes or other materials. For instance, standard rubber gloves could protect the skin for only about ten minutes.
4 or 6 hours after exposure, burning sensation appears in the affected areas, followed by reddening of the skin. After next 16 hours, large blisters appear on the affected skin, subsequently causing severe scarring and sometimes even necrosis. If the eyes were affected, temporary or permanent blindness typically occurs after few days.
Soldier with mustard gas burns
When inhaled, first symptoms start to manifest themselves after several hours, starting with chest pain, bloody coughing and vomiting, followed by muscle spasms. Death usually occurs within 3 days, caused either by lung edema or heart failure.
In year 1812, 22-year old British amateur chemist John Davy syntetized the phosgene gas for the first time. However, it didn’t contain any phosphorus, its name was derived from greek words phos(light) and gennesis(birth). John Davy probably assumed that his invention would be used in a more sensible way, however, on 9.th of December, 88 tons of phosgene were released during the trench warfare in France, killing 69 men and seriously injuring more then 1,200.
U.S. Army phosgene identification poster(WWII)
Germans were satisfied by the results, so they soon started using grenades filled by phosgene in combat. It accounts for more than 60% of all deaths caused by the chemical warfare during the First World War, more than chlorine and mustard gas combined.
During the Second World War, most soldiers were well-prepared for the possible use of this deadly gas, so the casualties were nowhere that high. However, phosgene-filled grenades used during the 1942 Battle of Kerch by Nazi Germany allegedly injured at least 10,000 Soviet soldiers.
British casualties after German phosgene attack
Which deadly properties does this gas possess? At low temperatures, it is a colourless liquid. However, when heated to more than 8 degrees celsius, it evaporates quickly. Its odor has been often described by the survivors as pleasant, similar to newly mown hay or wet grass. After release, it contaminates the area for about 10 minutes, double the time in the winter. When compared to chlorine, phosgene has a major advantage; first symptoms start to manifest themselves after much longer time period, usually after more than five minutes, allowing more phosgene to be inhaled.
After one inhales high concentrations of this lethal gas, his chances of survival are very mild. After few minutes, he is likely to die of suffocation, because phosgene aggresively disrupts the blood-air barrier in the lungs.
Australian soldiers wearing gas masks(WWI)
After inhaling less concentrated phosgene, you might be little bit better off. One hour after exposure, first symptoms include strong burning sensation in pharynx and trachea, severe headache and vomiting, followed by pulmonary edema(swelling and fluid buildup), which often leads to suffocation.
To this day, phosgene remains one of the most dangerous chemical weapons in the world. Although not as deadly as sarin or nerve gas, it is very easy to manufacture; no wonder it’s often used during terrorist attacks. Homemade phosgene grenade can be easily created by exposing a bottle of chloroform to UV-light source for a few days.
If previous two chemicals weren’t dangerous enough, here comes the sarin, often known as the most powerful of all nerve agents.
Sarin was developed back in 1938 by a group of 4 German scientists, Scharder, Ambros, Rudiger and van der Linde, during their research of pesticides. During the WWII, this deadly gas was first used by the Nazi Germany in June 1942. At the end of the war, Germany allegedly possessed more than 10 tons of sarin.
Japanese firemen decontaminating the Tokyo subway after sarin attack
However, it is most famous for being used during the 1995 terrorist attack on the Tokio subway by a Japanese cult Aum Shinrikyo, killing 13 people and allegedly injuring more than 5,000. It was also used back in August 2013 by al-Assad’s forces in Ghouta, Syria, killing more than 1,700 people.
Sarin belongs to the group of nerve gasses, the deadliest of all toxic gasses used in chemical warfare. It is highly toxic; a single drop of sarin the size of the head of a pin is enough to kill an adult human. In addition, most of the victims usually die few minutes after contamination.
It usually enters the organism via respiration, but it can also penetrate the skin or be ingested. In home temperature, sarin is a colourless liquid without significant odor, similar to water. However, when exposed to higher temperatures, it starts to evaporate, being still odorless. After release, it often remains deadly for more than 24 hours.
Missile filled with sarin containers
Immediately after exposure, first symptoms include strong headaches, increased salivation and lacrimation(secretion of tears), followed by gradual paralysis of the muscles. Death is caused by asphyxiation or heart failure.
According to some sources, Sarin is 500 times more deadly than kyanide, with its lethal dose being only about 800 micrograms. Only 5 tons of sarin, obiviously properly dosed, would be enough to wipe out entire humanity.
This mixture of two herbicides, most famous for its usage in Vietnam War, is not a chemical weapon in the true sense of the word. It was discovered in year 1943 by American botanic Arthur Galston. In year 1951, further research started by the scientific team in the military base of Detrick, Maryland.
Barrel of ”Agent Orange”
During the War of Vietnam, it was widely used for deforestation of the large areas covered by thick jungle, to enable easier and more effective bombing of enemy bases and supply routes. Although designed as herbicide, the Agent Orange also contained large amounts of dioxin, a highly toxic compound, making it one of the most deadly chemical weapons ever deployed.
In years 1962-1971, military operation with codenames ”Ranch Hand” or ”Trail Dust” took place in Southern Vietnam. During this operation, jungles in the region were heavily showered by this herbicide, primarily in the areas of Mekong delta. Mixture was storaged in orange barrels, hence the name ”Agent Orange”. During the operation, more than 20 million gallons of this dangerous chemical were used, destroying large areas of jungle, contaminating air, water and food sources.
Vietnamese babies born with severe birth defects
In high concentrations, dioxin causes severe inflammation of skin, lungs and mucous tissues, sometimes resulting in chronic obstructive pulmonary disease, pulmonary edema, or even death, however, it also affects eyes, liver and kidneys. It is also highly effective carcinogen, known for causing laryngeal and lung cancer.
It is estimated, that the usage of Agent Orange during the Vietnam War led to more than 400,000 people being killed or maimed, and 500,000 children born with mild to severe birth defects as a result of contamination. Agent Orange alone killed 10 times more people than all other chemical weapons combined.
The Tomahawk missile family consists of a number of subsonic, jet engine-powered missiles designed to attack a variety of surface targets. Although a number of launch platforms have been deployed or envisaged, only sea (both surface ship and submarine) launched variants are currently in service. Tomahawk has a modular design, allowing a wide variety of warhead, guidance, and range capabilities. The Tomahawk project was originally awarded to Applied Physics Laboratory in Laurel, Maryland by the US Navy. James H. Walker led a team of scientists to design and build this new long range missile. The original design, updated with advanced technology, is still used today.
Ground-launched cruise missiles (GLCM) and their truck-like launch vehicles were employed at bases in Europe; they were withdrawn from service to comply with the 1987 Intermediate-Range Nuclear Forces Treaty. Many of the anti-ship versions were converted into TLAMs at the end of the Cold War. The Block III TLAMs that entered service in 1993 can fly farther and use Global Positioning System (GPS) receivers to strike more precisely. Block III TLAM-Cs retain the DSMAC II navigation system, allowing GPS only missions, which allow for rapid mission planning, with some reduced accuracy, DSMAC only missions, which take longer to plan but terminal accuracy is somewhat better, and GPS aided missions which combine both DSMAC II and GPS navigation which provides the greatest accuracy. Block IV TLAMs are completely redesigned with an improved turbofan engine. The F107-402 engine provided the new BLK III with a throttle control, allowing in-flight speed changes. This engine also provided better fuel economy. The Block IV TLAMs have enhanced deep-strike capabilities and are equipped with a real-time targeting system for striking fleeing targets. Additionally, the BLOCK IV missiles have the capabilities to be re-targeted inflight, and the ability to transmit, via satcom, an image immediately prior to impact to assist in determining if the missile was attacking the target and the likely damage from the attack.
UGM-109 Tomahawk missile detonates above a test target, 1986
A major improvement to the Tomahawk is network-centric warfare-capabilities, using data from multiple sensors (aircraft, UAVs, satellites, foot soldiers, tanks, ships) to find its target. It will also be able to send data from its sensors to these platforms. It will be a part of the networked force being implemented by the Pentagon.
Tomahawk Block III introduced in 1993 added time-of-arrival control and navigation through Digital Scene Matching Area Correlator (DSMAC) and jam-resistant GPS, smaller, lighter WDU-36 warhead, engine improvements and extended missile’s range.
Tactical Tomahawk Weapons Control System (TTWCS) takes advantage of a loitering feature in the missile’s flight path and allows commanders to redirect the missile to an alternative target, if required. It can be reprogrammed in-flight to attack predesignated targets with GPS coordinates stored in its memory or to any other GPS coordinates. Also, the missile can send data about its status back to the commander. It entered service with the US Navy in late 2004. The Tactical Tomahawk Weapons Control System (TTWCS) added the capability for limited mission planning on board the firing unit (FRU).
Tomahawk Block IV introduced in 2006 adds the strike controller which can change the missile in flight to one of 15 preprogrammed alternate targets or redirect it to a new target. This targeting flexibility includes the capability to loiter over the battlefield awaiting a more critical target. The missile can also transmit battle damage indication imagery and missile health and status messages via the two-way satellite data link. Firing platforms now have the capability to plan and execute GPS-only missions. Block IV also has an improved anti-jam GPS receiver for enhanced mission performance. Block IV includes Tomahawk Weapons Control System (TTWCS), and Tomahawk Command and Control System (TC2S).
On 16 August 2010, the Navy completed the first live test of the Joint Multi-Effects Warhead System (JMEWS), a new warhead designed to give the Tomahawk the same blast-fragmentation capabilities while introducing enhanced penetration capabilities in a single warhead. In the static test, the warhead detonated and created a hole large enough for the follow-through element to completely penetrate the concrete target. In February 2014, U.S. Central Command sponsored development and testing of the JMEWS, analyzing the ability of the programmable warhead to integrate onto the Block IV Tomahawk, giving the missile bunker buster effects to better penetrate hardened structures.
In 2014, Raytheon began testing Block IV improvements to attack sea and moving land targets. The new passive radar seeker will pick up the electromagnetic radar signature of a target and follow it, and actively send out a signal to bounce off potential targets before impact to discriminate its legitimacy before impact. Mounting the multi-mode sensor on the missile’s nose would remove fuel space, but company officials believe the Navy would be willing to give up space for the sensor’s new technologies. The previous Tomahawk Anti-Ship Missile, retired over a decade earlier, was equipped with inertial guidance and the seeker of the Harpoon missile and there was concern with its ability to clearly discriminate between targets from a long distance, since at the time Navy sensors did not have as much range as the missile itself, which would be more reliable with the new seeker’s passive detection and active millimeter-wave radar. Raytheon estimates adding the new seeker would cost $250,000 per missile. Other upgrades include sea-skim mode – low-altitude flight over water at high subsonic speeds. The first Block IV TLAMs modified with a maritime attack capability will enter service in 2018-2019.
A supersonic version of the Tomahawk is under consideration for development with a ramjet to increase its speed to Mach 3. A limiting factor to this is the dimensions of shipboard launch tubes. Instead of modifying every ship able to carry cruise missiles, the ramjet-powered Tomahawk would still have to fit within a 21-inch diameter and 20-foot long tube.
In October 2015, Raytheon announced the Tomahawk had demonstrated new capabilities in a test launch, using its onboard camera to take a reconnaissance photo and transmit it to fleet headquarters. It then entered a loitering pattern until given new targeting coordinates to strike.
By January 2016, Los Alamos National Laboratory was working on a project to turn unburned fuel left over when a Tomahawk reaches its target into an additional explosive force. To do this, the missile’s JP-10 fuel is turned into a fuel air explosive to combine with oxygen in the air and burn rapidly. The thermobaric explosion of the burning fuel acts, in effect, as an additional warhead and can even be more powerful than the main warhead itself when there is sufficient fuel left in the case of a short range target.
TACTOM(Tactical Tomahawk) is Tomahawk’s modernization program that will incorporate an all-weather-seeker that will complement Tomahawk’s Synthetic Guidance Mode; which uses a high-throughput radio signal to update the missile in flight, giving it new target information as a maritime or land target moves.
For submarine-launched missiles (called UGM-109s), after being ejected by gas pressure (vertically via the VLS) or by water impulse (horizontally via the torpedo tube), the missile exits the water and a solid-fuel booster is ignited for the first few seconds of airborne flight until transition to cruise.
After achieving flight, the missile’s wings are unfolded for lift, the airscoop is exposed and the turbofan engine is employed for cruise flight. Over water, the Tomahawk uses inertial guidance or GPS to follow a preset course; once over land, the missile’s guidance system is aided by terrain contour matching (TERCOM). Terminal guidance is provided by the Digital Scene Matching Area Correlation (DSMAC) system or GPS, producing a claimed circular error probable of about 10 meters.
The Tomahawk Weapon System consists of the missile, Theater Mission Planning Center (TMPC)/Afloat Planning System, and either the Tomahawk Weapon Control System (on surface ships) or Combat Control System (for submarines).
Several versions of control systems have been used, including:
v2 TWCS – Tomahawk Weapon Control System (1983), also known as “green screens,” was based on an old tank computing system.
v3 ATWCS – Advanced Tomahawk Weapon Control System (1994), first Commercial Off the Shelf, uses HP-UX.
v4 TTWCS – Tactical Tomahawk Weapon Control System, (2003).
v5 TTWCS – Next Generation Tactical Tomahawk Weapon Control System. (2006)
The TLAM-D contains 166 sub-munitions in 24 canisters: 22 canisters of seven each, and two canisters of six each to conform to the dimensions of the airframe. The sub-munitions are the same type of Combined Effects Munition bomblet used in large quantities by the U.S. Air Force with the CBU-87 Combined Effects Munition. The sub-munitions canisters are dispensed two at a time, one per side. The missile can perform up to five separate target segments which enables it to attack multiple targets. However, in order to achieve a sufficient density of coverage typically all 24 canisters are dispensed sequentially from back to front.
TERCOM – Terrain Contour Matching. A digital representation of an area of terrain is mapped based on digital terrain elevation data or stereo imagery. This map is then inserted into a TLAM mission which is then loaded onto the missile. When the missile is in flight it compares the stored map data with radar altimeter data collected as the missile overflies the map. Based on comparison results the missile’s inertial navigation system is updated and the missile corrects its course. TERCOM was based on, and was a significant improvement on, “Fingerprint,” a technology developed in 1964 for the SLAM.
On July 26, 2014 it was announced that 196 additional Block IV missiles had been purchased.
DSMAC – Digital Scene Matching Area Correlation. A digitized image of an area is mapped and then inserted into a TLAM mission. During the flight the missile will verify that the images that it has stored correlates with the image it sees below itself. Based on comparison results the missile’s inertial navigation system is updated and the missile corrects its course.
On 17 January 1993, 46 Tomahawks were fired at the Zafraniyah Nuclear Fabrication Facility outside Baghdad, in response to Iraq’s refusal to cooperate with UN disarmament inspectors. One missile crashed into the side of the Al Rasheed Hotel, killing two civilians.
On 17 December 2009, two Tomahawk missiles were fired at targets in Yemen. One of the targets was hit by a TLAM-D missile. The target was described as an ‘alleged Al-Qaeda training camp’ in al-Ma’jalah in al-Mahfad a region of the Abyan governorate of Yemen. Amnesty International reported that 55 people were killed in the attack, including 41 civilians (21 children, 14 women, and six men). The US and Yemen governments refused to confirm or deny involvement, but diplomatic cables released as part of United States diplomatic cables leak later confirmed the missile was fired by a US Navy ship.
On 19 March 2011, 124 Tomahawk missileswere fired by U.S. and British forces (112 US, 12 British) against at least 20 Libyan targets around Tripoli and Misrata. As of 22 March 2011, 159 UGM-109 were fired by US and UK ships against Libyan targets.
On 13 October 2016 five Tomahawk cruise missiles were launched by USS Nitze at three radar sites in Yemen held by Houthi rebels in response to anti-ship missiles fired at US Navy ships the day before.
On 6 April 2017, 59 Tomahawk missiles were launched from the USS Ross (DDG-71) and USS Porter (DDG-78), targeting Shayrat, a military airfield near Homs, in Syria. The strike was in retaliation for the alleged use of chemical weapons by Syrian President Bashir Al-Assad. Initial reports indicate that the Syrian airbase was ‘almost completely destroyed’ after the US strike.
As of 2015, the United States Navy has a stockpile of around 3,500 Tomahawk cruise missiles of all variants, with a combined worth of approximately US $2.6 billion.
In 1995 the US agreed to sell 65 Tomahawks to the UK for torpedo-launch from her nuclear attack submarines. The first missiles were acquired and test-fired in November 1998; all Royal Navy fleet submarines are now Tomahawk capable, including the new Astute-class. The Kosovo War in 1999 saw the Swiftsure-class HMS Splendid become the first British submarine to fire the Tomahawk in combat. It has been reported that seventeen of the twenty Tomahawks fired by the British during that conflict hit their targets accurately; the UK subsequently bought 20 more Block III to replenish stocks. The Royal Navy has since fired Tomahawks during the 2000s Afghanistan War, in Operation Telic as the British contribution to the 2003 Iraq War, and during Operation Ellamy in Libya in 2011.
In April 2004, the UK and US governments reached an agreement for the British to buy 64 of the new generation of Tomahawk missile—the Block IV or TacTom missile. It entered service with the Royal Navy on 27 March 2008, three months ahead of schedule. In July 2014 the US approved the sale to the UK of a further 65 submarine-launched Block IV’s at a cost of US$140m including spares and support; as of 2011 the Block III missiles were on Britain’s books at £1.1m and the Block IV at £0.87m including VAT.
The Sylver Vertical Launching System on the new Type 45 destroyer is claimed by its manufacturers to have the capability to fire the Tomahawk, although the A50 launcher carried by the Type 45 is too short for the weapon (the longer A70 silo would be required). Nevertheless, the Type 45 has been designed with weight and space margin for a strike-length Mk41 or Sylver A70 silo to be retrofitted, allowing Type 45 to use the TLAM Block IV if required. The new Type 26 frigates will have strike-length VLS tubes. SYLVER user France is developing MdCN, a version of the Storm Shadow/Scalp cruise missile that has a shorter range but a higher speed than Tomahawk and can be launched from the SYLVER system.
The Air Force is a former operator of the nuclear-armed version of the Tomahawk, the BGM-109G Gryphon.
The Netherlands (2005) and Spain (2002 and 2005) were interested in acquiring the Tomahawk system, but the orders were later cancelled in 2007 and 2009 respectively.
In 2009 the Congressional Commission on the Strategic Posture of the United States stated that Japan would be concerned if the TLAM-N were retired, but the government of Japan has denied that it had expressed any such view.
It is believed that the SLCM version of the Popeye was developed by Israel after the US Clinton administration refused an Israeli request in 2000 to purchase Tomahawk SLCM’s because of international Missile Technology Control Regime proliferation rules.
As of March 12, 2015 Poland has expressed interest in purchasing long-range Tomahawk missiles for its future submarines.
Story 2: What is Next? United States Led Coalition of Egypt, Jordan, Kurds, Saudi Arabia, and Turkey to Destroy Islamic State, Jabhat Al Nustra Front ( al-Qaeda’s Syrian affiliate), Radical Islamic Terrorist Jihadists in Syria, Hezbollah, and Bashar al-Assad Syrian Regime –Videos — Military strike comes after Trump previously railed against Syria intervention
What comes next after Syria missile attack
Story 3: Supreme Court Justice Neil Gorsuch Confirmed 54 Yes — 45 Nos
Senate confirms Neil Gorsuch for Supreme Court (C-SPAN)
The Senate Goes “Nuclear”
Mike Pence Reads Final Vote Confirming Neil Gorsuch To Supreme Court | NBC News
Senate Democrats trigger “nuclear option” to curb filibusters
Harry Reid goes Nuclear Pushes Major Senate Filibuster Rules Change
Reid, Democrats trigger ‘nuclear’ option; eliminate most filibusters on nominees
It’s more than just a rule change: The so-called “nuclear option” will fundamentally alter the way the Senate operates – for good.(Casey Capachi/(In Play))
Senate Democrats took the dramatic step Thursday of eliminating filibusters for most nominations by presidents, a power play they said was necessary to fix a broken system but one that Republicans said will only rupture it further.
Democrats used a rare parliamentary move to change the rules so that federal judicial nominees and executive-office appointments can advance to confirmation votes by a simple majority of senators, rather than the 60-vote supermajority that has been the standard for nearly four decades.
The immediate rationale for the move was to allow the confirmation of three picks by President Obama to the U.S. Court of Appeals for the District of Columbia Circuit — the most recent examples of what Democrats have long considered unreasonably partisan obstruction by Republicans.
In the long term, the rule change represents a substantial power shift in a chamber that for more than two centuries has prided itself on affording more rights to the minority party than any other legislative body in the world. Now, a president whose party holds the majority in the Senate is virtually assured of having his nominees approved, with far less opportunity for political obstruction.
The main combatants Thursday were the chamber’s two chiefs, Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.), who have clashed for several years over Republican filibusters of Obama’s agenda and nominees.
Reid said the chamber “must evolve” beyond parliamentary roadblocks. “The American people believe the Senate is broken, and I believe the American people are right,” he said, adding: “It’s time to get the Senate working again.”
McConnell linked the rule change to the methods used to approve Obama’s health-care law solely with Democratic votes. The normally reserved GOP leader paced at his desk during his speech, often turning his back to Democrats to address only his fellow Republicans.
“It’s a sad day in the history of the Senate,” McConnell told reporters, calling the move a Democratic “power grab.”
The clash ended with a vote nearly as partisan as the times — 52 to 48, with all but three Democrats backing the move and every Republican opposing it.
The vote was the culmination of more than 25 years of feuding over nominations, beginning with President Ronald Reagan’s choices for the Supreme Court and including Obama’s picks for obscure federal regulatory agencies. Each side in Thursday’s debate cited its own statistics to state its case.
Democrats said the attempted filibusters of Chuck Hagel during his confirmation hearing to become defense secretary, a first for any nominee to lead the Pentagon — as well as a blockade of picks to head the National Labor Relations Board and the Consumer Financial Protection Bureau — exceeded anything Democrats did when they were in the minority. In addition, Democrats charged that Republicans didn’t even have substantive objections to the D.C. Circuit nominees they filibustered.
After the vote, Obama told reporters at the White House that Republicans had turned nomination fights into a “reckless and relentless tool” to grind the gears of government to a halt and noted that “neither party has been blameless for these tactics.” However, he said, “today’s pattern of obstruction . . . just isn’t normal; it’s not what our founders envisioned.”
Republicans countered that they had confirmed 99 percent of Obama’s judicial selections. McConnell accused Democrats of eyeing the D.C. Circuit in an effort to stack the court, which reviews many cases related to federal laws and regulations, to tilt its balance in a liberal direction.
What made the day so historic for senators, former senators and the small collection of parliamentary experts in Washington was the simple majority vote used to execute the changes — a tactic so extreme it is known as the “nuclear option.”
Previous majorities had threatened to upend filibuster rules in this manner, but relying on a simple majority vote had been used only for relatively minor procedural changes to how amendments were handled, never to eliminate the supermajority requirement altogether. Before Thursday, the standard precedent was that major rule changes needed a two-thirds majority. The change was so significant that Reid and his leadership team held a victory party with liberal activists afterward in a room just off the Senate floor.
Republicans said the way Democrats upended the rules will result in fallout for years. “It’s another raw exercise of political power to permit the majority to do anything it wants whenever it wants to do it,” Sen. Lamar Alexander (Tenn.), the GOP’s parliamentary expert, told reporters.
Republicans vowed to reciprocate if they reclaim the majority.
“Democrats won’t be in power in perpetuity,” said Sen. Richard C. Shelby (Ala.), a 27-year member. “This is a mistake — a big one for the long run. Maybe not for the short run. Short-term gains, but I think it changes the Senate tremendously in a bad way.”
After the vote, Reid told reporters that his views on the issue had evolved — from eight years ago, when Republicans held the majority and he led the fight to protect the filibuster. He acknowledged that he wouldn’t mind seeing the supermajority requirement abolished for everything but that there were not enough votes in his caucus to support such a move.
Reid first faced pressure on this issue from junior Democrats four years ago, particularly Sen. Jeff Merkley, a former speaker of the Oregon state House, who became the point person for growing the anti-filibuster movement. But Reid repeatedly rejected their effort as too radical.
Even if Republicans want to do away with the filibuster someday, Reid said, Thursday’s move was worth it because the current climate had become too hostile to get anything significant done. Reid said he faced a choice: “Continue like we are or have democracy?”
The rule change does not apply to Supreme Court nominations or to legislation.
Individual senators will still be able to seize the floor for marathon speeches opposing nominees, as Sen. Rand Paul (R-Ky.) did in a nearly 13-hour session in March against the nomination of John Brennan as CIA director. But once such speeches end, the majority will be able to confirm nominees without needing bipartisan support.
With the Senate majority very much up for grabs in midterm elections next year, Democrats placed a big bet on maintaining control of the chamber. GOP leaders have suggested that, if given the Senate majority back, they might further strip filibuster rules so they could dismantle Obama’s landmark domestic achievement, the Affordable Care Act, on a simple majority vote.
In his remarks, McConnell finally turned to Democrats and said that a majority of them had never served in the minority and then lectured the longtime members who knew what it was like to be on the other side.
“The solution to this problem is at the ballot box,” he said. “We look forward to having a great election in 2014.”
President Trump Launches 59 Cruise Missile Attack From Two U.S. Destroyers Against Syrian Air Base
President Trump Neoconned!
Trump Orders ATTACK on Syria – April 6, 2017 – FULL Press Conference
RAW USA launches cruise missile strike on Syria Regime Breaking News April 6 2017
RAW USA launches cruise missiles strike on Syria RUSSIA IRAN backed ASSAD Regime after chemical Warfare weapons attack Breaking News April 6 2017
Neo-CONNED speech by Ron Paul
U.S. Launches Missiles at Syrian Base After Chemical Weapons Attack
byCOURTNEY KUBE, ALEX JOHNSONandHALLIE JACKSON
The United States launched dozens of cruise missiles Thursday night at a Syrian airfield in response to what it believes was Syria’s use of banned chemical weapons that killed at least 100 people, U.S. military officials told NBC News.
Two U.S. warships in the Mediterranean Sea fired 59 Tomahawk missiles intended for a single target — Ash Sha’irat in Homs province in western Syria, the officials said. That’s the airfield from which the United States believes the government of Syrian President Bashar al-Assad fired the banned weapons.
There was no immediate word on casualties. U.S. officials told NBC News that people were not targeted and that aircraft and infrastructure at the site were hit, including the runway and gas fuel pumps.y
Trump Speaks on Missile Strike in Syria 2:48
“Assad choked out the lives of helpless men, women and children,” President Donald Trump said in remarks from Mar-a-Lago, his family compound in Palm Beach, Florida.
“It is in this vital national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons,” said Trump, who called on other countries to end the bloodshed in Syria.
Trump is in Florida for a meeting with Chinese President Xi Jinpeng. Defense Secretary James Mattis, Secretary of State Rex Tillerson and national security adviser H.R. McMaster traveled to Florida with him.
Defense Secretary James Mattis, Secretary of State Rex Tillerson and national security adviser H.R. McMaster traveled to Florida with Trump. In Washington, Vice President Mike Pence returned to the White House after having gone home for dinner Thursday evening.
Syrian television characterized the missile strike “as American aggression” Friday morning. But Ahrar Al Sham, the largest Syrian armed rebel group, told NBC News it “welcomes any U.S. intervention through surgical strikes that would deter the Assad regime capabilities to kill civilians and shorten the suffering of our people.”
Syria Crisis: Trump Given Military Options After Chemical Attack 2:25
Tillerson told reporters on Thursday that “there is no doubt in our minds” that the Syrian regime was responsible for the attack. And in a combative speech at the U.N. Security Council on Wednesday, Haley warned: “When the United Nations consistently fails in its duty to act collectively, there are times in the life of states that we are compelled to take our own action.”y
Tillerson on Assad Regime: He Has ‘No Role’ to Govern Syria0:58
There was no immediate reaction from Russia, which Tillerson and Haley have accused of turning a blind eye to Syria’s transgressions.
“Russia cannot escape responsibility for this,” Haley said at the United Nations. “They chose to close their eyes to the barbarity. They defied the conscience of the world.”
Thursday, Tillerson urged Russia to “consider carefully their continued support of the Assad regime.”
Story 1: Progressive Global Interventionists Elite Banging The War Drums For American Empire Warfare and Welfare State vs. We The People America First Non-interventionists For American Republic Peace and Prosperity Economy — American People Not Readily Accepting Big Lie Media Propaganda on Syria Chemical Gas Air Attack — Another False Flag — Sunni and Shia Have Being Killing Each Other For Hundreds of Years — Stop Being Imperial Umpire For A Religious Sectarian Civil War — National Interest — Oil and Gas — Videos
President Trump may be considering military action in Syria
Gen. Keane on the possibility of US military action in Syria
Trump Orders Attack On Syria! Will Russia Respond? Is Trump Wrong?
Syria Gas Attack: Assad’s Doing…Or False Flag?
Streamed live on Apr 5, 2017
Just days after the US Administration changed course on Syrian President Assad, saying he could stay, an alleged chemical weapon attack that killed dozens of civilians has been blamed on the Syrian government. Did Assad sign his own death warrant with such an attack…or does some other entity benefit?
On Tuesday in Idlib, a province in the Northwest of Syria, at least seventy people were killed, 20 of them children, in what appears to have been a chemical weapon attack in the rebel-held town of Khan Sheikhoun. Initial reports point to the nerve agent Sarin gas. Our panel of experts asks who was behind this attack. What explanations are being given, and do they stack up?
Click here for PART TWO.
Another suspected chemical weapons attack is latest chapter in brutal Syrian conflict
‘Assad Has Unleashed Horror in Syria’: World Reacts to Alleged Chemical Attack
Syria Gas Attack: Russia says chemical depot held by rebels bombed
Turkish President Erdogan calls chemical attack in Syria “inhuman and unacceptable”
“The Desperate BBC Propaganda Machine Blames Assad For Chemical Attack Before Any Investigation.”
Russia denies involvement in reported Syrian chemical attack
Children caught in Syria ‘chemical attack’- BBC News
Published on Apr 5, 2017
The UN Security Council has held an emergency session to discuss the suspected gas attack on a rebel-held town in Syria. The attack is believed to have killed more than 70 people, including children. The Syrian government has denied responsibility, while its ally Russia says the gas came from rebel weapons on the ground. But those claims have been widely rejected by western governments, as our Chief International Correspondent Lyse Doucet reports.
Syria conflict: ‘Chemical attack’ in Idlib kills 58 – BBC News
Published on Apr 4, 2017
At least 58 people have been killed and dozens wounded in a suspected chemical attack on a rebel-held town in north-western Syria, a monitoring group says. The Syrian Observatory for Human Rights reported that strikes on Khan Sheikhoun by Syrian government or Russian jets had caused many people to choke. Later, aircraft fired rockets at local clinics treating some of the survivors, medics and opposition activists said. The Syrian government has repeatedly denied using chemical weapons.
UN Ambassador Nikki Haley Condemns Russia, Iran After Chemical Attack In Syria | NBC News
UK: Chemical Attack Bears All Hallmarks of Assad
UNSC holds emergency meeting on Syria chemical attack
WATCH LIVE: U.N. Security Council Holds Emergency Meeting On Syria Chemical Attack | TIME
The TRUTH About the Syria Gas Attack
Hillary in Rat Line for Syria False Flag Sarin Gas Attack says Pulitzer Prize Winning Journalist
Sy Hersh Reveals Potential Turkish Role in Syria Chemical Strike That Almost Sparked U.S. Bombing
Global Empire – The World According to Seymour Hersh [Part Two]
Published on Aug 10, 2016
Tariq Ali talks to investigative journalist, Seymour Hersh, about his revelations concerning the chemical attack at Ghouta, Syria in August 2013.
Seymour Hersh Exposes Erdogan’s Chemical Adventure in Syria
Published on Apr 8, 2014
The US author reveals secret US reports warning that Al-Nusrah terrorist group affiliated with Qatar and Turkey, posses a chemical weapons cell. Worst threat since 9/11.
Global Empire – The World According to Seymour Hersh [Part One]
Published on Aug 10, 2016
Tariq Ali talks to investigative journalist, Seymour Hersh, about the assassination of Osama bin Laden in Pakistan in 2011 and describes what the Americans and Pakistanis knew about his whereabouts.
Global Empire – Syria After Trump
Seymour Hersh: Obama “Cherry-Picked” Intelligence on Syrian Chemical Attack to Justify U.S. Strike
Published on Dec 9, 2013
Writing in the London Review of Books, Hersh argues that the Obama administration “cherry-picked intelligence to justify a strike against Assad.” The administration failed to disclose it knew Syrian rebels in the al-Nusra Front had the ability to produce chemical weapons. Evidence obtained in the days after the attack was also allegedly distorted to make it appear it was gathered in real time.
Whose sarin? Seymour M. Hersh
Barack Obama did not tell the whole story this autumn when he tried to make the case that Bashar al-Assad was responsible for the chemical weapons attack near Damascus on 21 August. In some instances, he omitted important intelligence, and in others he presented assumptions as facts. Most significant, he failed to acknowledge something known to the US intelligence community: that the Syrian army is not the only party in the country’s civil war with access to sarin, the nerve agent that a UN study concluded — without assessing responsibility — had been used in the rocket attack. In the months before the attack, the American intelligence agencies produced a series of highly classified reports, culminating in a formal Operations Order — a planning document that precedes a ground invasion — citing evidence that the al-Nusra Front, a jihadi group affiliated with al-Qaida, had mastered the mechanics of creating sarin and was capable of manufacturing it in quantity. When the attack occurred al-Nusra should have been a suspect, but the administration cherry-picked intelligence to justify a strike against Assad.
In his nationally televised speech about Syria on 10 September, Obama laid the blame for the nerve gas attack on the rebel-held suburb of Eastern Ghouta firmly on Assad’s government, and made it clear he was prepared to back up his earlier public warnings that any use of chemical weapons would cross a ‘red line’: ‘Assad’s government gassed to death over a thousand people,’ he said. ‘We know the Assad regime was responsible … And that is why, after careful deliberation, I determined that it is in the national security interests of the United States to respond to the Assad regime’s use of chemical weapons through a targeted military strike.’ Obama was going to war to back up a public threat, but he was doing so without knowing for sure who did what in the early morning of 21 August.
He cited a list of what appeared to be hard-won evidence of Assad’s culpability: ‘In the days leading up to August 21st, we know that Assad’s chemical weapons personnel prepared for an attack near an area where they mix sarin gas. They distributed gas masks to their troops. Then they fired rockets from a regime-controlled area into 11 neighbourhoods that the regime has been trying to wipe clear of opposition forces.’ Obama’s certainty was echoed at the time by Denis McDonough, his chief of staff, who told the New York Times: ‘No one with whom I’ve spoken doubts the intelligence’ directly linking Assad and his regime to the sarin attacks.
But in recent interviews with intelligence and military officers and consultants past and present, I found intense concern, and on occasion anger, over what was repeatedly seen as the deliberate manipulation of intelligence. One high-level intelligence officer, in an email to a colleague, called the administration’s assurances of Assad’s responsibility a ‘ruse’. The attack ‘was not the result of the current regime’, he wrote. A former senior intelligence official told me that the Obama administration had altered the available information — in terms of its timing and sequence — to enable the president and his advisers to make intelligence retrieved days after the attack look as if it had been picked up and analyzed in real time, as the attack was happening. The distortion, he said, reminded him of the 1964 Gulf of Tonkin incident, when the Johnson administration reversed the sequence of National Security Agency intercepts to justify one of the early bombings of North Vietnam. The same official said there was immense frustration inside the military and intelligence bureaucracy: ‘The guys are throwing their hands in the air and saying, “How can we help this guy” — Obama — “when he and his cronies in the White House make up the intelligence as they go along?”‘…()
Obama Was Lying!
President Obama’s Syria Address [FULL SPEECH]
Seymour Hersh’s Latest Bombshell: U.S. Military Undermined Obama on Syria with Tacit Help to Assad
Published on Dec 22, 2015
A new report by the Pulitzer-winning veteran journalist Seymour Hersh says the Joints Chiefs of Staff has indirectly supported Bashar al-Assad in an effort to help him defeat jihadist groups. Hersh reports the Joint Chiefs sent intelligence via Russia, Germany and Israel on the understanding it would be transmitted to help Assad push back Jabhat al-Nusra and the Islamic State. Hersh also claims the military even undermined a U.S. effort to arm Syrian rebels in a bid to prove it was serious about helping Assad fight their common enemies. Hersh says the Joints Chiefs’ maneuvering was rooted in several concerns, including the U.S. arming of unvetted Syrian rebels with jihadist ties, a belief the administration was overly focused on confronting Assad’s ally in Moscow, and anger the White House was unwilling to challenge Turkey and Saudi Arabia over their support of extremist groups in Syria. Hersh joins us to detail his claims and respond to his critics.
US, Russia Announce Syria Chemical Weapons Deal
U.S. Ship Begins Neutralizing Syrian Chemical Weapons
MV Cape Ray Storage Area Tour
MV Cape Ray Disposal Practice
MV Cape Ray FDHS
Published on Jul 2, 2014
As part of the U.N. Organization for the Prohibition of Chemical Weapons (OPCW) Joint Mission to eliminate chemical materials from the Syrian Arab Republic, the U.S. will destroy approximately 700 metric tons of chemicals aboard the MV Cape Ray. Danish and Norwegian vessels will transport the chemicals to a yet-unnamed Italian port for transfer to the MV Cape Ray. The MV Cape Ray, part of the U.S. Maritime Administration’s Ready Reserve Fleet, has been retrofitted with two field-deployable hydrolysis systems designed to neutralize the dangerous chemicals before disposal at a commercial facility.
MV Cape Ray’s Bridge
MV Cape Ray Command Post Tour
MV Cape Ray Laboratory Tour
From Wikipedia, the free encyclopedia
“False colors” redirects here. For the imaging technique, see False-color.
The contemporary term false flag describes covert operations that are designed to deceive in such a way that activities appear as though they are being carried out by entities, groups, or nations other than those who actually planned and executed them.
Historically, the term “false flag” has its origins in naval warfare where the use of a flag other than the belligerent’s true battle flag before (but not while) engaging the enemy has long been accepted as a permissible ruse de guerre; by contrast, flying a false flag while engaging the enemy constitutes perfidy.
Operations carried out during peace-time by civilian organizations, as well as covert government agencies, can (by extension) also be called false flag operations if they seek to hide the real organization behind an operation.
Use in warfare
In land warfare such operations are generally deemed acceptable in certain circumstances, such as to deceive enemies providing that the deception is not perfidious and all such deceptions are discarded before opening fire upon the enemy. Similarly in naval warfare such a deception is considered permissible provided the false flag is lowered and the true flag raised before engaging in battle:auxiliary cruisers operated in such a fashion in both World Wars, as did Q-ships, while merchant vessels were encouraged to use false flags for protection.
Such masquerades promoted confusion not just of the enemy but of historical accounts: in 1914 the Battle of Trindade was fought between the British auxiliary cruiser RMS Carmania and the German auxiliary cruiser SMS Cap Trafalgar which had been altered to look like Carmania. (Contrary to some possibly mendacious accounts, the RMS Carmania had not been altered to resemble the Cap Trafalgar.)
Another notable example was the World War II German commerce raider Kormoran which surprised and sank the Australian light cruiser HMAS Sydney in 1941 while disguised as a Dutch merchant ship, causing the greatest recorded loss of life on an Australian warship. While Kormoran was fatally damaged in the engagement and its crew captured the outcome represented a considerable psychological victory for the Germans.
By this ruse the British were able to get within two miles (3 km) of the harbour before the defences responded, where the explosive-rigged Campbeltown and commandos successfully disabled or destroyed the key dock structures of the port.
In December 1922–February 1923, Rules concerning the Control of Wireless Telegraphy in Time of War and Air Warfare, drafted by a commission of jurists at the Hague regulates:
Art. 3. A military aircraft must carry an exterior mark indicating its nationality and its military character.
Art. 19. The use of false exterior marks is forbidden.
This draft was never adopted as a legally binding treaty, but the ICRC states in its introduction on the draft that ‘To a great extent, [the draft rules] correspond to the customary rules and general principles underlying treaties on the law of war on land and at sea’, and as such these two non–controversial articles were already part of customary law.
In land warfare, the use of a false flag is similar to that of naval warfare: the trial of Otto Skorzeny, who planned and commanded Operation Greif, by a U.S. military tribunal at the Dachau Trials included a finding that Skorzeny was not guilty of a crime by ordering his men into action in American uniforms. He had relayed to his men the warning of German legal experts: that if they fought in American uniforms, they would be breaking the laws of war; however, they probably were not doing so simply by wearing the American uniforms. During the trial, a number of arguments were advanced to substantiate this position and the German and U.S. military seem to have been in agreement.
In the transcript of the trial, it is mentioned that Paragraph 43 of the Field Manual published by the War Department, United States Army, on 1 October 1940, under the entry Rules of Land Warfare states “National flags, insignias and uniforms as a ruse – in practice it has been authorized to make use of these as a ruse. The foregoing rule (Article 23 of the Annex of the IVth Hague Convention), does not prohibit such use, but does prohibit their improper use. It is certainly forbidden to make use of them during a combat. Before opening fire upon the enemy, they must be discarded’.”
The American Soldiers’ Handbook was also quoted by Defense Counsel: “The use of the enemy flag, insignia, and uniform is permitted under some circumstances. They are not to be used during actual fighting, and if used in order to approach the enemy without drawing fire, should be thrown away or removed as soon as fighting begins.” Subsequently, the outcome of the trial has been codified in the 1977 Protocol Additional to the Geneva Conventions of 12 August 1949 (Protocol I):
1. It is prohibited to kill, injure, or capture an adversary by resort to perfidy. Acts inviting the confidence of an adversary to lead him to believe that he is entitled to, or is obliged to accord, protection under the rules of international law applicable in armed conflict, with intent to betray that confidence, shall constitute perfidy. The following acts are examples of perfidy:
(a) The feigning of an intent to negotiate under a flag of truce or of a surrender;
(b) The feigning of an incapacitation by wounds or sickness;
(c) The feigning of civilian, non-combatant status; and
(d) The feigning of protected status by the use of signs, emblems or uniforms of the United Nations or of neutral or other States not Parties to the conflict.
2. Ruses of war are not prohibited. Such ruses are acts which are intended to mislead an adversary or to induce him to act recklessly but which infringe no rule of international law applicable in armed conflict and which are not perfidious because they do not invite the confidence of an adversary with respect to protection under that law. The following are examples of such ruses: the use of camouflage, decoys, mock operations and disinformation.
Article 38. – Recognized emblems
1. It is prohibited to make improper use of the distinctive emblem of the Red Cross, Red Crescent or Red Lion and Sun or of other emblems, signs or signals provided for by the Conventions or by this Protocol. It is also prohibited to misuse deliberately in an armed conflict other internationally recognized protective emblems, signs or signals, including the flag of truce, and the protective emblem of cultural property.
2. It is prohibited to make use of the distinctive emblem of the United Nations, except as authorized by that Organization.
Article 39. – Emblems of nationality
1. It is prohibited to make use in an armed conflict of the flags or military emblems, insignia or uniforms of neutral or other States not Parties to the conflict.
2. It is prohibited to make use of the flags or military emblems, insignia or uniforms of adverse Parties while engaging in attacks or in order to shield, favour, protect or impede military operations.
3. Nothing in this Article or in Article 37, paragraph 1 ( d ), shall affect the existing generally recognized rules of international law applicable to espionage or to the use of flags in the conduct of armed conflict at sea.
A false flag in the cyber domain is slightly different and easier to perpetrate than in other physical theaters of war. Cyber false flags refer to tactics used in covert cyber attacks by a perpetrator to deceive or misguide attribution attempts including the attacker’s origin, identity, movement, and/or code/exploitation. This misdirection tactic can cause misattribution (permitting response and/or counterattack as a condiciosine qua non under international law) or misperception which can lead to retaliation against the wrong adversary.
Cyber false flags can exist in the cyber domain when:
Weaponized cyber exploits use recycled code/variants from previous attacks;
Exploits are developed to mimic the scope and complexity of other malware;
Exploits are procured rather than developed;
Exploits are executed from new/unknown operator command servers;
Malware calls out to or connects to known operator command servers;
The action or attack is outsourced;
The compromise is socially engineered to misguide investigations towards other operators;
The audit trail or lack thereof conceals actual intent or actions with other exploits designed to mislead investigators.
As pretexts for war
In 1788, the head tailor at the Royal Swedish Opera received an order to sew a number of Russian military uniforms. These were then used by the Swedes to stage an attack on Puumala, a Swedish outpost on the Russo-Swedish border, on 27 June 1788. This caused an outrage in Stockholm and impressed the Riksdag of the Estates, the Swedish national assembly, who until then had refused to agree to an offensive war against Russia. The Puumala incident allowed King Gustav III of Sweden, who lacked the constitutional authority to initiate unprovoked hostilities without the Estates’ consent, to launch the Russo-Swedish War (1788–1790).
In September 1931, Japanese officers fabricated a pretext for invading Manchuria by blowing up a section of railway. Though the explosion was too weak to disrupt operations on the rail line, the Japanese nevertheless used this Mukden incident to seize Manchuria and create a puppet government for what they termed the “independent” state of Manchukuo.