There is a debate when it comes to the future of the Tea Party movement. There are arguments raging over whether the Tea Party matters, will matter in the future, or be a mere footnote in US history. It is our tendency to get caught up in the moments of time. Right now, it seems like the Tea Party movement could be a major player in the policy debate for years to come. For that to happen, several issues will need to be addressed.

What, exactly, is the Tea Party? It started as a simple protest movement when an angry reporter said that the American people should be disgusted over the corporate bailouts and they should fight back with a Tea Party movement. In no time, that became a reality. Its membership, however, is very interesting and raises many questions about unity. Forty percent of those who call themselves Tea Party “members” are also self described Democrats and independents. A loud, if not significant, minority are of the libertarian variety. There are also those who describe themselves as “Truthers” (believe the US was behind September 11th), which seems to be largely ignored by the vast majority in the movement. The single largest group ranges from traditional conservatives to those who call themselves “Constitutionalists.” It is difficult to call this a “united movement.” However, there could be enough “critical mass” to make a difference.

Are the members of the Tea Party too worried about “being used” to be useful in the cause of liberty? There is no doubt that the members of the Tea Parties have every right to be offended over the abuses in government that exist today. However, most of these abuses accumulated while the “giant,” now called the Tea Party, slept. Yes, shame on government for going on autopilot, but shame on the American people for not keeping them in line. Virtually everyone in the Democratic Party has open disdain for the Constitution and most of Republicans are filled with hypocrisy. That leaves few options for a group of Americans that have felt disenfranchised. A mere “throw the bums out” strategy is filled with problems and America cannot afford to wait for a viable third party. It will be a truly wasted opportunity if this movement fails to accomplish anything of lasting value.

I think it is imperative for those who are interested in having an immediate impact on the political process, but do not want to be taken advantage of by the political parties, to take a strategic approach when it comes to their activities. Conservatives should aggressively support the best (AKA constitutionally sound) candidates in primaries. They should go door to door, make phone calls, and give money to these type of candidates. If they do not exist in your district, work in a nearby district that has a candidate that shares your values. You can also help these candidates outside of your district, if the candidate you supported does not get the party’s nod. Don’t waste time, energy, and resources on candidates who do not share your values…that is, America’s value. If such principles are applied consistently, you will naturally have better candidates over time. I would argue, in a very short time.

So what happens when you get to November and your choices are various degrees of “bad?” My view is one that is both pragmatic, but lends to the wisdom of the Founding Fathers. The United States is one of the only governments in the world that can have a head of government that is different from the legislative branch of government. For example, the Prime Minister of England is a mere member of Parliament, whose party enjoys a majority. Our Founders did not believe that a government that could create policy with ease was necessarily a good government. In our current state and with a President pushing this nation towards a socialist wasteland, I can comfortably vote for obstruction. To vote for a Republican — any Republican — for Congress in the general election is a vote against Nancy Pelosi or Harry Reid as leaders (depending on the House). At this point, it is unconscionable to vote for a third party or to not vote at all in the current political environment. With the fast track towards socialism we are moving on today, I can comfortably support obstruction all day long.

Recently I was a speaker at the Young Conservatives of Texas annual convention in Austin, Texas and, as I waited for my opportunity to present, I had the opportunity to hear Dr. Rich Brake of the Intercollegiate Studies Institute (ISI) discuss the status of America’s civic education. Brake eloquently reminded the audience that our country has a republican form of government. That means that we must have a population that understands individual responsibility and is capable of making sure the government stays within the limits so clearly stated in the Constitution. We are not a nation that is ruled by the mob, but by the law. The people must hold those who govern accountable to that law. So how are the American people doing?

ISI, through its American Civil Literacy Program, produced a report entitled “Failing our Students, Failing America.” It’s purpose is to hold “colleges accountable for teaching America’s history and institutions.” The survey was of “some 14,000 freshmen and seniors at 50 colleges and universities. Students were asked 60 multiple-choice questions to measure their knowledge in four subject areas: America’s history, government, international relations, and market economy.” The finding of the report are very disturbing, including:

• College seniors failed a basic test on America’s history and institutions. According to the report, these students made an “F” on all four basic areas, with a score of 54.2 percent. Harvard seniors did best, but their score was only 69.6, which was a mere “D+.”
• Colleges actually slow down, and even stall, student learning about America. The report found that from K-12, the “average student gains 2.3 points per year in civic knowledge, almost twice the annual gain of the average college student.” Worse still, some students actually lose civic knowledge as they go through school.
• Ironically (considering the costs and other factors), America’s most prestigious schools were the worse performers. In fact, colleges that perform well in popular rankings (such at US News & World Report) are actually quite poor at advancing civic knowledge. Seniors from four of the top 12 schools in US News had weaker scores on the test as they left school, compared to when they entered.
• Not surprisingly, the study indicated that inadequate college curriculum contributes to failure. Obviously the number of civic oriented courses (and their quality) a student takes will have a bearing on how well they would perform on such a test. The average senior only takes four such courses while in college.
• Finally the more people learn about government, the more active they will likely be as citizens. Simply put, those who know more are going to be more likely to vote and be involved in other civic activities.

The average score of these students was 53.2% and the simplicity of the questions these test takers failed on, is disturbing. For example the takers of this multiple choice test could not provide a simple chronology of the most important events in US history (what came first, the Constitution or the Cuban Missile Crisis?), the purpose of Martin Luther King, Jr’s “I Have a Dream” speech, and they could not define the free enterprise system.

Parents are spending thousands of dollars helping their children to make a living and to make a life. They clearly deserve a refund from their colleges when it comes to the type of education these students are receiving to prepare for the responsibilities of protecting that quality of life.

“Soak the rich” is a favorite battle cry for politicians seeking reelection and advocates of social justice, but in the end, it creates injustice for all. This will clearly be seen as a consequence of the recent health care bill, as well as with the President’s ambitious efforts to dramatically increase the tax on capital gains.

Numerous major corporations have announced projected loses in the hundreds of millions of dollars due to Obamacare. These tax hikes will have an adverse effect on the capital stock and will undermine job creation among small businesses. You would think the Obama administration, which is presiding over the worse unemployment this nation has seen in over a generation, would do everything in its power to keep unemployment down. To look at the obvious consequences of Obamacare, however, one would think that increased job losses is a policy objective. But the damage does not end with the President’s ambitious health care agenda, but is also seen in his desire to change the taxes on capital gains.

Pamela Villarreal, a senior policy analyst with the National Center for Policy Analysis, notes that:

• The 2001 Bush tax cuts reduced the lowest marginal income tax rate from 15 percent to 10 percent and the highest from 39.6 percent to 35 percent. This tax situation led to a job creation environment that was one of the best in recent history and brought the US unemployment down to around 5 percent. Simply put, the cost of using an asset got smaller and the profit got higher. This led to business activity taking place that resulted in more jobs and more tax revenue (because revenue comes from business activities that take place, like the selling of assets).
• President Obama proposes to raise the two top marginal rates to 36 and 39.6 percent beginning in 2011 for the highest-income earners while leaving the other tax brackets unchanged. This will be temporary, however and will be followed with additional changes in the brackets and the amount taxed.
• Starting in 2013, Obamacare will impose an additional 0.9 percent Medicare tax on wage income for individuals earning more than $200,000 a year and couples earning more than $250,000.
• To make matters worse, the new law imposes a 3.8 percent Medicare tax on unearned income, such as “rent, royalties, dividends and capital gains for the same high-income earners.”
• The Obama administration also wants to increase long-term capital gains tax rates from 15 percent this year to 20 percent in 2011 for the two highest tax brackets, and taxing dividends at ordinary income tax rates for those earning $200,000 a year or more.

So what kind of impact will this have on the most affluent? Villarreal suggests we should “suppose an individual owns $50,000 worth of stock that has accumulated an 8 percent capital gain and 3 percent dividend after one year:”

• • By 2013, the tax on the $4,000 gain (just after one year) would be as much as $1,309, compared to $825 if we simply left taxes at the current rate.
  • With the current tax rate on capital gains (15 percent), the tax on the sale of $50,000 in stock would be $825, and the after-tax rate of return would be 9.35 percent.
  • If President Obama’s proposed capital gains and dividends increases of 20 percent go into effect, along with the excessive new taxes that will come with Medicare, the tax bill rises to $1,352 and the after-tax rate of return falls to 8.38 percent (a drop of almost 1 percent).
  • For ordinary dividends, a higher marginal tax rate and the new Medicare taxes could nearly double the individual’s effective tax rate from 15 percent to more than 29 percent, essentially doubling the tax burden.

The US already has the unwelcome distinction of having one of the highest tax rates of any industrialized country in the world. After Obama’s pro-tax, anti-prosperity, agenda, we will likely be the world’s number one tax collector among modern countries. For those who are more affluent, this will result in an after tax rate of return on this type of investment that would have the return on the profit be reduced by approximately 10 percent. The ironic result of such is that increasing the capital gains tax could actually lower government tax revenues (as witnessed in the past), because people will hold on to assets in order to avoid the tax. Remember, unlike the vast majority of people who sell things because they need to move, or they need a different vehicle, or there is some other cost driving necessity, the rich simply sit on the asset and wait until the tax environment changes. They can afford to do that and it is in their self interest. For much of the country, however, it leads to the depletion of jobs and even the hope of jobs.

Instead of increasing taxes on wealth creation (e.g., capital gains, taxes on businesses, etc.), this administration should consider dramatically reducing such barriers between people and jobs.