I'm not really sure what I'm looking at. a cat (looks kinda like a pig though) holding a really long tattered flag? and he's got a big belt buckle or crotchless pants or something? It takes really careful cluster management to make something this small readable, I'd consider doubling the size of the character.
Does the background serve any purpose? If not, you'd better remove it :)
Don't take thee the wrong way it's okay, but you should really work on contrast and better design...