The Instigator
1Historygenius
Con (against)
Winning
6 Points
The Contender
lord_megatron
Pro (for)
Losing
0 Points

100th Debate: Taxes Should be Raised on the Rich

Do you like this debate?NoYes+2
Add this debate to Google Add this debate to Delicious Add this debate to FaceBook Add this debate to Digg  
Post Voting Period
The voting period for this debate has ended.
after 2 votes the winner is...
1Historygenius
Voting Style: Open with Elo Restrictions Point System: 7 Point
Started: 4/4/2015 Category: Economics
Updated: 2 years ago Status: Post Voting Period
Viewed: 1,287 times Debate No: 72911
Debate Rounds (4)
Comments (9)
Votes (2)

 

1Historygenius

Con

Hello friends! I'm doing my 100th debate here on DDO. For this debate, I decided to pick my favorite topic of tax policy. I will argue against taxes being raised on the rich and I will instead argue that taxes should be maintained or lowered for economic and government revenue benefits. My opponent must argue that raising taxes on the rich. The rich are those paying, as many would agree, the current top income tax rate and current capital gains tax rate.

Round 1 is for acceptance only.

Round 2 arguments will be presented.

Round 3 is refutations.

Round 4 is defense of case and conclusion.

No trolling and semantics, obviously. To forfeit a round equals automatic concession of the debate.
lord_megatron

Pro

This is my 5th incomplete debate. I don't know much about economics, so bear with me. I think taxes should be raised for rich and lowered for the poor, for it seems fair to me. I don't know what refutations are so please enlighten me. And semantics too. And please don't give too long arguments, I take time to read, and furthermore to understand.
Debate Round No. 1
1Historygenius

Con

I thank my opponent for having an interest in this debate as I have. What I want to explain is that round 1 is specifically for presenting your arguments. Round 2, the refutation is period, is to attack and disprove my argument as I will do to yours. The third is a defense of your own case, any final refutations you would wish to make, and a conclusion as to why you won the debate (usually just a paragraph or a few detailed sentences). Semantics are used by some debaters to distort words in a way to win and make the debate not what it was supposed to be, but I do not think I will have that problem with you since you don't know what it is, so just ignore that word. Anyway, let's begin.

My Case

I. Laffer Curve

One of the most important things to understanding why taxes should not be raised on the rich is the Laffer curve, created and promoted by economist Arthur B. Laffer. The Laffer curve is quite simple to understand. If you have no taxes, then no money comes in to the government. Likewise, 100% tax rates don't make sense either since no one would work if they are not getting any benefit out of their work. This means that higher taxes makes people work less since there is no incentive to work more. In other words, as the tax rate gets lower from 100%, more people come back to work since they can get something out of it. Ideally, a low rate is wanted so people can work as much as they wish while giving the government more money as a result of a higher incentive to work through less taxes. Here's a nice graph:

Laffer curve

It is a fact that taxes hurt the economy since money is taken away that can be used in the private sector to expand. When people have less money, they will spend or save less, depending on what they intended to do with that money that is now given to the government. Even Christina Romer, who served as an economic adviser to President Obama, knows this. She and her husband worked on a study that was published in 2010:

"The Romers’ baseline estimate suggests that a tax increase of 1% of GDP (about $160 billion in today’s economy) reduces real GDP by 3% over the next 10 quarters.

In addition, the Romers used a variety of statistical tests to take into account other factors that could influence economic growth at the time of the tax changes, including government spending, monetary policy, the relative price of oil, and even whether the President was a Democrat or Republican (it doesn’t matter much). A summary of the statistical work estimates that a tax increase of 1% of GDP would lead to a fall in output of 2.2% to 3.6% over the next 10 quarters." [1]

The Laffer curve is very important to understanding the economy and I do have more studies to back it up. Ideally, lower tax rates spring economic growth and with that expansion of capital more money is given to the government.

II. History

Have the policies that I am promoting, supply-side economic policies, worked in practice? The answer is yes. There were three specific times in which policies were largely supply-side and they worked perfectly.

a. Harding/Coolidge Tax Cuts

An economic depression hit the United States in 1920 as a result of a wartime to peacetime transition following World War I, increased agressiveness among labor unions, and a high top income tax rate of 73 percent under the Democrat Woodrow Wilson. Republicans won the 1920 election by a landslide with candidate Warren G. Harding. What did Harding do? He enacted largely supply-side policies. The top income tax rate was reduced to 58 percent by 1923. After his death that year, his sucessor Calvin Coolidge signed more tax reductions that brought the top rate down to 25 percent. As we can see from the unemployment rate using a graph I made, we know why the Harding/Coolidge era became known as the Roaring Twenties:
The annual unemployment rate during the Harding/Coolidge era when taxes were cut from 73% to 24%.

What about the always important real growth in gross domestic product (GDP)? During Wilson's presidency, which created the income tax, from 1913 to 1921, real GDP growth was just 1.43 percent, but during the Harding/Coolidge era it was 4.80 percent. Clearly, we understand why the Roaring Twenties was the Roaring Twenties. [2]

And the wealth did trickle down, as can be noted from the ownership of new goods during the period:
Ownership of goods during the 1920s.
b. JFK's Tax Cut

After temporary economic growth from World War II, the economy went back into a slow mode even with the world adjusting back to normal. To prove this, go to the real GDP numbers which find that growth during Truman's presidency was 1.87 percent and during Eisenhower's it was 2.72 percent. Both did not perform well and did not reach over 3 percent. Keep in mind, because of the war, the top income tax rate was raised to 91 percent. It was kept this way under Truman and Ike, but JFK wanted to cut taxes and after his death got his wish of a reduction to 70 percent. Real GDP growth during the JFK/LBJ years was 5.01 percent. [2]

Here's the unemployment rate:




c. Reagan's Tax Cuts

Ronald Reagan is probably the most famous example of a supply-side recovery because it is the most textbook and at the same time the only after the term "supply-side economics" was invented. Additionally, it is the most recent. JFK's rate remained at 70 percent until Reagan, but presidents after Kennedy decided to raise capital gains, which lowered economic activity especially during stagflation. Reagan decided to launch his own supply-side cuts that brought the top rate down to 50 percent and then to 28 percent. We once again found a quick recovery from the peak unemployment rate in 1982:

Unemployment rate from 1981 to 1989.

Once again, here's the real GDP numbers: 2.75 percent from 1977 to 1981 (Jimmy Carter) to 3.61 percent from 1981 to 1989 (Ronald Reagan). [2]

Wealth did trickle down. The number people with an income over $1 million went from 5,000 to 35,000 and the number of billionaires rose to over 50 by the end of the 1980s. The fact is that lower taxes creates more growth in government revenue and at the same time increases economic growth.


III. Capital Gains

I am wrapping this up with capial gains. Here's my argument, basically. Economist and historian Amity Shlaes wrote this about a study on getting rid of the capital gains tax:

"The study was published in 2010, and Sinai says he still stands by it. The results are dramatic. Right now, economists say the economy needs to create about 2.4 million jobs a year. Sinai found that eliminating the capital-gains tax alone, with no other policy change, would create 1.3 million per annum, or more than half the total sought. Real gross domestic product would increase by 0.23 percentage point a year. The jobless rate would drop by as much as 0.7 percentage point in a year. And productivity gains would increase by 0.5 percentage point a year." [4]

The capital gains tax hinders the expansion of business and entrepreneurship which is necessary for every free market capitalist economy to expand, but taxes has hindered them. George Gilder writes about the history of the tax that:

"Government tax policies have done their best to deter innovation and promote mergers, creating a capital blight in which smaller companies that were attempting to expand suffered most throughout the 1970s."
[5]

Sources

1. Kadlec, Charles. "Christina Romer Knows Tax Hikes Will Kill the Recovery."Forbes. Forbes Magazine, 23 Apr. 2012. Web. 06 Apr. 2015.
2. http://www.measuringworth.com...
3. D'Souza, Dinesh. Ronald Reagan: How an Ordinary Man Became an Extraordinary Leader. New York: Free, 1997. Print.
4. Shlaes, Amity. "Want to Create Jobs? First Cut Capital-Gains Taxes." Bloomberg.com. Bloomberg, 26 Oct. 2011. Web.
5. Gilder, George. Wealth and Poverty: A New Edition for the Twenty-First Century. Washington D.C.: Regnery, 2012. Print.

lord_megatron

Pro

1 history genius you indeed are. I appreciate the amount of research that seems to be done, for I would never bother. Anyways against your wrapped argument, Lord Megatron shall certainly do his best.
I didn't read your argument so well, so correct me if I got some facts wrong. First of all I would define the rich as the higher class rather than upper middle. The kind that move around in swanky cars and stuff. And the figures in your article show effects of raising taxes on ALL rather than the rich. What I propose is that taxes should be increased on the rich, and as an extension, decreased on the middle class and poor.
There may be few rich people in this world, but even the combined wealth of everyone else wouldn't match. People that are present in the film/acting industry, business, politics, famous artists and the like have much more money than they need. It would only be fair if taxes were raised on these lucky individuals, considering that the money actually gets used for the goodwill of the people. Let it be our imaginary government.
It would also help root out black money. As the taxes would be raised, tax officials would get paid more, and they would be more alert for collecting taxes from all rich people. Chances of finding black money may increase.
Million and Billionaires would finally be bit more obstructed from exploiting people and showing off their riches. A corrupt government finally cannot use the excuse that they don't have enough money to fund projects for the well-being of others. There would be high economic benefits to people working in government jobs.
Lastly, the high social status and power possessed by the rich shall finally be threatened. The middle-class may even benefit with the increase of taxes on the rich. And fortunately, no more wastage of money shall be tolerated by rich people who don't bother about others and just comforting themselves.
Debate Round No. 2
1Historygenius

Con

Refutations

"And the figures in your article show effects of raising taxes on ALL rather than the rich. What I propose is that taxes should be increased on the rich, and as an extension, decreased on the middle class and poor."

Two important points:

1) What article are you talking about?

2) This debate is obviously about what happens when taxes are raised on the rich, but what we have to acknowledge is that when taxes are raised on the rich, most get their taxes raised anyway. For example, Reagan's 1981 tax cut bill brought the top rate from 70% to 50%. Naturally, people who were paying less than the top rate saw their taxes decreased. If we take a tax hike for example, say Hoover's 1932 increase from 25% to 63%, we will notice most had their taxes increased in general. It is just the way the tax code works.

I think my opponent, although well meaning, is missing the point which is specifically if taxes should be raised on the rich or not, which I am against. When taxes go up, we expect people to pay more including the rich.

"There may be few rich people in this world, but even the combined wealth of everyone else wouldn't match. People that are present in the film/acting industry, business, politics, famous artists and the like have much more money than they need. It would only be fair if taxes were raised on these lucky individuals, considering that the money actually gets used for the goodwill of the people. Let it be our imaginary government."

The problem here is that my opponent has to prove that they have more money than they need. How does my opponent know what is enough for the rich? Yes, they like to live extravagant lives, but when big money is saved and spent, it benefits the economy. Obviously buying things is good, but saving is great too:

"If it is saved, it becomes bank deposits and expands loan capacity for entrepreneurs who want to borrow more money in order to grow. If it is invested, it increases the pool of capital and lowers the cost of capital. Thus lower marginal tax rates increase capital formation (as would a cut in capital gains investments). The result is more growth and innovation and rising living standards." [1]

Next:

"It would also help root out black money. As the taxes would be raised, tax officials would get paid more, and they would be more alert for collecting taxes from all rich people. Chances of finding black money may increase."

Any evidence of this, because the rich got away with a lot during the 91% tax rates of the Truman and Eisenhower years. Usually the larger the taxes, the bigger more tempting the loopholes are. If taxes are too high, the wealthy just leave and take their capital with them. [2]

"Lastly, the high social status and power possessed by the rich shall finally be threatened. The middle-class may even benefit with the increase of taxes on the rich. And fortunately, no more wastage of money shall be tolerated by rich people who don't bother about others and just comforting themselves."

In addition to your argument of public projects, this to me feels New Deal-esque and the New Deal resulted in the worst economic recovery in American history. Consider that Hoover raised the top income tax rate from 25% to 63% and then Franklin Roosevelt raised it up to 79% during the peaceful time of his presidency. The result is the weakest economic recovery in history. Compare our unemployment rate with Canada's during that time:


I await my opponent's refutations of my arguments, but I think my case help's refute his because during the 1980s more Americans moved up the income ladder with lower tax rates.

Sources

1. Cain, Herman, and Rich Lowrie. 9-9-9: An Army of Davids. Herndon, VA: Velocity ; Mascot, 2012. Print.
2. http://tomwoods.com...;
lord_megatron

Pro

Well, lets see what I can do.
"If it is saved, it becomes bank deposits and expands loan capacity for entrepreneurs who want to borrow more money in order to grow. If it is invested, it increases the pool of capital and lowers the cost of capital. Thus lower marginal tax rates increase capital formation (as would a cut in capital gains investments). The result is more growth and innovation and rising living standards." [1]
The problem here is that although economic stats would increase, rich people usually do not share their money with others, which will leave the poor just as they were before. The rich would become richer, and the rest of the people would be unaffected. More growth and innovation maybe would be more when the government uses the money from the rich to improve the country, rather than random people carrying out personal projects rather than working together like in a research center.
This debate is obviously about what happens when taxes are raised on the rich, but what we have to acknowledge is that when taxes are raised on the rich, most get their taxes raised anyway. For example, Reagan's 1981 tax cut bill brought the top rate from 70% to 50%. Naturally, people who were paying less than the top rate saw their taxes decreased. If we take a tax hike for example, say Hoover's 1932 increase from 25% to 63%, we will notice most had their taxes increased in general. It is just the way the tax code works.
I think my opponent, although well meaning, is missing the point which is specifically if taxes should be raised on the rich or not, which I am against. When taxes go up, we expect people to pay more including the rich.
Aren't you contradicting yourself in this paragraph? You first say naturally the taxes for others would increase/decrease then you said the point is raising taxes SPECIFICALLY on the rich. So, in our scenario, the other tax rates should be considered same except the rich.
The problem here is that my opponent has to prove that they have more money than they need. How does my opponent know what is enough for the rich? Yes, they like to live extravagant lives, but when big money is saved and spent, it benefits the economy. Obviously buying things is good, but saving is great too:
I may not know what is enough for the rich, but I certainly know what is enough for the poor. Even 10 percent of rich people's money would be enough for the poor. You still think rich people should be allowed to live extravagant lives, while other people suffer for bread and butter? What use is increasing the capital if there are still poor people on the streets?

"It would also help root out black money. As the taxes would be raised, tax officials would get paid more, and they would be more alert for collecting taxes from all rich people. Chances of finding black money may increase."

Any evidence of this, because the rich got away with a lot during the 91% tax rates of the Truman and Eisenhower years. Usually the larger the taxes, the bigger more tempting the loopholes are. If taxes are too high, the wealthy just leave and take their capital with them.
Were the police paid more and worked with increased vigilance at those times? A government could simply take the benefits of tax but not give it back, while in our scenario the governments would work. If corruption is everywhere, it wouldn't matter if taxes weren't raised on the rich, the government would still have lot of money.
In addition to your argument of public projects, this to me feels New Deal-esque and the New Deal resulted in the worst economic recovery in American history. Consider that Hoover raised the top income tax rate from 25% to 63% and then Franklin Roosevelt raised it up to 79% during the peaceful time of his presidency. The result is the weakest economic recovery in history. Compare our unemployment rate with Canada's during that time:
Most of the rich people can survive very well even being unemployed, and if I am not wrong, your figures are on the raise of taxes on the entire population. But as you said : I think my opponent, although well meaning, is missing the point which is specifically if taxes should be raised on the rich or not, which I am against. So if it is being raised specifically, we can make sure taxes are not raised on the poor, for otherwise this would be about the consequences of raising taxes on all, which is altogether a different issue for me.
Also, can you get more global figures rather than only America? I am in India, and I am arguing from my perspective and actions in the country. It would be intriguing to see the unemployment figures of my country, as I am too lazy for researching myself.(DON'T refute this point!!)
Debate Round No. 3
1Historygenius

Con

"The problem here is that although economic stats would increase, rich people usually do not share their money with others, which will leave the poor just as they were before. The rich would become richer, and the rest of the people would be unaffected. More growth and innovation maybe would be more when the government uses the money from the rich to improve the country, rather than random people carrying out personal projects rather than working together like in a research center."

I don't know where you get the evidence that the rich don't share their money. Rich people become rich through their own work. With their wealth, they might buy an expensive house and car, which benefits home and car dealers. If they hire gardener or cleaning person, then that person benefits. If they are a major CEO of a large corporation, then the money they make also goes to workers getting paid and shareholders getting rewarded. Consumers benefit from being able to purchase products. Basically, as I have proven in my own historical arguments which you have not refuted, people get rich when taxes is lower on the rich.

"Aren't you contradicting yourself in this paragraph? You first say naturally the taxes for others would increase/decrease then you said the point is raising taxes SPECIFICALLY on the rich. So, in our scenario, the other tax rates should be considered same except the rich."

No because you were the one who first started taking about the poor and middle income people, which is not what this debate was about. It was specifically on the rich. I just said that when taxes on the rich are lower that's when the poor and middle class see their taxes cut too.

"I may not know what is enough for the rich, but I certainly know what is enough for the poor. Even 10 percent of rich people's money would be enough for the poor. You still think rich people should be allowed to live extravagant lives, while other people suffer for bread and butter? What use is increasing the capital if there are still poor people on the streets?"

You just ruined your whole case because you just advocated taking 10 pecent of the rich's incomes to give to the poor. In other words, you believe the top income tax rate should be 10 percent.

"Were the police paid more and worked with increased vigilance at those times? A government could simply take the benefits of tax but not give it back, while in our scenario the governments would work. If corruption is everywhere, it wouldn't matter if taxes weren't raised on the rich, the government would still have lot of money."

What are the benefits of taxes? How did you know if the police worked with vigilance or not? Shouldn't you look that up?

"Most of the rich people can survive very well even being unemployed, and if I am not wrong, your figures are on the raise of taxes on the entire population."

The rich are part of the population and are thus paying more in taxes. We know that, overall, tax increases are bad because they take money away from the economy. The rich have more money, so they end up getting tax more than anyone else and see a lot of their money taken away.

"So if it is being raised specifically, we can make sure taxes are not raised on the poor, for otherwise this would be about the consequences of raising taxes on all, which is altogether a different issue for me.
Also, can you get more global figures rather than only America? I am in India, and I am arguing from my perspective and actions in the country. It would be intriguing to see the unemployment figures of my country, as I am too lazy for researching myself.(DON'T refute this point!!)"

If you look at changes in the tax code, people are naturally going to pay more in tax rate increases. Our question is how those tax rate increases effect the rich since they are usually affected the most by tax changes. Usually the rich might see their tax rate change by a lot, let's say an increase of 10%, but when that happens a new income bracket might be set and then everyone might see small increases. The poor might see a small raise like 1 or 2 percent. Yes, there will be people paying the bottom rate, but some who were on that bottom who see their incomes rise will end up paying more. Finally, this debate was specifically about the top income tax rate and capital gains tax rate of the United States, I'm an American afterall.

Conclusion

I clearly won this debate. My opponent didn't debunk my historical argument, which shows how lowering taxes on the rich helps everyone. The capital gains point and the Laffer curve point were not refuted.
lord_megatron

Pro

Lord_Megatron has forfeited this debate.
Debate Round No. 4
9 comments have been posted on this debate. Showing 1 through 9 records.
Posted by lord_megatron 2 years ago
lord_megatron
it was boring
Posted by ClashnBoom 2 years ago
ClashnBoom
Lame! I could've taken this.
Posted by 1Historygenius 2 years ago
1Historygenius
I think you could get better, but you MUST provide proof to some of your arguments.
Posted by lord_megatron 2 years ago
lord_megatron
whatever my last round argument was the only one readable in this debate
Posted by 1Historygenius 2 years ago
1Historygenius
"Wealth did trickle down. The number people with an income over $1 million went from 5,000 to 35,000 and the number of billionaires rose to over 50 by the end of the 1980s. The fact is that lower taxes creates more growth in government revenue and at the same time increases economic growth." That's my third citation, I forgot to cite it properly.
Posted by lord_megatron 2 years ago
lord_megatron
well, then the demented views of lord megatron shall take up this challenge.
Posted by 1Historygenius 2 years ago
1Historygenius
That's because the other side is wrong.
Posted by 16kadams 2 years ago
16kadams
Actually no, it is too hard to be pro taxes lol
Posted by 16kadams 2 years ago
16kadams
I might do this to devils advocate if no one else wants to.
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by tejretics 2 years ago
tejretics
1Historygeniuslord_megatronTied
Agreed with before the debate:Vote Checkmark--0 points
Agreed with after the debate:Vote Checkmark--0 points
Who had better conduct:--Vote Checkmark1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:Vote Checkmark--3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:30 
Reasons for voting decision: Concession.
Vote Placed by 16kadams 2 years ago
16kadams
1Historygeniuslord_megatronTied
Agreed with before the debate:Vote Checkmark--0 points
Agreed with after the debate:Vote Checkmark--0 points
Who had better conduct:--Vote Checkmark1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:Vote Checkmark--3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:30 
Reasons for voting decision: Concession I think...