Are Direct Taxes Bad
Debate Rounds (4)
Round 1: Acceptance
Round 2: 3 point argument (no Rebuttles and no more than 3 points)
Round 3: Rebuttles (no bringing up new info, just debunking statements)
Round 4: Closing Statements (No Rebuttles, just closing off your argument with a statement, no more than 2 paragraphs.)
Direct Taxes: Income, Property, etc. (Taxes imposed directly on an individual, not sales tax!)
For centuries taxes have been the sources of wars like the Ameran revolution, and have been the source for governments to function corruptly. For the following three reasons I present why Direct Taxes are theoretically bad for society.
1) Direct Taxes kill incentive
Incentive is what makes your average person get up to work everyday and do his/her job to make money and help society. The incentive of which we speak is infact money. Any argument against that is false as it has been proven incentive is needed to work, communism tried to elemenate incentive and it failed dramatically. When a persons income is directly taxed or their property that then pay for or their utility, it leads to there incentive to take a down turn. When a person gets the big IRS letter that's complicated and annoying about paying your income tax you feel as if you are being stolen from, I do every time I get that letter for my work.
2) Direct Taxes Hurt the Economy
When a person is taxed on their income or any other direct function, they have less money to spend. When they have less money to spend they are less inclined to go out and spend money at business' and such, which in turn brings in less revenue for that business and causes it to shut down. We then have a dominio effect of business shutting down and our economy collapsing. Business relies on consumers and consumers rely on the amount of money they make, direct taxes steal some of that money.
3) Direct Taxes are not needed for government function
It was only in 1911 that the income tax became a law. For a long time the government did just fine without taxing the people directly, voluntary taxes such as sales and tariffs all brought in enough revenue for the government. In line with that their are many charity organizations that handle all the problems that government tries to deal with today. When people aren't directly taxed they can then donate more money to these organizations who will truly use that money for the right purpose instead of hoping our government doesn't wastefully spend it.
As I have shown, direct taxes: lower incentive to work, hurt the economy all around, not needed for the government, and lower charitable donations.
That"s a very interesting set of arguments from my opponent. Under Pro's rules, I will only counter them in the next round.
"Bad" is a relative term, so I have defined it as an action leading to a situation inimical to the benefit of its payees.
1. Direct taxes are used to counter income inequality
Direct taxes, as opposed to indirect taxes, are beneficial because they serve a redistributive role in an economy.
Indirect taxes (such as a Goods & Services Tax) are regressive, because they form a larger percentage of the income of lower-income groups than higher-income groups. This causes income inequality to worsen. Income tax on the other hand, which is a direct tax, is pegged to income levels. At the very least, each income groups pays tax proportional to its income. In most countries, income tax is progressive, so higher income groups pay a larger percentage of their income as tax. Direct tax therefore is used to counter income inequality.
Reduced income inequality can lead to an improved state of technology (since more people benefit from research and development) and a society with lower levels of crime, disease and poverty. These are all beneficial to all members of society. Consequently, direct taxes are not inherently bad.
2. Direct taxes counter inflation
Governments often use direct taxes to influence aggregate demand in an economy.
For example, when countries see strong economic growth (of the equitable kind), its citizens become more inclined to increase their private expenditure on goods and services. On a large scale, it can cause demand-pull inflation. In order to prevent the economy from running into an inflationary spiral (uncontrollable inflation), governments may raise income taxes. This reduces the disposable income of its citizens, and disinclines them to spend lavishly on non-necessary goods and services. In the process, the government is able to counter the ill-effects of hyperinflation and an inflationary spiral.
Hyperinflation and inflationary spirals affect all income groups negatively. Examples (Source 1) include Hungary in 1945, which eventually saw the erosion of its middle class, or Zimbabwe in 2008, which saw a 50% collapse in output over the following nine years.
3. Direc taxes are used to produce public and merit goods
Direct taxes are not inherently "bad" because they are meant for social benefit. The collected tax is eventually used on public and merit goods, such as infrastructure, roads, parks, law enforcement, civil defence and in some countries, social welfare too.
Since these taxes are going towards the collective benefit of its payees, it is incorrect to suggest that they are inherently "bad".
I conclude that direct taxes are not bad. Over to my opponent.
1. Boesler, Matthew. "How 9 Countries Saw Inflation Evolve Into Hyperinflation." Business Insider. October 5, 2013. Accessed March 27, 2015. http://www.businessinsider.com...
That statement is not only invalid but it is constitutionally wrong. We are a capitalist country founded on principles that protect a persons right to the fruits of their labor. To redistribute wealth is a extremely socialist its practice and it cannot be allowed in our society. On then contrary if lower income people aren't taxed, they have a chance for increased wealth. As for indirect taxes, they aren't progressive as they only hurt those who can't control their spending.
"Direct taxes counter inflation"
Taxes have nothing to do with inflation at all since inflation is over producing money. Therefore that argument is invalid 100%.
"Direct taxes are used to produce public and merit goods"
All you mention in this point is great, which is exactly why we have indirect taxes like sales and goods tax as well as tariffs, etc. These taxes would be collected at a Federal and state level and local level so three different sources of revenue would be able to pay for these things still, the direct taxes aren't necessary. All the public workers would also be able to be be given lower wages as they wouldn't be losing any money anymore! So less money would be needed to be spent on wages by the government.
I conclude that my opponent brought up socialist ideology, and failed to provide logical evidence that only direct taxes can pay for goods. Over to my opponent for his Rebuttles.
I am astonished at Pro's lack of economic understanding. I shall begin by rebutting Pro’s initial arguments.
1. Direct taxes kill incentive
Direct taxes, unless progressive, do not “kill incentive”. Incentive to work harder is “killed” when an individual pays more tax as his income increases. This “kills” the incentive to work harder, because the reward is disproportional to the non-economic costs of working harder (spending less time with family etc.). Income tax does not encourage unemployment, because people have financial obligations to fulfil regardless. Pro is therefore incorrect to suggest that direct taxes “kill incentive”.
2. Direct taxes hurt the economy
The government does not hide tax revenue in a broom closet. It spends it by purchasing public and merit goods and services from local businesses. While it is true that individual consumption is reduced, this is more than made up for by government expenditure in the economy, which is a component of aggregate demand. The money stays flowing in the economy. Pro’s argument makes zero sense.
For the benefit of voters, aggregate demand = private consumption + private investment + government expenditure + net value of exports.
3. Direct taxes are unnecessary for the government to function
The world’s understanding of macroeconomics was greatly enhanced during the Great Depression, when J.M. Keynes’ explained previously inexplicable phenomena. Since then, governments worldwide rely on fiscal and monetary policy (both of which rely on manipulating taxes) to influence aggregate demand and control the economy. Pro is incorrect to say that it is unnecessary, just because it was not in use before 1911. Pro should bear in mind that the global economy has changed tremendously since 1911.
I shall now deal with Pro’s rebuttals to my arguments.
1. Income inequality
I am not American and Pro never specified that U.S. is the country we are using. Nonetheless, I am surprised at his conviction that progressive taxation “cannot be allowed in our society”, given that the US has one of the most progressive systems of taxation in the developed world. I shall leave Pro to introspect. Indirect taxes are regressive, not progressive, and I have quoted a source in comments for Pro’s reference.
Pro has confused “inflation” with “quantitative easing”. Inflation is a sustained increase in general price levels as a result of increased aggregate demand or increased costs of production. Direct taxes reduce spending and thereby control the rate of increase of prices. I shall leave Pro to introspect.
3. Public and merit goods
Pro agrees that taxes are used for societal benefit. He cannot then say that they are inherently bad, even if they are unnecessary.
I am convinced that Pro has at best a sketchy understanding of macroeconomics. His confusion over economic policy and political ideology, and his misunderstanding of basic economic terms such as “inflation” shows just that. I look forward to seeing his response.
I'll keep this short and to the point.
For my closing statement I will start out that con has presented an argument to which he has shown he does not understand the core values and economic system of the United States. For the points that I stated of, it kills incentive, it hurts the economy in total by deystroying business and lowering the amount of charity, and finally that taxes aren't needed for the function of government. I urge a vote in affirmation. Also since my opponent failed to comply with the rules of this being a philosophical debate not factual.
I would like to address Pro's rather ignoble comments before I close.
I accused Pro of little economic understanding because he uses economic terms loosely and confusingly. Further, he claims that no relationship exists between taxation and inflation, and any economic students can tell you otherwise. Pro decided to respond by accusing me of little economic understanding, without explaining his reasons.
I don't understand what Pro means by a non-factual debate; did he intend to manufacture his own version of how economies work? Why call the debate theoretical and then bring in the USA for context, is that not a violation of Pro's own rules?
Pro says that I do not understand the economic system of the USA, but nowhere in his opening argument did he mention that the debate centres around the US economy. I am not American, and I assumed that the debate applied to economies in general. Even so, Pro did not realize that the US has one of the most progressive systems of taxation in the world. All this says is that he does not understand his own economy.
Pro made some more strange arguments about charity in his closing lines, as though he does not realize that charitable donations are tax-deductible. I shall leave the voters to determine that.
My arguments are all sound, and Pro has failed to uphold his end of the debate. He may accuse me of violating the rules (which I frankly still do not understand) but it was Pro who brought in the USA for context first. I urge voters to read the debate carefully and vote wisely.
1 votes has been placed for this debate.
Vote Placed by Varrack 1 year ago
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Reasons for voting decision: Conduct - Tied. Pro made the assumption that Con was American, which was a wrong move because not everyone on the site is. However, Con seemed to make the debate more factual by citing sources/examples when Pro specified that this was a philosophical debate. Arguments - Con. He rebutted Pro on each of his points including inflation, the economy, and the public good, while Pro's responses didn't meet Con's arguments as much as he should have to successfully counter his points.
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