The Instigator
brian_eggleston
Pro (for)
Losing
7 Points
The Contender
HappilyMarried
Con (against)
Winning
35 Points

Governments should do more to prevent the mega-rich from exploiting tax loopholes.

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Voting Style: Open Point System: 7 Point
Started: 9/5/2008 Category: Politics
Updated: 9 years ago Status: Voting Period
Viewed: 1,930 times Debate No: 5275
Debate Rounds (3)
Comments (20)
Votes (7)

 

brian_eggleston

Pro

Consider the following scenario:

It's a special occasion and you and nine of your friends all go out for a slap-up feast at a right snobby restaurant. You order the set menu for ten plus five bottles of plonk and an hour later you are surfeit and contented so you ask the waiter to bring you the bill, agreeing to split it evenly between you.

At this point, one of your pals (a right toff, dressed in an Armani suit with a Porsche 911 GT2 parked outside) excuses himself and goes to the bathroom.

In the meantime, the bill arrives and as the minutes pass there is no sign of your upper-class chum. Concerned, you go to the bathroom to check he's okay but discover the room is empty. However, the window is wide open and it occurs to you that he may have done a runner. Returning to the restaurant your suspicions are confirmed when you hear the distinctive wail of a flat-six bi-turbo motor and watch in disbelief as your posh mate flashes past in his arse-engined Nazi staff car.

Meanwhile, the waiter is standing by your table, arms folded, tapping his foot, tutting impatiently (it's a British restaurant) and you realise that instead of splitting the �1,000 bill ten ways, you now need to split it nine ways. Therefore, instead of paying �100 each, you now have to pay �111 each.

So what do you think of that posh bloke who scarperred and left his mates to pay his bill? He's total, unmitigated scum, right?

That's the way decent hardworking taxpayers should think about the mega-rich who illegally evade paying tax, but there are also ways that tycoons can legally exploit gaps in the law to avoid paying tax.

Take a hypothetical country, I don't know, let's call it the Democratic Republic of Lesbia, and its government needs to raise $10 billion dollars a year to run it. It has 1 million economically active citizens so each taxpayer must hand over an average of $10,000 a year to the taxman. But if the richest 10% avoid paying tax, the rest of the population have to make up the deficit and each pay an additional $1,111 a year to the revenue department. Now, that's not fair is it ladies and gentlemen?

Now, imagine, you are a citizen of Lesbia on your way home from a twelve-hour shift making industrial belts and fastenings at Lesbian Strap-ons Inc. and your route takes you past the harbour. At that point, a stone gets in through a hole in your shoe and you stop to take it out. Suddenly you hear loud guffaws and you look up and see the factory owner standing on the aft-deck of his Sunseeker Manhattan super yacht. He is dripping in high-class prostitutes and they are all quaffing champagne and pointing and laughing at you.

With whatever dignity you can muster, you get up and walk on, pretending to ignore them. Now the thing is, you are friendly with the girl in the accounts department and she tells you that the factory owner doesn't pay any tax at all because he spends over sixty days a year abroad, which allows him to claim non-residency status meaning that he's not liable to pay Lesbian income tax. Even so, he still takes advantage of all the public services the government provides for Lesbian citizens and you realise that that you, a poor factory worker, are in effect, financially subsiding your multi-millionaire boss and your $1,111 probably paid for those hookers and all the bubbly as well.

I suppose you can't blame the big boss man for exploiting this loophole but it's not fair that ordinary, hardworking families should be worse off as a result. For this reason, I contend that governments should do everything they can to prevent the mega-rich avoid paying tax.
HappilyMarried

Con

You analogy is flawed.

The difference in your ‘restaurant agreement' is that that your rich bloke AGREED to pay his EQUAL share BEFORE the meal was ordered and the bill presented, then ran from the restaurant without fulfilling his obligation. Obviously this chap is in the wrong.

In the tax scenario, the mega-rich bloke presumably agrees to pay all taxes he is obligated to pay by law, which he presumably did, but it is less then your equalized share because he uses holes in the law to reduce his tax burden. While not fair from your point of view, it is legal; Therefore he is in the right.

A ‘loophole' in any law, means that the person who uses a loophole is still well within the law as it was written therefore not a law breaker.

More simply put, it is what is written into tax law; not what is meant to be written into tax law that matters.

It is the government's job to close any loophole or unintended consequence of a give law, but not to prosecute those who see the hole in the law and take advantage. This would be akin to charging a crime for a law not broken, but ‘almost broken.'
Debate Round No. 1
brian_eggleston

Pro

Many thanks to my opponent for taking up this debate.

In his rebuttal he stated that my analogy is flawed. This is simply not the case. I was just trying to illustrate that some rich people evade tax illegally and some avoid paying tax by exploiting loopholes, which is not illegal.

The thrust of my argument rests with the fact that governments may be aware that loopholes in the law that allow extremely wealthy people to avoid paying tax exist, but they choose not to close them because it would be financially disadvantageous for ether them or their mega-rich friends and political donors. This, ladies and gentlemen, is called corruption.

As George Dubya himself said: "You know what else I think when they say, tax the rich? Most rich people are able to avoid taxes, and if you can't raise enough money from taxing the rich, guess who pays the taxes? Yes, you do."

http://www.joecasaletto.com...

But has Bush done anything to close the loopholes? No, of course not. Why would he? It would make him, his family and his political donors all worse off. Why should he care if ordinary, hardworking Americans pay more tax as a result – they probably voted for the Democrats anyway. After all, he knows that more Americans voted for Al Gore than him at the last election and he had get his brother Jeb to rig the ballot in Florida to get himself re-"elected". And he talks about spreading "democracy" around the world – ha ha ha ha!

What people sometimes forget is that governments in democratic countries are there to serve the interests of the entire population – the interests of the average Joe are just as important as the interests of an oil magnate or a property tycoon.
HappilyMarried

Con

While the thrust of your argument may be "that governments may be aware that loopholes in the law that allow extremely wealthy people to avoid paying tax exist, but they choose not to close" Your premise for this debate was stated as "Governments should do more to prevent the mega-rich from exploiting tax loopholes."

That being said, I need to merely prove that the government job does not rest in "preventing the Mega-rich from exploiting Tax Loopholes,' but in re-writing the tax laws so as to reduce the loop-holes the mega-rich use to not pay their fair share. There is a difference, however subtle. You are not punishing the rich for using loopholes, you are closing the loopholes.

Politics aside from your statement, the second fault in your statement is that the President does not set tax law:

Wikipedia: "Ratification of the Sixteenth Amendment"

In response, Congress proposed the Sixteenth Amendment (ratified by the requisite number of states in 1913[5]), which states:

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

This amendment puts Taxation into the hands of Congress and the legislative branch; While GWB might want changes to the tax laws for whatever reason, he has not authority to make those changes, he is at the mercy of Congress to pass his tax policies, changes to the tax law are made in congress, and approved by the president (signed into law or allowed to become law), and the problem rests solely with Congress. The only real power of the presidency rests in his VETO powers.

So while I will agree the tax laws need to be changed, as your premise is stated, the government does not need to prevent the ‘mega-rich from exploiting loopholes', they need to correcting the laws to remove the loopholes.. Semantics I know, but that is exactly what loopholes are.. We need to be clear in our statements.

Political statement now:

If the DEMOCRAT CONTROLLED Congress was so opposed to the tax policies of the Bush Administration and by extension the Republican party, they would need to merely show some backbone, propose and pass a bill (with no other riders/earmarks etc) with the tax reforms the Democrats say they want, thus putring it on the president's desk, forcing him to use his veto powers. This would make the statement they (as a group) say they want, but no such bill has ever been passed. They can't even agree themselves, on an action plan. So the question is.. do they REALLY want it, or just want to complain to the American people about it?

End of Political Statement.

I am enjoying this debate!
Debate Round No. 2
brian_eggleston

Pro

In a brief response to his first remarks, I think my opponent and I can now agree that governments "need to (be) correcting the laws to remove the loopholes" that allow the mega-rich to avoid paying taxes as a definition of this debate.

He then continued to remind us that it is Congress rather than the President of the USA that makes laws and duly supports his argument by quoting the Constitution. As a Brit I accept his argument unreservedly and would not presume to contradict him on matters pertaining to the American legislature. However, I anticipated this when I originally started the debate, which is why I entitled it using the generic term "governments" as opposed to "the Government", hoping to argue the moral, rather than the legal principles.

My opponent then pointed out that the US Congress is Democrat controlled and they have failed to embarrass the President by presenting him with a Bill that would close loopholes for the rich, thus forcing him to either veto it or upset his wealthy friends and political donors. That's because the Democrats need wealthy people to donate to their election campaign funds just as much as the Republicans. Imagine if the Democrats approached a potential donor for money and were honest about their intentions…

Ruth-Liz Kapitalitz: Welcome to Megabucks Oil Exploration and Environmental Destruction Inc. Do have a glass of fermented panda tears and a duck-billed platypus voul-a-vent.

Democrat Fundraiser: Very kind, I'm sure and thank you for seeing me, Ms. Kapitalitrz. Now, as you know, we have an election coming up and we require a great deal of money to fund it, so we were just wondering if you could see your way clear to bunging us a few million dollars?

RLK: Well, I don't know, what's in it for me?

DF: Er…well, we are a very socially aware party compared with the Republicans and we were hoping you'd do it out of the goodness of your heart.

RLK: What? You must be joking! No, tell me why I would want a Democrat Administration over a Republican one. I gave them a huge wad of cash before the last election and in return they promised not to ask me any awkward questions about my tax affairs. What do you think about that?

DF: Well, our policies are very clear. We are going to squeeze the rich until their pips squeak and if we find any posh people trying to dodge their taxes we're going to lock them up and throw away the keys.

RLK: I see. Well thank you for coming and good-bye (picks up phone) Cindy-Jane, have Security show this gentleman off the premises would you?

Although some rich people are philanthropic and give large amounts to political parties expecting nothing in return, many are not, and are very unlikely to financially support a candidate who intended to make tax raids on their fortunes. That is why party funding should be capped, but that's a matter for another debate.

However, in the meantime, governments have a moral duty to ensure that the working and middle classes do not pay more tax than they should because the social and political elite use their influence to ensure their own financial interests come first and foremost.
HappilyMarried

Con

So we come back to the original quote for the close of the debate, is it "Governments should do more to prevent the mega-rich from exploiting tax loopholes."

This reads to me - that you should somehow punish the rich for using loopholes to avoid taxation vs focus on the cause of the issue which is the loophole itself. It is a question of semantics, I am sure, but then that is all loopholes are, is the tweaking of words in a given law or phrase.

Do you believe as both of my opponent and I do, that the govt responsibility resides in closing loopholes, so they do not exist, and just avoid the whole upperclass vs middle class vs poor argument.

If this is your belief then I have proven my point and the flaw in the initial premise of the debate.

If this debate began with "Governments should do more to close the tax loopholes that allow the mega-rich to avoid their fair share of taxation." I think out opponent and I would have no cause to debate. However that was not the question..
Debate Round No. 3
20 comments have been posted on this debate. Showing 1 through 10 records.
Posted by HappilyMarried 9 years ago
HappilyMarried
Flat tax fixes it all, 1 business = 1 person, 1 person=1 person, pay your 15% on 100% net revenues, (only payroll, benefits and Cost of good sold are deducted from gross revenues to create net revenues.) That basically gives business tax breaks for employing people, and you do not double tax those revenues because the people will pay their own 15% on their income.
Posted by brian_eggleston 9 years ago
brian_eggleston
Well you know, it's very difficult to convince the electorate of the case for closing opportunities to avoid paying tax (hand's up who likes paying tax!) without being able to give a firm guarantee that by ensuring very wealthy people pay their way, taxes will be cut for everyone else.
Posted by DoctrinallyCorrect 9 years ago
DoctrinallyCorrect
HappilyMarried you won this debate hands down. Way To Go. CONGRATULATIONS
Posted by Ragnar_Rahl 9 years ago
Ragnar_Rahl
I am not claiming there is no difference. My claim is simply one of an important similarity, a claim you have not refuted :D.
Posted by HappilyMarried 9 years ago
HappilyMarried
Come on.. a Hitler supporter, that is a little harsh..

I am merely stating that the people are within the laws as written, not that I agree with the way the laws are written, nor the moralality of hte mega-rich in this case, but the govt that allows it to continue is at fault not the citizen. I will and have spoken out publicly against the abuse of the tax law.

The problem is with the law makers, not the citizens. Those are whom we should speak and act out (by voting) against.

In Hitler's case he made policy/law then used the GOVERNMENT AGENTS to act on those laws/policies, here we are talking about citizens skirting the law to avoid taxation. Again I think a huge difference.
Posted by Ragnar_Rahl 9 years ago
Ragnar_Rahl
"Are you seriously comparing Hitler to a person using loopholes in tax law to avoid taxation?"

Not other than on the grounds of them not breaking any laws, no, I'm comparing you to a Hitler supporter. Because your reasons are reasons that apply to them as well.

Morally, I consider the people who write the tax laws far more comparable to Hitler :D.
Posted by HappilyMarried 9 years ago
HappilyMarried
Are you seriously comparing Hitler to a person using loopholes in tax law to avoid taxation?

I also believe in the flat tax, but not relevant to the debate.

Looking back at History is always 20/20... I merely mean that the govt needs to correct hte law, not punish those who are with-in it's boundaries.
Posted by Ragnar_Rahl 9 years ago
Ragnar_Rahl
Hitler never broke any laws... Hitler write the laws :D
Posted by PoeJoe 9 years ago
PoeJoe
"it is legal; therefore he is in the right."

What? *points at history*
Posted by CogitoErgoCogitoSum 9 years ago
CogitoErgoCogitoSum
Of course the rich should pay their fair share into taxes. But what constitutes a fair share? It is unfair to ask the rich to pay more simply because they have or make more. If I bust my rump and make twice the amount, why should I pay a higher percentage than before? The change in tax bracket is whats unfair. Because being twice as productive in society necessarily means that I get docked more at the end of the day. A punishment, so to speak, for productivity. Tax percentage bracketing should be eliminated. We should all be taxed the same percentage of what we make, regardless of income.
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