The Instigator
Valladarex
Pro (for)
Winning
3 Points
The Contender
CASmnl42
Con (against)
Losing
0 Points

Implement a Flat Tax w/ Standard Deduction

Do you like this debate?NoYes+0
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 3 votes the winner is...
Valladarex
Voting Style: Open Point System: 7 Point
Started: 2/26/2016 Category: Politics
Updated: 11 months ago Status: Post Voting Period
Viewed: 798 times Debate No: 86723
Debate Rounds (5)
Comments (16)
Votes (3)

 

Valladarex

Pro

Hello! As the battle for the presidency wages on in both major parties, one of the most important topics brought up is tax policy. The two democratic candidates are supporting tax increases, while the Republicans are supporting tax decreases. However, no two candidates have the same tax plan.

This will be a debate on the topic of reforming the individual income tax. I believe the best way to reform income tax is to throw out the former income tax code (except for the earned income tax credit, child tax credit, home mortgage interest deduction, charitable tax deduction, student loan deduction), and replace it with an 18% flat tax on all personal income with a standard deduction equal to 200% the federal household poverty line for every household. The details of this plan will be laid out in round two.

My opponent must either be for keeping the current income tax code or for replacing it with their own plan, and must briefly state what they will be arguing for in the first round.

If you would like to debate me on this topic, please say so in the comments and I will choose the most qualified person within a few days!
CASmnl42

Con

Thanks to Valladarex for suggesting this topic and for agreeing to debate me. I"m looking forward to a spirited discussion.

In this round, I will briefly outline what I see as a series of fair and equitable adjustments to the U.S. Tax Code. In Round Two, both my opponent and I will go into greater detail and advocacy for our basic plans.

The United States Tax Code as currently constituted reflects a series of political compromises. This has made it complex and unwieldy, but it also has the virtue of reflecting a balancing of political interests through the democratic process. My aim, then, would be to preserve the basic structure of the tax code without making any radical changes, while also seeking to implement reforms that simplify personal income tax and eliminates various perverse incentives.

Here is a basic summary of what I would propose:

Lower corporate income tax: The United States has one of the highest corporate income tax rates in the world. In our global economy, this has encouraged many corporations to keep their cash reserves overseas and avoid the hefty tax bill that would come with repatriation. We should lower the corporate income tax rate to be more commensurate with other Western economies to encourage those assets to be brought home and spent in America.

Treat capital gains as ordinary income: Returns on investment are taxed at a much lower rate than income earned from labor, which is why people like Warren Buffet will talk about paying less in taxes proportionately than his secretary, or why Mitt Romney only paid about 17% in taxes the year before he ran for President. Part of the justification for this has been our high corporate income tax rate, which is so high that investors can credibly argue that treating capital gains as ordinary income effectively subjects them to double taxation on the same earning. Thus, in conjunction with lowering the corporate income tax rate, increase capital gains rates so that the investor class pays the same on their passive income as they would if they had worked for it.

Eliminate the cap on payroll taxes: Medicare and Social Security are not funded by income taxes, but on a flat 7.65% payroll tax on earnings up to $118,500. People making $800,000 a year, then, pay the same amount as someone making $120,000. The bulk of this tax burden falls on the middle class, who make less than $118,500. There are two great reasons for eliminating the cap: first, this is an incredibly regressive tax, and the tax burden should be shared more equitably with higher earners. Second, eliminating the payroll tax limit makes Social Security solvent into the indefinite future.

Eliminate taxes for income earned overseas: The United States is one of the few nations to subject its citizens living abroad to its income taxes - income that a citizen earns while living in Paris, France, for example, is still taxed as though the individual lived in Paris, Texas. Often, the income is subjected to taxes in the country of residence as well, leading to a significant tax burden. This policy should be ended.

Increase tax rates on higher earners: For decades, we have slashed at tax rates for high earners under the theory that these tax savings would be plugged back into the economy, creating jobs and boosting spending. George H.W. Bush, before being selected as Reagan"s running mate, called this "voodoo economics," and the intervening 36 years have not proved him wrong. The American economy, and the American middle class, were at their strongest during the era of significant progressive taxation.

Make the IRS do taxes for you: For most people, the tax code is a pain because you have to prepare your own return, and risk auditing if you get it wrong. In most nations, the tax collecting authority prepares the return for you, and you simply need to make corrections if any errors have been made. While this is a bit reductive, the basic reason the United States doesn"t already do this is called "H&R Block lobbyists." To simplify taxes for the vast majority of Americans, we should make the process as convenient and painless as possible. That means not wasting a pile of consumer money on one or two tax preparation companies.

Thank you, and I"ll eagerly await the details of my opponent"s plan.
Debate Round No. 1
Valladarex

Pro

Thank you CASmnl1 for posting a well thought out proposal. My bill is the result of dozens of conversation of conservations with people of other views than my own. I have attempted to create a truly multi-partisan bill that ensures effective and positive change while also maintaining political feasibility. Here is the outline of my reformed income tax code.

Income Tax Simplification Act

A bill to remove tax loopholes, increase fairness in taxation, allow for easier completion of taxes, and encourage economic growth.

Preamble

The tax code as we know it today is a catastrophe. It includes tens of thousands of pages of complex deductions, special taxes, rules, definitions, and loopholes. This flawed system allows very wealthy people to pay lowers taxes than lower middle income families. It allows those who can afford better tax accountants and tax lawyers to gain the system, while others have to pay a much larger percentage of their income. This is not a fair nor desirable system to have.

The complications in the tax code also costs the country billions of dollars a year and discourages economic growth. A simple, easy to understand tax system will be to the benefit of all Americans. We can have a low, flat tax rate with a standard deduction that [keeps the federal budget balanced](https://docs.google.com...).

Section 1. Abolition of Current Taxation System

(1) All current sections of the individual income tax code are hereby abolished, but for the following exceptions.

(2)The home mortgage interest deduction 26 U.S. Code § 163 (https://www.law.cornell.edu...) shall remain intact.

(3) The charitable tax deduction 26 U.S. Code § 170 (https://www.law.cornell.edu...) shall remain intact.

(4) The student loan interest deduction 26 CFR 1.221-1 (https://www.law.cornell.edu...) shall remain intact.

(5) The earned income tax credit 26 U.S. Code § 32 (https://www.law.cornell.edu...) shall remain intact.

(6) The child tax credit 26 U.S. Code § 24 (https://www.law.cornell.edu...) shall remain intact.

(7) The residential energy credit 26 CFR 1.23-1 (https://www.law.cornell.edu...)shall remain intact.

Section 2: The Simplified Tax System

(1) There shall be a flat tax rate of 18% on all personal income for households and individuals earning below $1 million annually.

(2) Personal income shall be defined as income that is received by persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors' income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.

(3) Households earning under $1 million annually shall be subject to a standard deduction of 200% the federal poverty threshold for their respective household sizes. (For example, a family of 3 making $60,000 would have a standard deduction of $40,180, and pay an 18% flat rate on the $19,820 adjusted income following said deduction, giving an effective tax rate of 5.95%. Avg. effective tax rates by quintile found here (http://i.imgur.com...)).

(4) This standard deduction shall be updated annually to account for changes to the poverty threshold.

(5) For households earning above $1 million annually, there shall be a flat and minimum tax of 25% on all personal income.

(6) The IRS is responsible for enforcing this reformed tax code.


Key Benefits

The highlights of the bill are as follows:

  • Removes all tax loopholes currently in 65,000 page tax code
  • Allows for easier filing of taxes, saving citizens about $160 billion and 6 billion hours annually. (http://www.huffingtonpost.com...)
  • Implements low 18% maximum income tax for households making less than $1 million
  • 25% flat tax on >$1 million earners
  • Increases progressiveness of current effective tax rates
  • Helps low/middle income families by expanding tax deductions
  • Gives poor families money instead of taxing
  • Maintains a balanced budget

With my main talking points laid out, I look forward to hearing your response!

CASmnl42

Con

CASmnl42 forfeited this round.
Debate Round No. 2
Valladarex

Pro

Unfortunately, it looks like my opponent has left the site. I hope he returns!
CASmnl42

Con

CASmnl42 forfeited this round.
Debate Round No. 3
Valladarex

Pro

Unfortunate.
CASmnl42

Con

CASmnl42 forfeited this round.
Debate Round No. 4
Valladarex

Pro

Vote for me!
CASmnl42

Con

CASmnl42 forfeited this round.
Debate Round No. 5
16 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Valladarex 11 months ago
Valladarex
Works for me!
Posted by CASmnl42 11 months ago
CASmnl42
Glad this got re-posted. I'll accept the challenge tomorrow, after we get though Super Tuesday here.

Per your first round, I will briefly lay out what I will be arguing for in the first round (in just a paragraph or two). I then presume Round 2 will be for laying out the details of our own plan, and move into rebuttals in Round 3. Work for you?
Posted by CASmnl42 12 months ago
CASmnl42
I'm still up for this if you are.
Posted by Spartan9876 1 year ago
Spartan9876
@Sgt4Liberty

1) C'est la m"me chose pour moi, I don't have time for your stupidity; ergo, cette remarque, will be my last.
2) You are truly incapable of grasping my argument. I am not discussing our monetary policy, nor am I discussing our fiat system. I am discussing wealth.
3) You are also incapable of using a thought experiment (i.e. the freezing of time).
4) You posited "I've been in the remote jungles of Thailand, destroyed cities in Kuwait/Iraq"; the latter is of concern here. By saying that you have destroyed cities, you imply that you have destroyed their institutions that make up the city. By destroying said institutions, you are destroying people's livelihood and uprooting them; I am merely using your words. Lastly, I never claimed that you killed anyone; again, your native language is English, please use it.

Comme j'ai dit, this conversation is finished, non? (This is something you would call a rhetorical question.)
Posted by Sgt4Liberty 1 year ago
Sgt4Liberty
@Spartan9876

Yup, better your bottom I am! I don't have time for stupidity. I read your response, and apparently I need to break things down Barney style for you (oops, that sounded condescending). Since you are still having a hard time grasping how money and business works, explain to you that GDP doesn't come before borrowing money into existence, in order to start the business, in order to be able to contribute to the GDP. You have it backwards. So again, there is no FINITE amount of money with our current phony fiat system. You mention freezing time, LMAO. OKAY, let's whip up some magic to freeze time. Invite Santa and the easter bunny over for tea while you're at it.

BTW, I never destroyed, killed or anything/anyone in those countries. Nice try is your ASSumptions kid.
Posted by Spartan9876 1 year ago
Spartan9876
@Sgt4Liberty

You are bloody condescending, you know that? If you will talk like that, then I will also accuse you of things.

YOU must go back to English school because you are feeding words into my mouth. Learn to read, eh? I never made a claim regarding the creation of money, I am making a claim about the the current finiteness of money. Yes, they create money just like that; however, you are missing a massive point, re! If one were to freeze time, is there an infinite amount of money currently in circulation via cash or credit? The answer is no.

Oh, you have been in the remote jungles of Thailand, destroyed cities in Kuwait/Iraq (thereby impoverishing more people), so yes, you have seen the poor first hand, you were also the creator of it FIRST HAND.
Well, yes, I have not caused it first hand. I work with the people who go into countries to fix the problems YOUR people make.

C'est tout! Nous avons fini!
Posted by Sgt4Liberty 1 year ago
Sgt4Liberty
@Spartan9876

You have NO Clue on how money is created do you? Money is sprung into existence by Fractional Reserve banking. If I want a bank to create $100,000 new dollars, I can go get a loan and guess what? They aren't giving me their money they have in the bank. The promissory note that I sign, creates the money. Same thing with credit cards. That's why with a fiat system, we have so many booms and busts. They are a result of an expansion and retraction of the money supply.

I've been in the remote jungles of Thailand, destroyed cities in Kuwait/Iraq, so I've seen POOR first hand. I don't think you really have.
Posted by Spartan9876 1 year ago
Spartan9876
Sgt4Liberty
You must be kidding me.
Of course there is a finite amount of wealth at any given time.
I will give you an example, if there as an infinite amount of wealth at any given time, we would not be able to measure GDP because the wealth the country would generate is infinite. Thus, the fact that we can specify the amount of money means that there is a finite amount registered to it.

We are not talking about the fact your country can print money to ad nauseam or ad infinitum; we are referring to actual wealth, not IOUs.

Moreover, you think I live on Mars? Wow... that is kind of sad. Well, I wish we had that technology, but I am sorry, we just have not reached that technological development.

Lastly, I must check out some POOR countries to discover what being broke is all about? That is utterly nonsensical. By 'being broke' I assume you mean running out of cash? There is plenty of poverty in the United States, you do not need to go abroad for that experience.
Posted by Sgt4Liberty 1 year ago
Sgt4Liberty
@spartan9876 So there's a finite amount of wealth at any given time huh? You obviously don't have a CLUE on how money is created in this country. Matter of a fact, I think you live on Mars or something, because you don't have a clue on life with your response. It's people like you that should go check out some POOR countries and get a reality check on what being broke is all about.
Posted by CASmnl42 1 year ago
CASmnl42
I'd quite enjoy it. I'll wait for your decision
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by illegalcombat 11 months ago
illegalcombat
ValladarexCASmnl42Tied
Agreed with before the debate:--Vote Checkmark0 points
Agreed with after the debate:--Vote Checkmark0 points
Who had better conduct:Vote Checkmark--1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:--Vote Checkmark3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:10 
Reasons for voting decision: Much forfeits by Con.
Vote Placed by dsjpk5 11 months ago
dsjpk5
ValladarexCASmnl42Tied
Agreed with before the debate:--Vote Checkmark0 points
Agreed with after the debate:--Vote Checkmark0 points
Who had better conduct:Vote Checkmark--1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:--Vote Checkmark3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:10 
Reasons for voting decision: Con ff many times, so conduct to Pro.
Vote Placed by fire_wings 11 months ago
fire_wings
ValladarexCASmnl42Tied
Agreed with before the debate:--Vote Checkmark0 points
Agreed with after the debate:--Vote Checkmark0 points
Who had better conduct:Vote Checkmark--1 point
Had better spelling and grammar:--Vote Checkmark1 point
Made more convincing arguments:--Vote Checkmark3 points
Used the most reliable sources:--Vote Checkmark2 points
Total points awarded:10 
Reasons for voting decision: ff