The Instigator
RoyLatham
Pro (for)
Winning
1 Points
The Contender
God_Soldier
Con (against)
Losing
0 Points

Obama's plan to tax the rich would do little to solve the debt problem.

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
RoyLatham
Voting Style: Open Point System: 7 Point
Started: 2/22/2012 Category: Economics
Updated: 4 years ago Status: Post Voting Period
Viewed: 3,582 times Debate No: 21377
Debate Rounds (4)
Comments (51)
Votes (1)

 

RoyLatham

Pro

President Obama says that Republicans are protecting millionaires and billionaires from increased taxes. He further implies that increasing such taxes could have a substantial impact towards balancing the budget. He has proposed a "Buffet Plan" whereby the rich would have to pay a minimum of 30% tax on income. This debate is about whether this plan would generate enough revenue to significantly reduce the ongoing deficits in the United States. Symbolic or social reasons are not a subject of this debate; it's all about the money.

The "rich" are people declaring an income of one million dollars or more on their Federal income tax returns.

President Obama's position that taxing the rich will make great strides towards resolving the deficits:

"“Do we want to keep these tax cuts for the wealthiest Americans or do we want to keep investing in everything else?” he said at an event in Las Vegas. “We can’t do both.” [P1. http://www.rawstory.com...... ]

The implication is that if the rich are taxed then we can continue "investing in everything else." The strong implication is that the tax increase would completely solve the deficit problem.

We can dismiss the idea of a 100% solution as political exaggeration. I think the tax would be a substantial contribution if reasonably expected to reduce deficits by at least 25% in the next ten years, independent of spending cuts. My opponent may argue that some lesser percentage is significant. Arguments that even tiny reductions are somehow significant are disallowed. Ultimately readers will decide if the plan would go a substantial way towards solving the debt problem.

The "debt problem" is continuing expenditures by the US Federal government in excess of revenues.

The importance of taxing the rich will probably be a focus of the presidential campaign this year. This is chance for DDO to get a head start on understanding the issue. I'm looking forward to a good debate.


Debate Rules

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DR. 1. The first round of the debate is for acceptance and for clarification of terms and conditions only. I will provide the specific Pro contentions in R2. Make a comment before accepting if you want a rule change.

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God_Soldier

Con

I misunderstood the challenge, so I'll pass.
Debate Round No. 1
RoyLatham

Pro

The challenge was posted for several days without anyone accepting, so accidentally killing it at this point is not too big a deal. It's time to move on to a new topic. Still, it's important to read challenges carefully before accepting. Questions can be asked in the comments before accepting if something is unclear.

The revenue is at most 3% of the deficit

An optimistic estimate of the revenue generated is

"In 2008, there were 236,883 tax filers reporting income of $1 million or more. The Patriotic Millionaires, a group advocating the repeal of the Bush tax cuts on tax filers making $1 million or more a year, estimated that their plan would raise $500 billion to $600 billion over 10 years." [P2. http://blogs.wsj.com...]

That includes implied savings in interest on the national debt. "the tax would actually raise $40 billion to $50 billion a year: equal to about 3% of the annual federal deficit." [P2]

The revenue would actually be substantially less than the optimistic estimate, because the rich are able to evade taxes by not taking capital gains and by moving money to offshore accounts. There are also complex tax avoidance strategies that flow from the 70,000+ pages of tax laws. [P3 http://www.businessweek.com... ] the goal is to have transactions that do not qualify as income. excluding deductions has no effect on something that is not counted as income in the first place.

The top 3% of earners are already paying 50% of the taxes under the current system.

The revenue raised would be trivial compared to the magnitude of the deficit problem.

The resolution is affirmed.
God_Soldier

Con

God_Soldier forfeited this round.
Debate Round No. 2
RoyLatham

Pro

Con, please enter the word "pass" so we can get this over with.
Debate Round No. 3
RoyLatham

Pro

My opponent had the courtesy to pass when I requested, so I think he shouldn't lose e conduct category.

He obviously didn't argue the topic, so my arguments in R2 stand.

I wish my opponent well in his future debates at DDO -- but with a careful reading of the challenge first!
God_Soldier

Con

God_Soldier forfeited this round.
Debate Round No. 4
51 comments have been posted on this debate. Showing 1 through 10 records.
Posted by RoyLatham 4 years ago
RoyLatham
If anyone would like to debate this topic, let me know and I'll post the challenge directly. The challenge was up long enough so that if an of our regular debaters were going to accept, they would have.

I think that a little reflection reveals that the Buffet Plan cannot be defended on economic grounds. It's a pure election ploy to set up class warfare as a campaign issue.

I'd still like to find some Obama economics topic that liberals will defend.
Posted by LiberalJoe 4 years ago
LiberalJoe
Roy,

Will you please create this debate again? I am not willing to challenge considering I agree with you, but I am curious as to what you and your opponent have to say.
Posted by RoyLatham 4 years ago
RoyLatham
Tax rates on the rich remained very high for decades after the War, around 75% as I recall. I didn't matter too much because then as now there were so many loopholes that few people paid the tax. What's killing everything now is the regulatory environment coupled with all the entitlements. A restaurant owner paid a $220K penalty for having a restroom mirror two inches too high an ADA violation. So do you want to start a new restaurant or collect several years of free unemployment checks?
Posted by baggins 4 years ago
baggins
"At the end of WWII, the government fired en million employees and cut spending by two-thirds and the economy boomed. I think it was the attitude change from being a government-dominated state to being a capitalist state."

During WW2 tax was 90% for very rich. Reducing it naturally spurred growth. Can that be compared to the current situation?
Posted by sherlockmethod 4 years ago
sherlockmethod
Fear isn't a factor in my reluctance to take this debate. I worry that I will not provide the debate that Roy wants to have. He is the instigator, and a good debater, so I don't blame him for narrowing the issue. I am unable to put Obama's tax hikes in a vacuum considering that Roy, per his comments, isn't interested in discussing Obama's full deficit reduction plan. The tax hikes, including but not limited to, the Buffet Rule are hard to separate from the remainder of the plan. I'm glad he formulated this debate so an opponent can't change the subject to "fairness" or larger philosophical issues concerning progressive taxation, and so on. If I could crunch the numbers then I would have happily taken it. What fun is a debate unless your opponent is good?

I see that the current challenger does not meet Roy's qualifications. He/she loses the conduct point at the start. Good luck and I hope you get the debate you want.
Posted by jimtimmy 4 years ago
jimtimmy
People are scared of you Roy.
Posted by RoyLatham 4 years ago
RoyLatham
There are at least two "loopholes" that are impossible to close. One is that capital gains cannot be taxed until they are realized. It's not possible in a practical way to tax the profits on a deal that has not happened, because it is only a potential profit rather than an actual one. It may disappear before it is cashed out. That means gains can be left unrealized. A second one is that money can flee the country and the tax system entirely. In the age of the internet and global economy, money can flee easier than ever before.

There are many others that might might be closed but haven't been. For example, income from tax free government bonds is not counted as income. It's not likely that government would want to scare people away from government bonds.

A larger problem is that if government took all the income from all the rich people it still wouldn't come close to solving he debt problem.

At the end of WWII, the government fired en million employees and cut spending by two-thirds and the economy boomed. I think it was the attitude change from being a government-dominated state to being a capitalist state.
Posted by Wallstreetatheist 4 years ago
Wallstreetatheist
Based on the laffer curve, history, and basic economics, the resolution is affirmed.

It wasn't until taxes, government spending, and New Deal programs were cut that the US started a strong recovery from the great depression in 1946.
Posted by baggins 4 years ago
baggins
I am quite surprised that no one has accepted the debate till now. I am no expert in US economy, yet raising taxes to ~30% without loopholes appears reasonable to me and I am sure it would do more benefit than harm (specially when economy is struggling with lack of demand). Though the question is how much. And how does it compare with the money that can be saved by spending cuts...

Feeling to lazy to do research. In any case, I dare not going to debate US economy with Roy Latham.
Posted by sherlockmethod 4 years ago
sherlockmethod
Obama's speeches have been about increasing taxes through the removal of the Bush era tax cuts and the Buffet Rule and removing loopholes in the tax code that allow corporations to pay lower taxes despite than what is listed. He has addressed all of these. The Buffet Rule is only one part. The White House hasn't talked about numbers on the Buffet Rule alone. By itself the Buffet Rule appears to do very little to reduce the deficit but it may ease cuts in social programs. From the full context of his speeches this what I am gathering concerning the Buffet Rule. I agree that alone, it does little for deficit reduction.
1 votes has been placed for this debate.
Vote Placed by 16kadams 4 years ago
16kadams
RoyLathamGod_SoldierTied
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Total points awarded:10 
Reasons for voting decision: FF