Progressive tax doesn't work
Debate Rounds (5)
I will argue that progressive tax is not fair, nor does it work in the long run.
This debate is not related to any specific country.
Progressive tax - a tax in which the tax rate increases as the taxable amount increases.
The alternative option is flat tax.
Starting from round 2 all rounds are free form meaning statements along with rebuttals.
Anyway, I'll start with my opening statements.
1) Flat tax is more fair. With flat tax people earning more already pay more. Why is it that the hard-working and ambitious have to pay for those who do not do it themselves. We already financially support those who simply cannot work (disabled welfare, pension) and provide tax-free minimum wage in some cases. So in essence progressive tax means distributing money from the wealthy to the less wealthy and that makes no sense. Everyone has an equal chance for success in the world of free trade market.
2) Progressive tax diminishes the incentive to work hard. In other words it removes individual ambition to achieve great things. In the post-industrial society we live in today we need specialists and engineers. Why would anyone bother studying 5 more years at a university only to get your salary cut in half. Even the few people who would carry on working in these areas of expertise would not be doing it to their full potential. As greedy as the human nature is people will only cap out their creative and physical abilities when they get rewarded for it (in most cases, anyway). With progressive tax people would simply stop having the same enthusiasm as before and they would settle with a less paying job. In some extreme cases, by the way, it is possible that a person would give up on a raise because they would make less net income.
As a conclusion of the first 2 subjects I will hypothetically ask "Why do others get to work less, but get roughly the same as me?"
3) It hurts the economy. Firms and people will simply leave the country for elsewhere where the taxes are not that rough. This will not only shift money out of the country but also cause overall job loss. Another thing is tax evasion. This is an actual problem with progressive taxes, corporations practising tax evasion could have huge effects on the economy. Whilst progressive tax might feel Robin Hoodly noble, it does not work in the long run. In other words as long as countries with flat tax exist progressive tax will because the businesses will simply move there. Sustainable progressive tax does not exist and if it did it would be called socialism. I will get to that next.
4) We live in a capitalistic world. Taking resources from one and giving it to others to make it more "equal" is a socialistic principle. However, socialism and capitalism cannot coexist and the reason for that is that people thrive on competition (one of capitalism's main attributes, by the way).
The reason why I didn't use any actual facts is because I already mentioned that this debate is not related to any specific country. My statements are pretty much widespread knowldege. If you want me to back up any of my claims with evidence then let me know.
My opening argument is very simple -- PT is preferable because it maximizes revenue for the government while minimizing financial burden for the tax-payers. The relative impact of a 10% income tax on someone's personal financial situation varies greatly depending on their economic class. For someone earning a $20,000 salary, the missing 2 grand would force them to limit spending on basic utilities like healthcare and transportation; for someone earning $20 million annually, the missing 2 mil. results in having one less custom-designed summer home. Rich people, simply by virtue of having more money to spare, aren't affected *nearly* as heavily by high tax rates as poor people are. PT gets every person to pay the government as much as they can without being significantly inconvenienced, thus maximizing the amount of money the government can spend on public services like criminal justice, national security, infrastructure, education, social programs, and repayment of federal debt. PT is clearly a win-win situation for everyone.
On to rebuttals.
1. As I already noted, FT is *not* fair because, at any given tax rate, the standards of living of poor people are far more deeply impacted than those of rich people. Pro arbitrarily defines "fairness" as everyone having to pay the same numerical tax rate; I can just as easily define it as everyone having to pay as much as they can reasonably afford to, which is essentially what the PT accomplishes. Moreover, taxation is not necessarily just the redistribution of wealth -- a lot of tax revenue goes towards public services (like the ones I have already listed out) which benefit *everyone*.
2. Pro provides no evidence that higher tax rates actually result in a significant reductions in productivity and economic growth. We can dismiss his claims off-hand because the majority of rich people don't actually have to work that hard to earn their money -- they come from already-rich families, and the resulting inter-generational advantages are largely responsible for the size of their fortunes. In fact, in the United States, "even rich kids who do not receive a college degree are 2.5 times more likely to wind up as high-income adults than poor kids who do receive a college degree" . Given that, it is thoroughly implausible that having to sacrifice portions of their wealth is going to result in a significant decline in their economic productivity.
3. Again, Pro provides no evidence that the emigration effect he speaks of actually exists. But more importantly, no one really cares where rich people choose to live -- what actually matters is where their companies' operations are run, since that is what really generates job creation and GDP growth. However, operations location is dependent on factors which actually affect operation costs, like labor/wage laws and corporate tax rates -- it has nothing to do with income taxes.
4. This is an argument against all forms of taxation, including the FT, so I'm not sure why Pro is running it...
Progressive taxation maximizes government revenue while minimizing financial burden on tax-payers, which is literally the ultimate goal of any taxation system. Meanwhile, none of the advantages of flat taxation which Pro presents hold up to scrutiny. The resolution is negated.
And with that, I hand the debate back over to Pro.
I'd like to once again draw your attention to the fact that this debate is NOT related to ANY specific country. We're speaking hypothetically and morally which tax is most preferrable. Most of my statements are common sense but I'll provide some facts throughout this debate on USA as EXAMPLES. I encourage independent thinking more though.
Okay, seems like we reached the point of the filthy rich very soon this time. I can understand that raising the tax for a person earning $20 million a year wouldn't affect them. This idea is completely valid except that you can't run a country only thinking of one group of people. Now the key point is mostly middle-class people. These people pay the most taxes in almost every country, for instance - https://www.cbo.gov....
1) Quoting - "Pro arbitrarily defines "fairness" as everyone having to pay the same numerical tax rate"
Arbitrarily, eh what a hostile word since this is a debate of opinions but alright. Do you consider the poor to be somehow superior to rich people so that they don't have to pay as much taxes? Everyone should be given the same tax amount along with opportunities to generate wealth (which they are). Those who distribute more to the overall economy and work harder/smarter deserve to be rewarded more. If I were a person making middle-class worthy salary I wouldn't consider it my duty to support the lazy solely because we live in the same country. I'm already paying more money numerically so you could ride that bus for free. And I said lazy because I already mentioned pension and disabled welfare.
Anyway, what I consider to be a perfectly fair and prosperous society is where every group of people pay the same amount of total tax by percentage. For example - the 20% of working class pays the same amount of % total taxes as the 1% of the very rich. By implementing PT you would steepen the differential even further so that the rich have to pay almost all the taxes. Yes, perhaps they can afford it but why should they? They've earnt their salaries and therefore deserve the enjoy the fruit of their success.
Obviously tax's purpose is not to distribute wealth but that's what PT still does. It's simply inevitable "collateral damage" that it brings along.
2) Nitpicking my argument by saying I have no evidence to back up my claims that are supposed to be common sense.
Nevertheless, let me make a very simple example of how PT diminishes the value of labour.
Tom and Sally are picking apples. Tom picks 50 apples an hour whilst sally only gets 30.
10% FT - Tom loses 5 apples and is left with 45 apples per hour. He gets paid 45" as 1" per apple.
Sally loses 3 apples and receives 27" per hour.
PT - Tom loses 10 apples and receives 40" per hour.
Sally gets the regular 27" per hour since her (income) wasn't affected.
10% FT - 2 hours of work for both generate 72 apples or ".
PT - 2 hours of work generate 67 apples or ".
Very simple, yet very realistic and actual.
It doesn't matter how the rich people received their wealth. If they got it from their parents then yes that'sa bit unfair but you can't control where you're born, can you? Fact is, the wealth didn't come out of thin air, a father or an ancestor even had to work for it. And quite frankly it doesn't matter if you work harder or smarter, what matters is how much work you get done and that's what you get paid for. Do you think it's unjust for people to pass on money between generations?
3) Again it's common sense that companies would rather operate in a country where they would have to pay less taxes.
Saying that nobody cares where the rich people choose to live is not correct.
For instance in USA 41% of all taxes come from income taxes. https://en.wikipedia.org...
This includes every rich person with all their profits they decide to take out from their companies.
Also this doesn't concern only rich people. Companies don't make their profits from thin air, all the regular people use their products/services. All of capitalistic economy is simply put a two way street of people exchanging resources.
4) Well then, saying that every form of taxation is socialistic is VERY far fetched. Socialism means taking from one and giving to other to make equal (what PT does). With taxation (FT) you take from all and use together. And incidentally the consequnce I just provided for taxation is not even the purpose of it. The purpose of taxation is actually to run a well oiled society and country.
Currently no people are being discriminated against so that they would deserve to pay less taxes. We all have equal rights and opportunities for success. It is true that some people are more capable than others and I believe that is natural selection but that's too deep in another topic.
Once again, I want to encourage Con to view this debate from a more hypothetical point of view instead of slamming and asking for facts. Some things are simply common sense and it would be a shame for this debate to break down on pedantics. If you're concerned that without hard evicence you will lose then I am willing to forfeit in the sake of an intellectual discussion.
Good luck on round 3
== Con Case ==
Pro's only objection to my case is that my analysis leaves out members of the middle class. However, the same rule applies to them as well -- at any given flat tax rate, wealthier people are impacted less heavily than poorer people. For someone earning a $100,000 salary, a 10% tax rate would likely result in having to forego some basic luxury goods (e.g. a new car, expensive vacations, etc) -- in accordance with the rule, this is far less than the impact on someone earning $20,000 (i.e. having to cut down spending on basic utilities), yet still more than the impact on someone earning $20 million (i.e. having to sacrifice completely superfluous luxury goods). Nothing Pro said has really contested the crux of my argument. PT maximizes government revenue while minimizing financial burden on tax-payers, which is more or less the ideal for any system of taxation. On the other hand, depending on what the flat tax rate is, FT must either severely restrict government revenue (with a low rate) or over-burden the poor (with a high rate). PT is clearly preferable to FT. The resolution is negated.
== Pro Case ==
1. Pro attempts to justify his criterion for fairness by saying that rich people are rich because they're hard-workers and poor people are poor because they're lazy, and therefore the differential in relative impact from a flat tax rate is *deserved*. However, this is a very flawed view of reality; in actuality, poverty is often the result of socioeconomic factors which are out of poor people's control, such as a lack of education opportunities, cultural discrimination, negative societal pressure, overpopulation structural unemployment . It is utterly mistaken to think that poor people are poor because they're "lazy". On the other hand, as I already said, most rich people aren't rich because of hard work -- they are rich due to the inter-generational advantages of being raised in a rich family. Even in America (the supposed 'land of opportunity'), a rich person who hasn't gone to college is still *2.5 times* more likely to end up rich than a poor person who did make the effort to go to college. The takeaway from all this is that economic class is generally based in arbitrary factors such as birthplace; thus is no "fairness" in taxing everyone at the same rate. PT is preferable for the pragmatic reasons I explained in the Con case.
2. Pro's example regarding apples ignores one crucial factor -- money that goes to the government in the form of taxes doesn't permanently stay out of the economy. It comes back to us in the form of public services which benefit everyone. That money would accomplish much less in the hands of the rich, and Pro has yet to provide any evidence to the contrary.
3. Pro says " it's common sense that companies would rather operate in a country where they would have to pay less taxes." And I agree. However, corporate taxes are distinct from income taxes, which is what the PT/FT debate concerns, and therefore that argument is irrelevant. Moreover, Pro still hasn't shown that rich people move out of the country as a result of high tax rates. His assertions that this is common sense are false... I've already established that taxes don't impact them much, so it's prima facie absurd to believe that to be sufficient motivation for a rich person to permanently leave their country.
4. This argument makes no sense... all the money from FT would still be going towards the same purposes as the money from PT, and many of those purposes aren't even redistributive in nature. Nothing Pro has said here is true.
My case has been upheld, and Pro's has been refuted.
The resolution is negated.
1) Rich people are hard workers. As I've stated this many times before wealth doesn't come out of thin air. Of course it's simple to collect the revenue of your automated businesses for example and no hard work at all but how do you think these businesses managed to succeed? All major corporations used to be small businesses that would require hard work back in the day. Your idea of rich people seems to be that they're already born rich and that's not true as I'll prove in a second.
Educational opportunities - Self-contradicts your own example of how college doesn't even matter when measuring the likelihood of becoming rich. Make up you mind, is it education or initial capital that plays a role in success?
Cultural discrimination - This debate is not related to any specific country, we're talking about a society where everyone is given the same opportunities. And in reality to very large extent they are, it's up to the people themselves to use them. Are you stating that some people are being denied work/education because of their cultural difference?
Negative societal pressure - Society that pressures you to not work hard? I don't quite understand what this is supposed to mean.
Overpopulation structural unemployment - Unemployment is an inevitable economic problem with both FT and PT. In fact, PT would introduce even more job loss due to businesses moving out because of enormous taxes (I'll also clarify that). It is somewhat a point in your favour that poor people aren't always lazy (and they aren't) but this doesn't give PT an advantage. Dole exists for a reason.
Poor people aren't always lazy, they can also be unintelligent or unambitious by nature. Fact is that they distribute to the economy less than others. I ask you again, should a hard-working person consider it his duty to support someone who doesn't solely because they live in the same country?
Your statement that wealth is decided on birth and is directly related to birthplace is true to a very insignificant extent. Most rich people are actually nouveau riche and they work A LOT. Simple businessmen who attend meeting to meeting on a daily basis. How many people do you imagine have the amount of wealth to ride a yacht every day whilst funding the whole life of their child? Few enough to make them irrelevant in this discussion.
Anyway, my definition of fairness persists. The value of labour should be static to every person in the country. It is not fair that people have to pay different amount of taxes depending on their paycheques. Taxation is a civil commitment and all citizens should have equal civil rights (including commitments). With PT you're literally dividing people into groups of people - those who have to give more away from their paycheque and those who have to give less. It's not fair that 10% of people pay 75% of a country's base tax "because they can afford to".
2) The money that goes to the government and the way it is used is irrelevant to this subject. PT diminishes value of labour and Con failed to prove otherwise.
3) Well, theoretically it is possible to set a progressive corporate tax and I haven't said that this debate concerns specifically income tax but alright, let's stick with only income tax for now.
Now, these two are still indirectly connected. The way this works is corporate revenues. You can reinvest the profit in the business or you can take it out. The ones who take it out are actually high-end individuals who, by the way, pay income taxes as well. If the owner suffers due to large income taxes then so does the business. Losing business can mean bankruptcy or laying off employees. Either way it results in job loss and macro level economic loss in the long run.
How have I not proved that rich people move out due to high tax rates? It was clearly in the source I gave you. A line from that article - "California has lost billions of dollars in revenue in recent years as businesses and residents flee the state, in part because other states have a more favorable business climate."
And again, this is merely an example of what is happening or is going to happen elsewhere. It's not absurd at all that a high tax rate is a sufficient motivator to leave a country. Leaving the country isn't also the only option to be a tax exile. Tax evasion is another problem PT brings along. Long story short, the more you increase tax the more people will avoid taxation. The "laffer curve" is a nice little theory of this.
4) Is it not true that with PT the wealthier will make less income whilst the poorer make more? In other words, the money will indirectly distribute so that all the people have a more equal income. Is that not a socialistic ideal? Moreover, you yourself said that the money would still be going towards the same purposes which proves my point even more that the wealth is being transferred strictly between individuals and not from individuals to the country's budget. It is incredibly naive to think that PT's purpose or its effect isn't distributing money by reason of equality.
I'm hoping Con puts a little more time and thought into the 4th round. Also I think it would be respectable to leave the matter of what is conclusively refuted and what not to the voter.
Nevertheless, good luck on round 4
Pro refuses to keep this organized, so I'm just going to refute each point he brings up individually.
Apologies in advance to the voters. This is not going to be a fun read.
Also, to hell with 5 round debates.
Re: Lower-Class Minority?
Pro seems to be arguing that the lower class is technically the minority and therefore its interests don't matter, which is ridiculous. Depending on what criterion you use, the US's lower class makes up between 25% of 40% of its population . This is a substantial portion of the population, and as I've explained numerous times now, they are impacted much more heavily by taxes than both the middle and upper classes combined (since tax burden forces them to cut down spending on necessities rather than on mere luxury goods). Any basic understanding of utilitarian calculations reveals that that sheer numbers are not everything -- the differential in marginal utility must also be taken into account, and when we do, it is clear that FT produces more aggregate negative utility by over-burdening the poor. Prefer PT.
Re: "Rich people are hard workers"
Pro completely ignores my evidence that most rich peoples are wealthy as a result of being born into a rich family, instead just asserting that "wealth doesn't come out of thin air". Obviously, they do work, but they certainly do not work any harder than poor people do; in fact, they arguably have it much easier, since low-wage jobs tend to be far more mentally and physically taxing . Thus, the PT does not "punish hard work".
Re: Why the Poor are Poor
>> Educational Opportunities
I said that education level does not make a significant difference in the attainment of *high-income* status (due to the primacy of intergenerational advantages in that respect). Education is still very useful for getting out of poverty and even in reaching middle-income status. Because poor people often lack access to educational opportunities, they cannot be blamed for their low-income status.
>> Cultural Discrimination
Cultural discrimination exists to some extent in literally every society, and my source shows that it plays a significant role in the inhibition of poor people's ability to achieve upwards social mobility. This outweighs Pro's bare assertions.
>> Negative Societal Pressure
I am referring to societal pressure to engage in activities which are not conducive to economic productivity (i.e. drugs, prostitution, etc)
>> Overpopulation & Structural Unemployment
Pro misses the point... I never said PT solves for unemployment. The sole purpose of me bringing all these factors up was to debunk Pro's absurd claims that poor people are poor because they're lazy. All five of them have been upheld, and thus we can safely reject that notion -- the majority of poor people are poor because of circumstances which are outside of their control, and therefore they do not "deserve" the excessively heavy tax burdens imposed on them by FT.
Bare assertions and nothing more. I can easily modify everything Pro said here to fit my subjective conception of fairness and it will have the same effect:
Pro: "Anyway, my definition of fairness persists. The value of labour should be static to every person in the country. It is not fair that people have to pay different amount of taxes depending on their paycheques. Taxation is a civil commitment and all citizens should have equal civil rights (including commitments). With PT you're literally dividing people into groups of people - those who have to give more away from their paycheque and those who have to give less. It's not fair that 10% of people pay 75% of a country's base tax 'because they can afford to'"
Con: "Anyway, my definition of fairness persists. Tax rates should be proportional to how much every person in the country can afford to pay. It is not fair that people have to pay the same taxes rates despite the huge differential in relative impact on their personal financial situations. Taxation is a civil commitment and all citizens should contribute as much as they reasonably can. With FT you're literally dividing people into groups of people - those who are over-burdened by their taxes, and those who are not. It's not fair that the poor have to shoulder a much higher relative burden than everyone else 'because the rich work hard'"
Fairness is subjective and irrelevant to this debate. Prefer my pragmatic approach to the topic -- PT is superior to FT because it maximizes government revenue while minimizing financial burden on the tax-payers.
Re: Diminishing Labor Value
Pro does not contest that tax-funded public services easily outweigh the "diminished value of labor". Treat this as a concession.
Re: Income Tax & Corporations
"If the owner suffers due to large income taxes then so does the business". This is a bare assertion. A person is not going to stop investing into his business just because of higher income tax rates...
Re: California Evidence
Sorry, I missed this last time. Firstly, the majority of the article focuses on the harms of *businesses* moving out of the state, which implicates corporate taxes, rather than income taxes. Secondly, the fact that people would move out of their state does not mean that people would move out their country -- people tend to feel attachment to their country of residence for various social and emotional reasons. There are numerous countries with high standards of living which have *much* lower income taxes than the US , so we would expect to see large amounts of emigration to those countries if Pro's theory was true; the fact that this interstate migration was the best example Pro could find just serves to prove my point my point -- PT is not detrimental to the country's economy as a whole.
Re: Tax Evasion
Economists have calculated that the optimal tax rate (i.e. the highest the tax rate can go before tax evasion starts becoming a real problem) is anywhere between 50-80%, which means that even the country with the highest tax rate in the world (57%) could afford to increase it -- "Using elasticity estimates from the empirical literature, the formula for asymptotic top rates suggests that marginal rates for labour income should not be lower than 50% and may be as high as 80%" .
My response seems to completely go over Pro's head. The "purpose" of the FT and PT are both the same -- to provide the government with money to carry out its functions. The only difference is in how that money is obtained, and just because you're taking a larger proportion from the rich than from the poor doesn't make it "socialistic" in any sense of the word. Pro doesn't even have an argument here.
I don't appreciate Pro's accusations that I have not put enough "time and thought" into this. Just to spite him, I have written up this round in about 20 minutes. Frankly, he should learn the ins and outs of debate before trying to lecture me on them -- citing sources to back up empirical statements, fully warranting normative claims, and telling the voters what to think are all expected behaviors in most debate settings, and are actually quite necessary in order to win.
All of the points of contention I've addressed either have null impact or go in my favor.
The resolution is negated.
Sorry for my aggressive tone last round.
1 votes has been placed for this debate.
Vote Placed by lannan13 1 year ago
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Reasons for voting decision: Concession R4.
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