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Replacing the Current Tax Code With A National Sales Tax Will Reboot the American Economy

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Voting Style: Open Point System: Select Winner
Started: 9/1/2015 Category: Politics
Updated: 2 years ago Status: Post Voting Period
Viewed: 939 times Debate No: 79265
Debate Rounds (5)
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The complexity of the current United States tax code and the current tax rates place an excessive tax burden on almost everyone from the individual taxpayers and small businesses to billionaires and large corporations. The excessive tax burden robs the consumer of purchasing power and businesses of capital that could be used to expand their operations. For the sake of narrowing the debate, I will focus my opening statement on how the current tax code affects individual taxpayers (families, students, etc.) and how replacing the current tax code with a national sales tax will empower them to play their roles in rebooting the American economy. The income tax data that I use will come from ( and covers the 2014 tax year.

In the 2014 tax rate schedule, I have identified three income groups for unmarried taxpayers and two groups for married taxpayers with a total household income. I will examine each in turn, beginning with unmarried taxpayers.

The first group that I have identified are taxpayers who earned between $9,075 and $36,900 in 2014. These taxpayers are students who are trying to work and go to college at the same time, new college graduates who have taken entry level jobs to gain experience and pay off their student loans, and lower blue-collared laborers. The marginal federal income tax rate for this bracket is 15%. Therefore, a taxpayer in this category making $20,000 per year will need to pay $3000 in federal income taxes. After factoring the cost of living expenses, a person in this tax bracket is left with very little discretionary income, which will limit their upward mobility in the market.

The second group that I identified were the taxpayers who fell between $36,900 and $89,350 in income. The people who fall into this category can be small businessmen, middle class professionals such as accountants, teachers, etc., and middle class blue collar laborers such as plumbers and electricians. The marginal federal income tax rate for this bracket is 25%. Consequently, a taxpayer who earns $65,000 per year will pay $16,250 in taxes.

Finally, the third group that I identified were the taxpayers who fell between $89,350 and $186,350 in total income. These people include the lawyers, the doctors, and the tech experts who provide the services that make our lives function so smoothly. They will pay a marginal federal income tax rate of 28%. Someone who makes $100,000 per year will pay $28,000 in federal income taxes.

In summary, the three examples I used will pay $3000, $16000, and $28000 respectively in federal income taxes. However, what if we replaced every federal tax with a simple 13% national sales tax and compared it solely against the results of the study on the income tax (ignores other taxes levied by the federal government). Assuming that the taxpayer spends every dime that they earn, the three examples I used would pay $2600, $8450, and $13000 in federal taxes for 2014. However, most individuals don't spend every dime they earn so the actual tax burdens would be on the lower end of these numbers.

What effect would a national sales tax of 13% have on the economy? Consumerism drives the American economy. With more money to spend, the American consumer would be able to afford more. Many individuals would save their money to make purchases that they wouldn't have dreamed of under the current income tax structure. The subsequent rush to buy would spark an economic revolution in the American economy. Prices would drop as people demanded a larger quantity of goods and services. Businesses would expand to meet the greater consumer demand and would create more jobs. Consequently, everyone's standard of living would be improved.

Afternote: This is my first debate on here. I look forward to hearing the arguments that my opponent will present. I greet him/her in advance and wish them good luck.


Note: This is my first debate as well. If any veteran folks see any errors in my argumentation, please help me out post debate. Other than that I look forward to this debate!

The National Sales Tax or the "Fair" Tax would be problematic for many reasons. For one a 13 % tax on all American citizens would be good... for the wealthy, if that were to take place you would only be widening income inequality; making the rich richer while the poor get poorer. Also even if we overcome the huge income inequality that would take place, the government would have trouble spending as they do now, due to the lower tax revenue, (which is 2.5 trillion dollars now, it was 3.5 trillion, but the Bush Tax Cuts lead to a loss of 1 trillion in revenue) budget cuts will take place worsening our military expenditure, NASA budgets, and much much more, this may lead to the government laying off federal workers worsening our unemployment rate and inching closer to an economic bust, which would most likely take place if such a tax (13%) occurred. And before you even say the lost taxes on income brackets would be made up by consumerism/retail tax, this would also fail. The taxes on products would be raised significantly, and I'm assuming a 13 percent tax would flop miserably or not pass in congress, so a 23% tax would be more practical. People wouldn't go out and buy as much as you would of probably hope they would. If people don't buy like there's no end, our consumer based economy would plummet. Also you assume that a drop in taxes would spark an economic boom, with consumers rushing to stores with all their new found money, this would not be the case. Like I said earlier, taxes on products would be raised by a large margin causing consumers to avoid spending as much. There is much more dilemma with your proposed tax cut, but I feel like I got a point through.

In summary, a national sales tax would hurt government spending; in turn, causing federal layoffs and raised taxes on consumables. If they took the course of raising taxes on products (or more debt annually which can be a temporary solution for lost revenue) american consumers would be less inclined to go on a buying spree. If this takes place, there could be a potential for an economic bust, thanks to a loss in consumerism. (but don't worry Walmart will hire everyone)

Debate Round No. 1


I would like to thank Rezamee for the points he/she raised. I feel that he/she has strayed somewhat from the focus of the question, but I shall do my best to rebut the positions that Rezamee laid out in the first round.

Rezamee states the following: "For one a 13 % tax on all American citizens would be good... for the wealthy, if that were to take place you would only be widening income inequality; making the rich richer while the poor get poorer" (Rezamee, Round 1, Paragraph 2). Frankly, outside of total wealth distribution, it is impossible for the government to affect income inequality directly. Income inequality is caused by market conditions, which may or may not be directly affected by government policy. Instead, government"s responsibility within an economy is to create a stable economic environment where everyone has a fair chance to improve their economic situation. How does this concept relate to tax policy?

There should be one tax policy (rate) that applies to everyone. While a policy that might be good or tolerable for the rich is most often not good or tolerable for the poor, a policy that is good or tolerable for the poor is almost always good or tolerable for the rich. For the purposes of the tax policy, the logic behind it is simple. The poor will not have to pay as much to the government under a national sales tax as they do under the current progressive income tax code. I think Rezamee was trying to say that it is not fair that the rich should pay the same percentage of taxes as the poor should. However, there is one important fact that should be noted. Use the following example: A person who spends $100,000 per year will pay $13,000 in total sales tax while a person who spends $20,000 per year will pay $2600 in total sales tax. They are paying the same percentage of taxes but the rich person is paying $10,400 more in taxes than the poor person is.
Rezamee also mistakenly misinterpreted my position in the following quote: "Like I said earlier, taxes on products would be raised by a large margin causing consumers to avoid spending as much" (Rezamee, Round 1, Paragraph 2). The title of the debate begins with "Replacing the Current Tax Code"", meaning that there won"t be another federal tax levied besides the national sales tax. There would be no other taxes that the federal government could raise. The single tax would create a simple, stable tax policy that would enable consumers to boost the economy through increased sales activity.

I would also like to touch briefly on the point that Rezamee made regarding budget cuts. This point strayed from the topic somewhat as the debate is supposed to be on the economic effect of a national sales tax and not on budgetary policy. However, the new tax policy does provide budgetary help. According to The Heritage Foundation, federal spending was $3.5 trillion in 2014 and its revenues were about $3 trillion ( Furthermore, the Congressional Budget Office estimated that the federal government spent almost a trillion dollars in subsidies in 2014. The majority of these subsidies were tax subsidies. Eliminate every government subsidy and you will adequately compensate for the short term drop in federal revenue. The resulting market expansion will increase revenue in the long term.

A national sales tax would definitely require some work to get it properly implemented in terms of the federal budget. However, it would stabilize the American economy and provide potential for extraordinary growth.


I would like to note that the title displays "Replacing the Current Tax Code With A National Sales Tax Will Reboot the American Economy". In your third paragraph (round 2) you tried to clear up my "stray" off topic, it isn't off topic, your question clearly states that the tax code will affect the economy; therefore, my claims on how the tax code will affect budget, and prices are justifiable due to chain events. Throwing that aside, I wish you luck again!

Economy: An economy or economic system consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location. The economic agents can be individuals, businesses, organizations, or governments. (hence distribution and consumption)

National Sales Tax: The idea is to tear up the federal income tax system, scrap it for good, and replace it with a national sales tax. Here's how it would work, and why every citizen ought to give it serious thought. The individual and corporate income tax, the capital gains tax, and the estate and gift taxes would all be eliminated. (Hence government revenue would be hindered due to elimination of certain taxes)

C1: You state that the government can't affect income inequality, this is completely absurd. It's quite simple, with the current tax code, rich people create less capitol than with the NST (National Sales Tax), while a person on the bottom of the chain could save around 400 dollars if an 13% NST took place. It's quite obvious to see the income inequality, rich people would save thousands upon thousands while your average minimum wage worker would save 400 dollars. In summary, the gap would be even larger and tax revenues would shrink.

C2: (counter to Cameron P3, R2) I hope you know that a National Sales Tax has never been used among any nation-state on the planet and it's for good reason. One the income inequality would be immense with any rate, if it's too low the rich are heavily favored and can save upwards of 50,000 dollars, too high and minimum wage workers are living under the poverty line, a reasonable person wouldn't want either. Two, the government would be in a budget crisis, in turn, they might take more loans.. not good and your idea of reducing government( Cameron, Third Paragraph Round 2) spending even further is effectively ludicrous, our government needs the money it gets and cutting the budget would just make our state on the planet worse (less military spending, less space exploration, less federal workers). Just to remind you, this does correlate to the tax code, a NST would be detrimental to government stature and will cause the unemployment of federal workers which can be linked to families/students.

C3: (counter to Cameron P2, R2) Unless you do not fully understand what a NST is I provided a definition of it higher up on my argument. You state "The title of the debate begins with "Replacing the Current Tax Code"", meaning that there won"t be another federal tax levied besides the national sales tax. There would be no other taxes that the federal government could raise. The single tax would create a simple, stable tax policy that would enable consumers to boost the economy through increased sales activity." This is completely untrue a National Sales Tax will bring changes to other taxing methods. For one, if the federal government wants to make up the lost tax revenue they would, due to it being the most logical, raise the taxes on consumer goods, this is a widely accepted fact about the NST theory. Another thing you mentioned "Use the following example: A person who spends $100,000 per year will pay $13,000 in total sales tax while a person who spends $20,000 per year will pay $2600 in total sales tax. They are paying the same percentage of taxes but the rich person is paying $10,400 more in taxes than the poor person is." This is undoubtedly true; however, it only proves that the income of wealthy folks would be significantly higher due to them originally (with the income tax) paying 50 k plus! Thus proving my point that the income gap between rich and poor would be even higher.

Some points I would like to add, a 13% tax is preposterous and no member of congress would ever vote to pass a bill containing such a rate, the 23% tax rate has seen light in a bill and would more likely pass in congress. Also you fail to realize that a National Sales Tax wont apply to all transactions making it more of a burden than an omnipotent solution. For example, a NST will only be applied to business to household purchases, there wont be taxes on business to business purchases.

I would like to mention that a sales tax will create capitol for the average consumer, but this comes with a cost. One companies can dodge out of this, two it will create vast income inequality with the rich getting richer while the poor get poorer, three the government is too big for it to take any budget hits now; especially with the rise of China and other powers we need our government to do the best it can.
Debate Round No. 2


I would like to begin this round by respond to three counters that Rezamee made in the previous round. For counter C1, government cannot affect income inequality unless it started to change the American economy to full blown communism. Market forces determine how much people earn in terms of their income. In this case, market forces are the demand for skilled labor (i.e., college educated professionals) and cost of services rendered. By taxing the rich more, the government is not affecting income inequality because it is not changing the income that rich people earn as the result of market forces. Higher taxation essentially represents a futile government attempt to curb market forces. Since tax rates are an economic condition, the market will adjust so that rich people make enough money that their after-tax income represents their true value in the market. In finishing my rebuttal to this counter, government taxation should not be used as a means to keep anyone from earning more after-tax income than someone else. The tax code should create an environment where everyone can improve their position in the market regardless of their income. Four hundred dollars might seem like a miniscule amount to a rich person; however, to a middle class worker or family, the 400 dollars they would save is a bonanza that would enable them to improve their economic condition. If government was truly interested in helping people, it should not try to affect the income inequality gap, but create a tax code where everyone could keep more of their earnings.

In response to counter C2, there would be no budget crisis. As I pointed out in Round 2, Paragraph 4, the CBO estimates that federal subsidies cost the government a trillion dollars each year. About 90% of these subsidies are tax credits. Consequently, they would be eliminated under the abolishment of the current tax code. This would pretty much offset the effects of the new tax code. If more budget cuts were needed, Congress could look at eliminating duplicate programs, which the CBO estimates cost us about $400 billion per year. Further cuts could be made to Medicare or Medicaid as those programs have essentially been replaced by the Affordable Care Act, but this should be a last resort. Defense spending and federal works as a whole would be largely untouched by these cuts.

In response to counter C3, you said the following: "Also you fail to realize that a National Sales Tax wont apply to all transactions making it more of a burden than an omnipotent solution. For example, a NST will only be applied to business to household purchases, there won"t be taxes on business to business purchases" (Rezamee, Round 2, Paragraph 7). A true National Sales tax will do the same thing that every new tax law does. It will affect accounting principles. Accountants will be required to report business to business purchases as sales even if they were not retail transactions. Consequently, every exchange of goods or services for currency would be viewed as a sales transaction. In this manner, the National Sales tax would both make up for the government"s lost revenue and ensure that consumers do not bear the brunt of the tax.

However, how does this affect the price of goods? By abolishing the corporate income tax and the other taxes that apply to business, these organizations essentially become consumers in the market. The initial reaction of the market will result in a slight price increase. However, businesses will find that their costs are less and prices will quickly sink back or below their original levels. The money that organizations save from the corporate income tax will amply cover the sales tax on their business to business transactions and the more stable tax system will encourage stakeholders to invest more to expand their organizations.

I would like to thank you again for another interesting round. You are definitely making me think my position through more than I ever have before. I look forward to hearing your response.


I would like to mention you failed to reply to the fact that the National Sales Tax has not been applied to an national level in any nation state. I just wanted to remind you and others.

C1 R3: You misunderstood my interpretation of income inequality, I'll rephrase it for you, if the National Sales Tax were to take place there would be an astronomical wealth inequality, this, the government can effect. Why is this a harm? It is a harm due to the fact that the rich already make a large sum of money, and if they made more this would only lead to a creation of a false democracy. The elite will have more money to lobby our politics and corrupt our politicians. You state "Four hundred dollars might seem like a minuscule amount to a rich person; however, to a middle class worker or family, the 400 dollars they would save is a bonanza that would enable them to improve their economic condition" this is horrifically wrong in so many ways. One, 400 dollars is a big save to a MIDDLE class family or person? HA! This is nothing for a middle class family, I know this, because I come from a middle class family! Two, an average middle class family wouldn't save 400 dollars, they would save almost none. Three, it is the minimum wage worker that will save 400 dollars, not the middle class family or person. Don't forget, the rich will save upwards of 50k if they have an income of 100k or higher. That right there, displays wealth inequality.

C2 R3: The Affordable Care Act or ObamaCare does not replace Medicare or Medicaid, the ACA takes money directly from its users while the Medicare and Medicaid programs are basically free. When I say free, once you hit the age you start using social security, at the same time you will be using medicare/medicaid, the government will simply deduct the cost of medicare from your social security benefit each month. Where is your source for CBO "saying" that the government spent a trillion in federal subsidies? What duplicate programs will congress just eliminate like the programs were nothing? Everything the federal government spends money on has a purpose you know. Your statement on how defense spending will be untouched is wrong, if anything is to go first, it would be defense spending. When the Obama administration took office, they cut a total of 120 billion dollars from military funding in under 4 years. Now imagine what the would do if they had to deal with a huge reduction in tax income.

C3 R3: My opponent also states that a "true" National Sales Tax will be able to dodge the fact that business to business sales will not be incorporated into the tax. This is false. Reason being? My opponent is going beyond the realm of the debate and is fabricating a fake NST, this is a topicality issue, you can not imply that there is a "true" National Sales Tax. We are talking about the National Sales Tax that was written on a bill in 1999, and that National Sales tax says nothing of how it will be able to tax business to business purchases. Furthermore, a National Sales Tax will eliminate many taxes, as seen in the definition of the National Sales Tax (Rezamee R2). I hope you have an answer on to how these taxes will be replaced, without significantly hurting the government's budget or rupturing the economy.

C4 R3: Pro has explained a drop in prices if the corporate tax would be eliminated by the National Sales Tax. This is simply not the case. I don't know if you know this or not, but most major corporations find huge tax loopholes letting them not pay a dime. For example CBS corp has a net income of 1.8 billion, and they pay ZERO taxes. You know what this means if you were to implement the NST, there would be no significant difference in prices rendering your theory dull.

The government will still lose huge amounts of revenue from the removal of the income tax. Primarily due to the wealthy (100k to 500k a year, not the people in the millions of dollars of income. They dodge taxes through loopholes.) paying the brunt of the taxes according to the Pew Research Center, so if they were to start paying less, the government will be in a huge problem. There will still be a giant wealth inequality dilemma, also corporate already pays zero taxes, so do millionaires and billionaires making the tax break on them completely useless. You'll only be justifying lawbreakers with the idea of no taxes on corporate. Not only that, but the lower middle class will be heavily burdened by a flat tax of 23%, especially the single people, which accounts for 50% of the american population. Also you never mention how a 13 percent tax rate will be applicable without severe consequences, it was never even proposed to be a 13% rate. Prices might go up and down due to a fluctuating consumer demand, which primarily consists of people below 100k in income. That isn't healthy for a market and may lead to an economic bust.

Debate Round No. 3


As Rezamee mentioned in the last round, I omitted to reply to his point that no nation had ever imposed a national sales tax. That is largely true although several nations such as Iceland, Norway, and South Africa attempted to implement a national retail sales tax. No nation currently maintains a national sales tax today. However, many European countries levy a Value Added Tax, which is similar to what I am proposing ( It also is interesting to note that several states impose sales taxes (i.e., Tennessee). According to the original intent of the Founding Fathers, the states were supposed to be laboratories of experiment for ideas that could be employed at the national level. Consequently, it would be reasonable to look at states like Tennessee in the debate on the national sales tax.

In Counter 1, Round 3, Rezamee speaks of income inequality again. In developing a tax code, our goal should not be minimizing the income inequality gap. Our goal must be to ensure that every taxpayer keeps more of their earnings. While I do not exactly know the economic circumstances of Rezamee"s family, I do come from a lower middle class family myself. Four hundred dollars was a lot of money to us. It meant the difference between having enough money to save more toward larger purchases, provide extra health care for the family, or treat our family to a brief vacation. As a working American now, it takes me a whole week of hard work to earn four hundred dollars. Four hundred dollars for me now would help ease some of my expenses such as new clothes for work or school and putting gas in my car (I ride my bike to work for six months each year).

In Counter 2, Round 3, Rezamee asks for my source for the CBO reporting that the government spends a trillion in federal subsidies. Here it is ( This report examines the subsidies from 2012. Since then, government subsidies have only increased ( Finally, if Congress cuts defense spending, its members are not upholding their basic responsibilities under the Constitution. Domestic spending must be the first area that is addressed in making budgetary cuts.

In Counter 3, Round 3, Rezamee accuses me of fabricating a fake National Sales Tax. I did not fabricate a national sales tax to fit the context of the debate. I specifically stated national sales tax. In his counter to my position, Rezamee mistakenly thought that the national sales tax would be limited solely to retailers that sold directly to the consumer. However, if a national sales tax is considered properly, it will create the cascading phenomenon ( Cascading means that inputs will be taxed as well as outputs. Consequently, business to business transactions will be taxed under a properly designed national sales tax. The reason for implementing a national sales tax instead of a value added tax (VAT) is to achieve exactly this result.

Rezamee also challenges me to provide a way to replace lost tax revenue without significantly hurting the government"s budget or the economy. After much thought, I believe that I have come up with a solution. As I said at the top of my post, the Founding Father intended the states to be laboratories of experiment for policies that could be employed at the national level. Tennessee levies a 6% tax on interest and dividends in addition to its sales tax ( Employing a similar system at the national level would help diminish the income inequality gap that Rezamee has pointed out as well as make up some of the government"s lost revenue. I acknowledge the importance of this issue, but I do not think that it should be used to stop the implementation of a national sales tax.

I am running out of time so I must politely request that Rezamee grant me until the next round to respond to Counter 4 in Round Three. Thank you for another interesting round and I look forward to another interesting round.


Wealth Inequality: Wealth inequality in the United States (also known as the wealth gap) refers to the unequal distribution of assets among residents of the United States. Wealth includes the values of homes, automobiles, personal valuables, businesses, savings, and investments. (Hence very different from income inequality)

C1 R4: No nation has ever implemented a National Sales Tax and no nation will for years to come. The VAT barely resembles the NST, but that does not mean it is the equivalent. According to an article from Economy Watch, their team stated "A Sales Tax, as compared to VAT is the percentage of revenue imposed on the retail sale of goods. Unlike VAT, sales tax is levied on the total value of goods and services purchased.". Not only that but VAT doesn't change the income tax policy in anyway: furthermore, VAT completely avoids tax evasions while the Sales Tax can be avoided via internet purchases. Also the founding fathers did intend states to be little experiments to see which survived better than others, but not every experiment will have good results.

C2 R4: Ok I did not speak of INCOME inequality (Rezamee R3), I was implying WEALTH inequality, both inequalities are completely different and I am right on both of them. For one, there is an a income inequality that can take place with a NST even though the government isn't directly affecting the income of the persons career itself. How? Well it is called capitol, which can be considered a type of income, especially in the world of saving and investing, well-off individuals will bring in more capitol, while poor and middle class citizens on the other hand... not so much. Also I will try not to offend, but I will assume you are working a near minimum wage job due to your statement on your income per week (Cameron R4). 400 dollars is how much you will save on the lower end of the tree, while middle class families/individuals will save almost none and they will be burdened to pay more on consumables. Now back to wealth inequality, this would rise considerable and may jeopardize the economy for the poor and middle classes. How you may ask? If the National Sales Tax were to occur, the rich would make a considerably larger amount of capitol, causing businesses to raise prices as they see more wealthy individuals having upwards of an extra 50,000 dollars in their pockets. And when I say 'businesses' I do not mean all businesses, just the ones that sell more high end products (Cars, Televisions, Real Estate) that can still be viable for a middle income person, if they work hard enough for it. These companies would raise prices so they could fabricate more revenue for the company, I mean come on, it is how business works, selling to rich people sure makes a lot more money than selling to middle or poor income peoples.

C3 R4: Your source explains that the sole goal is to promote economic stability and welfare through Federal Subsidies. This is not the entirety of federal spending. And your solution for a budget deficit (if NST occurred) is to cut budgets of medicare programs? This would be one of the last things the government would cut and the defense budget would take hard its. It is how Obama dealt with the 500 billion dollar deficit, he cut defense spending. And even if they cut medicare programs, do you think the elderly would be happy with this? Do you think their kids and grand kids should have to work harder in order to pay for their grandmas diabetes treatment?

C4 R4: This is a topicality issue, if you were implying the improved upon theory while I was going of the National Sales Tax bill of 1999, there will be conflict onto which is supposed to be taken into account. I believe I have the firmer stance due to you not specifying which NST we are talking about in the first round. To clarify, the 1999 NST bill did not mention taxing business to business transactions.

C5 R4: Your example on Tennessee's Sales Tax's goes perfectly with my proposition, the Tennessee government is producing less taxes than it takes in. Meaning that the federal government is spending more money on Tennessee than Tennessee is giving back, making it one of the taker states. This proves that a National Sales Tax would lead to a DECREASE in tax revenue, I mean just look at Tennessee and their tax policies.

In summary, A NST will lead to a tax revenue decrease, which would lead to budget cuts and lay offs, and a greater wealth inequality. Not only that, but my opponent did not specify which National Sales Tax bill/theory he was using, leading me to claim he is fabricating a fake National Sales Tax.

My opponent has dropped the argument on a 13% tax rate failing for two rounds.

So if the National Sales Tax was passed, how would the middle class deal with it? They would get no tax relief and be burdened with higher taxes on products. This is even more frightening knowing the middle class drives our consumer market, so a blow to them would in fact hurt our economy. Explain to me, how would you fix such a problem without introducing a form of exemption? Exemption would go beyond the bill of the National Sales Tax (1999).
Debate Round No. 4


The first thing I would like to address is Rezamee"s Counter 4 from Round 3 that I was unable to respond to last round because I ran out of time. The simple truth of my position that prices would drop comes from the economic principle of inputs and outputs. A corporation is a separate legal entity owned by shareholders who must invest capitol in its operations in order to sustain it. Rezamee maintains that most corporations do not pay taxes. However, he neglects to identify the reason why these loopholes exist in the tax code: "double taxation". If these loopholes did not exist in the tax code, the corporation"s income would be taxed twice: by the corporate income tax and by the individual income tax ( While these loopholes do allow corporations to escape paying taxes, their shareholders still must pay taxes on their income from the corporation. This drastically affects inputs since the corporation requires capital to finance its operations. That capital can come from a number of places, but the primary source must be the reinvestment of earnings from shareholders. If their earnings are taxed, shareholders have less to reinvest in the corporation, limiting the possibilities for its expansion. Consequently, corporations must charge higher prices in order to generate more revenue to expand.

A National Sales Tax will shift the tax burden from income, which directly affects inputs, to the outputs of each individual step (also known as cascading, explained in my round 4 submission). Because the tax burden is more balanced, shareholders are empowered to increase their inputs to expand the organization. The increased inputs from shareholders will result in the corporation being able to give them a higher rate of return while lowering prices for consumers. According to the law of demand, "The most famous law in economics, and the one economists are most sure of, is the law of demand. On this law is built almost the whole edifice of economics. The law of demand states that when the price of a good rises, the amount demanded falls, and when the price falls, the amount demanded rises" ( When one examines a supply and a demand curve, there are clear equilibrium points where the increased production becomes less profitable. However, this is more of the market protecting itself against product saturation and telling the corporation to pursue another endeavor in addition to its normal activities. In summary, the Sales Tax enables corporations to increase inputs, which directly affect its outputs.

In response to Rezamee"s Counter 2, Round 4, I will begin by saying no offense taken by your comment on my job. I brought it into the discussion so it was open for criticism. I work a sales job where I earn $10 an hour for 40 hours per week and my commissions are paid every 2 weeks about a month after I earn them. They can be pretty inconsistent so I only mentioned my consistent income since that is how I must budget my expenses.

As for the rest of Rezamee"s counter, I am sorry if the discussion trended toward income inequality instead of wealth inequality. I could only debate on the terms he brought into the discussion: "C1: You state that the government can't affect income inequality, this is completely absurd. It's quite simple, with the current tax code, rich people create less capitol than with the NST (National Sales Tax), while a person on the bottom of the chain could save around 400 dollars if an 13% NST took place. It's quite obvious to see the income inequality, rich people would save thousands upon thousands while your average minimum wage worker would save 400 dollars. In summary, the gap would be even larger and tax revenues would shrink" (Rezamee, Round 2, Paragraph 4). A government cannot have a positive effect on income or wealth inequality by disrupting natural market forces in order to try to narrow the gap. Instead, the government will hurt all individuals in the market, especially the middle class and the poor, by destabilizing the market.

In conclusion to my response to this counter, business would not raise prices (see my explanation of the Law of Demand above). The increased market activity would cause prices to drop as organizations expanded. The only situation where your claim that business would begin to raise prices would occur at the equilibrium point in the supply and demand curves ( However, the natural market response would be to move something more profitable as competition would become harder.

In response to Rezamee"s Counter 5, Round 4, I did some research. The most recent numbers I could find on Tennessee"s budget were from 2013. In 2013, Tennessee had a $580 million surplus. For all intents and purposes, their tax code based around a state sales tax has succeeded admirably.

In wrapping my debate on the topic, a National Sales Tax will bring more prosperity and stability to the American economy through its simplicity, its fairness, and the fact that it does not tax wealth creation. Every American deserves to keep more of their income regardless of whether they are rich or poor. It balances the tax burden more fairly by taxing people who are more capable of paying it. The initial effect of the policy implementation may cause a temporary spike in prices, but it will result in lower prices as shareholders and small businesses find out that they can invest more in their operations instead of budgeting for a tax on their income and half a dozen other things. The increase in take home pay will enable Americans to handle the temporary spike in prices and will position them well for the market explosion when the prices drop.

For a closing statement on the debate, I would like to commend Rezamee for providing thought provoking contributions and arguments to this debate. I would also like to thank him for maintain a civil debate even though we seemed to have several misunderstandings on our relative positions. Thank you all for listening and I hope to hear some feedback about my debate performance and what I could do to improve in the comments.


I would like to mention my opponent has dropped his argument that there should be a 13% national tax rate, it has been forgotten for several rounds (Cameron Round One). This is especially amazing since the 13% tax rate was one of the core essentials of his primary argument.

In counter to Pro R5, he claims that I 'neglect' why these loopholes exist. This is getting ridiculous, it is obvious why the loopholes exist and I am not trying to say they shouldn't have loopholes. The point of my argument was to acknowledge that an elimination of a corporate tax would have no effects on prices due to most corporations already evading taxes through loopholes. Instead of trying to attack me there, Pro should of stated that all the ma n pa businesses would benefit from the elimination of the corporate tax. And yes, shareholders must pay taxes for if they play the game right, they can reap in hundreds of times more of what they payed in taxes, this has nothing to do with the corporate tax, what Pro is inferring is a completely different tax.

In Pros second argument R5, he uses the law of demand to justify how a rise of consumerism would commence. Again most major corporations already pay no taxes, there will be no fall in prices. Not only that, but prices aren't just determined if a corporation is being taxed lower, other factors such as, demand and supply take hold. And lets say we do implement a NST a decrease in taxes for the consumer would be nice for them, but this would cancel out with a increase of taxes elsewhere like products and services.

Instigators 3rd argument is irrelevant, so I shall not take this into consideration.

Responding to Cameron A4 R5, he concludes that he was not informed that I was talking about the wealth inequality that would sneak in with implementation of the NST. This is funny. Not only did I talk about how I was referring to wealth inequality in Rezamee R3, but I also state how income inequality is correct as well. Let me explain how these both can be witnessed in the plight of the NST. If you have a home worth 350k you can be considered a wealthy individual for owning that home, wealth inequality is when one class gets better and better life quality while another class is either stagnant or decreasing in quality of life. With a national sales tax the rich would create more CAPITOL, capitol is considered by the federal government to be a type of income, rendering my statement of income inequality true. By allowing the wealthy to create more capitol you can see real estate prices rise as well as auto-motives, which would hurt the middle and poor classes. How would these prices rise? Corporate in mentioned markets would see a rise of wealthy individuals, in race to make more cash, we could see many corporations biding for profit in raising prices in said markets (housing n cars).

I highly doubt the source you got for Tennessee having a surplus is legitimate, either that or, you manipulated the source/search for your benefit. Due to Tennessee being known to take more money from the federal government than them giving back in TAXES.

In summary, the National Sales Tax will only bring unbalance.. unbalance in our market, imbalance in our classes, and imbalance in our government. Not only this, but if implemented, we could see a rise of a aristocratic government which could prove fatal to democracy as we know it.

I would like to thank Cameron for the debate, it was very interesting, and I can not thank him enough for the learning opportunity.
Debate Round No. 5
2 comments have been posted on this debate. Showing 1 through 2 records.
Posted by AtkinsonCameron 2 years ago
@TubOLard, it depends on how it is presented to the American people. I believe that all someone has to do is stand up on live television and use example similar to the ones I did. Take the tax bracket in the 25% category. Make my numbers smaller and use someone who makes $50,000 per year. They still have to pay at least $12,500 in income taxes before they get their write-offs. I don't think that is going to go over well with the majority of Americans when they hear that. It gets worse for married couples too. Even after all the write-offs, the tax burden is still excessive. The key will be to stop talking about it in terms of percentages and start talking about it in terms of actual dollar amounts so people can see how their budgets can be impacted.
Posted by TubOLard 2 years ago
Good luck getting any politician or a majority of Americans to go for this. America is sinking and more people have an entitlement mentality. That means using government more to take money from someone else's pocket.
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