The Instigator
huppypuppy
Pro (for)
Losing
0 Points
The Contender
donald.keller
Con (against)
Winning
18 Points

Should we redistribute wealth to remedy inequality

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Post Voting Period
The voting period for this debate has ended.
after 3 votes the winner is...
donald.keller
Voting Style: Open Point System: 7 Point
Started: 2/12/2015 Category: Politics
Updated: 2 years ago Status: Post Voting Period
Viewed: 914 times Debate No: 69957
Debate Rounds (3)
Comments (5)
Votes (3)

 

huppypuppy

Pro

Good luck to my opponent.
donald.keller

Con

I accept. I wish my opponent luck.
Debate Round No. 1
huppypuppy

Pro

A strong middle class is the foundation of democracy. Inequality endangers the middle class. Therefore inequality dangers democracy.
donald.keller

Con

To start my case, I shall begin with the Rebuttal this time around.

Rebuttal I: Pro's Case.

I need not use more than one rebuttal because Pro didn't state a case. his claim is begging the question...

P1) Middle Class is important for Democracy.
P2) Inequality hurts the Middle Class.
C1) Distribution should be used to fix the Inequality.

This claim does not explain why a Middle Class is important for Democracy, why Inequality hurts the Middle Class, or why Distribution would be the answer. At no level is Pro's claim explained or proven. While I will chose not to harp on P1 sense I do believe that case, P2 is not explained or proven. And C1 is brought in early without every explaining why Distribution would work, how we would accomplish it, or accounting for issues with using Distribution.

In reality, the Middle Class and Upper Class are equally important in a successful Democracy, so hurting one for the other fixes nothing.

Argument 1: Distribution of What?

Pro's case is made on the faulty premise that the wealthy are rich because they have money... The wealth are rich because they own assets, most of which are difficult to tax. The primary being Stock. Stock Dividends can be taxes, but stock can not be. How would one tax stock value? Where would the money come from? This is mind, Wealth Inequality takes into account non-taxable assets like Stock. Remove stock from one's wealth, and we see that the inequality is far smaller than assumed.

The wealthy become so via making a company, and going public. When they go public, the stock (aka ownership) is split up among the owners, and a lot of it is sold off. That being said, the Rich do not often get wealthy by bringing in massive paychecks, but by owning large portions of their company. When this is taken into account, it becomes questionable if distributing that 'wealth' is appropriate, or even possible. How would you tax their ownership? And if you did tax the value straight out of the stock, you would run into issues seen in Argument 3.

Argument 2: Affects of Inequality.

A major issue facing Pro's case is that he assumes Inequality hurts the Middle Class. There is no evidence of this... In the US alone, we rank under most European nations in Wealth Inequality (1), but have a far higher Average Wage than all European nations (2). The US even has higher Medium Income (3). (a note: Both measurements in source 3 require reading the footnotes to understand. The footnotes explain that US information is underestimated in both charts, and shows the actual numbers, both of which are above the others.)

That being said, the US has a powerful, and wealthy, middle class despite high inequality. Thus implying P2 of Pro's case ((P2) Inequality hurts the Middle Class) is wrong.

It must also be noted that the US has a smaller cost of living than most of those nations, thus making the US even richer despite Wealth Inequality.

[1] http://en.wikipedia.org...
[2] http://en.wikipedia.org...
[3] http://en.wikipedia.org...
[]

Argument 3: Affects of Distribution.

Distribution of wealth would be ineffective since most wealth is in stock value. To truly fix inequality, you must tax stock value. This would devalue companies, as most to not see stock prices rise enough to outmatch a simple 10% tax. That being said, by draining wealth and value from the stock market at any pace would cripple the economy. Lowering stock value from anything (be it taxes or a recession) is dangerous for an economy.

At just 15% tax, the Dow Jones Industrial Average would plummet. In the last five years, the average annual increase in stock value was 10%. On average, the Dow Jones would lose 4.5% of it's value annually(4). If 2014 (where stock jumped up 20%, making it an anomaly) were left out, stock were have dropped almost 7-9% a year.

Year Starting..... Increase - (Increase after 10% tax)
Year 2011 - 10% (-05%)
Year 2012 - 06% (-09%)
Year 2013 - 08% (-07%)
Year 2014 - 20% (05%)
Year 2015 - 08% (-07%)
Total - 55% (-23%)

At just 15%, the tax rate would have caused the Dow to plummet 23% in only 5 years. This assumes the plummeting value doesn't increase the speed at which it plummets. Therefore, the only way to redistribute wealth is to tax non-assets. but since non-assets make up such a small portion of the wealth's income, it would hardly matter. The top 1% only earns $717,000 a year in non-asset income (I say 'only' in the understanding that most people expect the top 1% to earn millions a year in pay)(5). Taxing them as much as 50% for distribution would increase the average income in the US by only $3000 a year (Taking $717,000 and dividing by half, added in with Average Wage * 99 and divided by 99 to find the new average wage.) Less then a 6% increase. This might decrease wealth inequality in the US, but only by decreasing the wealthy's income, not by increasing the poor's income. You would see Wealth Inequality plummet, but the poor would still see barely any extra income, further proving how Wealth Inequality is meaningless. Cutting the wealthy's income in half while barely increasing the poor's income would have horrible effects.

However, you would increase inflation. Money is earned by producing something, be it a product or service. This give money value. When the money is freely earned from the wealthy without producing anything, it causes inflation. When the wealthy and businesses spend more on distribution, but the number of product they have to sell stays the same, the price of the product goes up to match expanses and lost profits. When the poor have more money without more product to create demand for that money, prices increase.

Distribution on a scale necessary to decrease the income gap would only cause inflation, ensuring the poor are just as poor (if not more so) and the rich are poorer too. You simply make everyone poorer without actually helping anyone.

That all being said... The wealthy getting richer is good, since their wealth comes from stock value, and increasing stock value means a better economy for all classes. How much wealth someone else has implies nothing about how much wealth you have, but when their wealth is in stock, it's important that their wealth keeps increasing. If it stops, it means the economy is stopping. Having richer stock holders only means having a richer economy.

[4] http://stockcharts.com...
[5] http://www.forbes.com...
[]

Conclusion:
Pro has done nothing to prove Wealth Inequality is even bad, or that taking many from the wealthy would fix it. I have shown that Wealth Inequality is not important, and that distributing wealth would make the rich poorer while hardly helping the poor at all, and after inflation, everyone would be poorer.
Debate Round No. 2
huppypuppy

Pro

huppypuppy forfeited this round.
donald.keller

Con

Vote for the guy with the name andbface and shizz...
Debate Round No. 3
5 comments have been posted on this debate. Showing 1 through 5 records.
Posted by huppypuppy 2 years ago
huppypuppy
I have been busy sorry. I forfeit.
Posted by donald.keller 2 years ago
donald.keller
I hope Pro doesn't wait until last minute :/
Posted by cwt002 2 years ago
cwt002
So the best way to remedy wealth inequality is taking money from one set of people and giving it to another. This is not sustainable and it really does not fix the problem. The condition is still there and it will continue happening.
Posted by Nivek 2 years ago
Nivek
I second what my voter(MyDino) said. LOL
Posted by MyDinosaurHands 2 years ago
MyDinosaurHands
Pro, you should've wished yourself good luck.
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by lannan13 2 years ago
lannan13
huppypuppydonald.kellerTied
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Total points awarded:06 
Reasons for voting decision: Forfeiture
Vote Placed by dsjpk5 2 years ago
dsjpk5
huppypuppydonald.kellerTied
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Total points awarded:06 
Reasons for voting decision: Pro ff a round, so conduct to Con. O my Con developed an argument or had sources.
Vote Placed by Zarroette 2 years ago
Zarroette
huppypuppydonald.kellerTied
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Total points awarded:06 
Reasons for voting decision: ff