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Tarrif penalty on imports not manufactured to U.S regulations for polution, safety, child labor, etc

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Voting Style: Open Point System: 7 Point
Started: 12/18/2014 Category: Economics
Updated: 2 years ago Status: Post Voting Period
Viewed: 1,046 times Debate No: 67318
Debate Rounds (5)
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Here are two things that hinder the competitiveness of U.S. labor, and what the U.S. can do about it. First, we regulate the environmental impact, safety, and employment practices of our own manufacturing, but put no restrictions on imports from manufacturers outside the U.S. Regulating one business when its competition is unregulated regulates that business out of business. Second, we tax the income of U.S workers, making U.S. labor more expensive.

The U.S. could put a tariff as a penalty on imported products which cannot verify that the manufacturing meets or exceeds U.S. regulations. The easiest verification is for the importing country"s regulations to meet or exceed U.S. regulations, giving manufacturers in that country a tariff free reward. This is unpopular because many large businesses and the wealth of many rich in the U.S. now depend on foreign manufacturing. They don"t want to be penalized. However, this practice would tend to raise the standards of third world countries rather than lowering the standards of U.S. workers as has happened today.

Second, the U.S. could switch to a federal sales tax, which would tax all products, foreign and domestic, equally. Exempting basic food and clothing items could do the same thing as tax exemptions. This is unpopular because it threatens many income tax related jobs.


@Pvwebb: You have not provided the exact question that you wish to debate, so I would suggest that we use the following two motions:

1) The US should regulate the practises of companies that are allowed to import (environmental, safety, employment, ect.)
2) The US should implement a federal sales tax (instead of any state sales taxes) that affect all products equally.

I'll further note that you haven't disclosed the extent of regulation that you would like to see happen. So for now I will argue against the idea of all extending all US environmental, safety and employment practises to companies that would like to import.


Dear readers, the affirmative's proposal to regulate foreign companies is both grossly impractical and extremely harmful. It is a proposal prove impossible to enforce, raise costs for American consumers and harm developing countries.

This proposal will be impossible to enforce because the US does not have legal jurisdiction in foreign countries. It can't raid companies accused of violations - only ask permission to visit - so these companies will have time to cover up evidence of wrong doing and destroy any incriminating documents. It can't compel people to testify, so most workers will refuse to provide any evidence so that they can avoid being fired in retaliation. Even if a company agreed to allow inspections, the US couldn't afford to send an inspector over there as it would be prohibitively expensive. Because of these factors, the US won't be able to obtain the evidence it needs to detect and prove violations of these laws. Without a chance of being caught, foreign companies have no incentive to follow the laws and are likely to violate them whenever it would increase their profit.

Secondly, it will raise the costs for American consumers because many of these companies will simply choose to export to countries other than the US, rather than to go through the cost and complexity of complying with all of these regulations. These regulations are extremely complex and complying with two sets of regulations (US and their own country's) would be extremely expensive. But further, a lack of lawyers trained in US law and who speak the local language means that many of the companies wouldn't be able to comply with US law even if they wanted to. These companies will be banned from exporting to the US and so US consumers will have to pay more for their goods. The affirmative may argue that less imports will be good for American businesses. Perhaps there is some marginal benefit here, but for each new jobs created, thousands of American consumers will be paying more for their goods. If we look at this from a utilitarian perspective, we can see that this simply isn't worth it.

Thirdly, this will harm developing countries. While the US needs more businesses to create more jobs and increase taxable income, third world countries require these much, much more. These countries don't have unemployment benefits, don't have the mass of charities available in the US and don't have Medicaid. Without these programs people starve or suffer from debilitating illnesses that could easily be cured if they had a job and could afford medical treatment or if their government had more money to spend on hospitals. These people need the jobs and money much more than we do.

Further, a federal sales tax is a bad idea because it actually reduces competitiveness. The diversity of laws is one of the main strengths of the US - if one state sets its sales tax too high it doesn't damage the economy too much because they can always move to another state that is more reasonable. Secondly, the federal government already gets enough money and wastes it. The US national debt is already, $16,787,451,118,147 and that's with extremely limited unemployment benefits (compared to Europe and Australia), a poor medical system and one of the most expensive university systems in the world. If the federal government administered the sales tax then the next time there is a budget crisis, they would be tempted to start siphoning off money from the sales tax instead of passing it on to the states.
Debate Round No. 1


The original topic limited the topic wording. Here is more exact wording.
1) The US should have a penalizing tariff on imports (US companies manufacturing overseas are no exempt) in which the importer cannot demonstrate that the manufacturing of those products meet the environmental, safety, and employment regulations in the US. The penalty should be design to maintain competitiveness of both imported and internally manufactured goods.

2) The US should implement a federal sales tax and abolish income tax. Sales tax affects both imported and domestic products equally. Necessities such as lower cost food and clothing may be exempted to benefit low income. Income tax taxes US labor. [No mention of state taxes]

This is not an attempt for the US to directly regulate the practices of companies other countries, while it would encourage self-regulation. If a country has regulations reasonably close to those in the US then there would be no penalty. Any regulation has to potential of over-regulating an industry out of business. The US has failed to consider this with self-regulation. The US has applied regulations to domestic manufacturing without considering its impact on competing with foreign manufacturing. The US has continued to lose domestic manufacturing. This has caused a huge trade deficit. Our economy cannot maintain this indefinitely. The US needs manufactured products to export in order to reduce the trade deficit.

The US has already used tariff penalties on unfair trade practices. In the 1980"s Japanese companies were penalized for dumping computer memory on the market at below manufacturing cost. The dumping caused companies such as Mostek to go out of business. The penalty caused Hitachi to open a memory wafer fab in the US, and also developed a joint venture with TI, the TwinStar memory wafer fab. In the 1990"s Korean companies were penalized for dumping memory below cost into the US market. However, US computer manufacturers complained that this penalty would hurt US computer manufacturers using the memory while imported computers installed this memory overseas. So, instead also applying the penalty to imported computers with Korean memory, the penalty was so small that it was almost non-existent. As a result, all but Micron stopped making DRAM in the US, including Hitachi, TI, and TwinStar. Now, all the major US computer manufacturers contract their manufacturing overseas. While proper action may be complicated, no action isn"t working.

The reason most companies initially moved manufacturing overseas was to avoid antipollution regulations. Moving and training new workers was expensive, as opposed to labor cost savings. Even if the US were to persuade China to improve antipollution practices, this doesn"t prevent companies from moving manufacturing somewhere else where pollution is unregulated.

While the economy is picking up, almost all the recovery is to wealthy executives of large companies getting their wealth from overseas manufacturing. In 2008 and 2009, the majority of men over age 55 lost their jobs. Most either ended up getting a job for a small fraction of their original salary, or became consultants with little consulting opportunities available. These would be upper middle class, in whom income tax is highly dependent, now often have income credit instead. The wealthy are too few to fund income tax significantly. With the current trend, individual income tax could become more of a liability than an asset.


@Pvwebb: Thanks very much for clarifying the debate.

While it has been clarified that the US won't directly regulate countries, my objections still remain as to the general enforceability. Many of these countries do have various environmental or safety laws, but these aren't enforced because the owner's of the company use political connections or bribes to escape being held accountable or because disregard for the law is so rampart that there simply isn't the resources to enforce the law. US companies will still be outcompeted by countries that do adopt the desired regulations, but don't enforce them.

The proposed tariffs would be extremely harmful to developing countries because any country that has a tariff applied to it would immediately lose a large proportion of its market. This would lead to large numbers of job losses. Because developing or third world countries generally lack social safety nets, this would subject many people to homelessness, starvation and a lack of healthcare. It would also take funds away from these countries that are vital for development. I believe that most countries will have these tariffs enforced against them because there is an extremely large body of law related to the environment and employment practises. Reforming law is an extremely long process and so countries that don't already have such a legal framework in place won't be able to adopt it quickly. Further, it will take a rather significant amount of time to review the new laws adopted and to determine that the country has now adopted sufficient protections. As soon as a country has tariffs applied against it, the harm will be done. Businesses will pack up shop and move countries. Planned developments will be cancelled. Even if the country meets the standard and the tariff is removed, the country's economy would have suffered a significant set back.

The old Mercantile view that the balance of trade is what makes a nation prosperous has largely been discredited. The theories of absolute and comparative advantage show that we should expect international trade to result in greater economic efficiency and greater prosperity for both countries. In particular, in the case of the US, most trade occurs in US dollars. Since the deficit occurs in US dollars, as opposed to another country's currency, if there was a need to reduce the outstanding debt, the US could engage in quantitative easing to (moderately) increase inflation and hence devalue any outstanding debts.

Income tax has an inherent advantage over sales tax in that it is progressive. This is good because those with more money can better afford to pay tax (with the basics taking up a lower share of their income), than those who earn less money. @Pvwebb - how will it be determined which food and which clothing does not have a sales tax applied? I would also like to note that housing, utilities, education (such a college) and transportation take up a significant proportion of income - will the sales tax apply to these? If it does, then it will put a significant burden on the poor, if it doesn't, then whatever is being taxed will be being taxed very heavily.

I'd also like to question @Pvwebb about what they would suggest that the state's do in regard to tax? Would they keep a sales tax? In this case, a double sales taxes would result in a percentage that was ridiculously high? Or would he suggest that the states move to an income tax instead, in which case we still have an income tax and a sales tax and nothing has actually changed.

"The wealthy are too few to fund income tax significantly. With the current trend, individual income tax could become more of a liability than an asset." - 47 percent of federal income comes from income taxes ( and 34% from payroll taxes. This demolishes the claim that you made. Perhaps you should clarify - are you talking about eliminating income taxes and payroll taxes or just income taxes?
Debate Round No. 2


For this topic we"re addressing federal income tax not federal payroll tax. State taxes aren"t addressed. To address federal payroll tax we would need to address how to ensure people have adequate retirement support and medical coverage, as well as address unemployment insurance. But, payroll tax does bring up another important statistic because is a regressive tax as in the web site you mentioned ( Note what this means when looking at the graph, "Sources of Federal Tax Revenue,* 1945-2013," also on that site.

Note the increasing trend in the percentage of payroll tax in the total federal tax revenue from 1952 until 1995. At the same time, consider that people paying Social Security and Medicare taxes are also paying individual income taxes. Individual income taxes percentage during this period had a flat trend during this period while corporate income taxes percentage had a decreasing trend. Payroll tax is a reflection of who is paying individual income taxes. The increase in the percentage of payroll tax versus the decrease in the percentage of corporate income tax shows that income taxes have in actual practice become less progressive than designed. While inflation caused the monetary numbers of individual income to go up during the period, the actual value of the average income of those paying individual income has actually gone down during this period.

Manufacturing jobs are the mainstay of the US economy and exports ( This decline in income from 1952 to 1995 corresponds to a loss in manufacturing jobs. "Manufacturers in the United States are the most productive in the world, far surpassing the worker productivity of any other major manufacturing economy, leading to higher wages and living standards." ( The percentage of US jobs in manufacturing declined from about 28% in 1962 to 9% in 2011. ( "The United States lost 6 million manufacturing jobs between early 2001 and late 2009. And despite small gains during the last two years [2010 and 2011], the trend in manufacturing employment for the last 30 years has been downward." (

Particularly disturbing with the downward trend is the loss in higher paying technical design and engineering jobs (,,,, the middle and upper-middle income jobs, that are significant contributors to individual income tax. In our present recovery, the gains are for the rich. ( Essentially the corporations and their executives who have outsourced their manufacturing have made great gains in the recovery. But, the people who previously worked in manufacturing jobs are not economically recovering.

The outsourcing of manufacturing by US corporations has redistributed wealth among nations. In 2000 the US produced three times the manufacturing in China, but now China"s GNP exceeds the US. ( ) However, as seen in the previous paragraph, the distribution of wealth among people has become worse, with rich getting richer and middle class decreasing and poor increasing. At the same time, pollution and product safety has become an increasing issue in China. (,

Tariff penalties on imports are different from tariffs. They aren"t an across the board tax like income tax or sales tax. They are more like a traffic ticket, and the penalties specific to maintain competitiveness. Penalties would be on a case by case basis just as is currently done when there is a non-competitive practice complaint against importers now. Just as with non-competitive practice cases, penalties for lack of regulation compared to US regulations would only be applied when it severely affected US manufacturing"s ability to compete. Just as traffic tickets encourages drivers to keep traffic laws, the threat of a tariff penalty would encourage importing manufacturer to follow US regulations.

It is unlikely that a small foreign company independent of any US company would be considered a competitive threat. The bulk of the importers with this issue are tied to large US or international corporations. They have large legal staffs. The real issue is who will represent the US manufacturing workers who work for the same corporation that imports products and defends the importer. This is the most likely scenario. This might take a chartering an organization such as the EEOC. While enacting penalties might be rare, the publicity of the hearings would have an effect on corporate practices. A prime example is Apple and FoxConn. (,

Sales tax can be either regressive or progressive. The way federal sales tax was implemented in the 1960"s was progressive. It was a 20% sales tax on only luxury items such as jewelry. While we don"t want sales tax to be as complicated for the average citizen as income tax, it can be progressive by exempting necessity items such as food, clothing, and medicine. Income tax essentially taxes US industry as opposed to imported manufacturing; thus, making it harder for US manufacturing to compete. Even corporate income tax encourages corporations to move their headquarters overseas, an issue President Obama touched on in his recent news conference.

What other ways to do you have to address the problem of loss in manufacturing jobs in the US and its effect on the economy? I"m open to other options, but think we need to use all the good options we have available.


*Cause of US manufacturing decline*

It is important to realise that much of the source of manufacturing decline within the US has come from decreasing competitiveness internationally. As one of the first nations to industrialise, the US had a significant advantage in the international marketplace, but this has declined over time as more nations have begun to develop their industries. Tariffs on imports into the US won't improve competitiveness internationally, so they could at best have a limited impact on growing US manufacturing.

In fact, propping up non-competitive industries is actually harmful. It consumes resources that could better be dedicated towards those industries where the US has a competitive advantage. In the longer term, the importance of the international market compared to the domestic market will increase. The US market has traditionally been important because of a high per capita income. However, the rest of the world has rapidly been increasing in wealth and over time the international market for many goods will dwarf the domestic market. When this occurs, those countries that have focused on domestic consumers will be overtaken by those that have focused being competitive in the world marketplace.
In particular, I note that robots are gradually reducing the importance of labour costs in the production of goods. This transition will eliminate cheap labour as being a major advantage in many industries. These industries and technologies are precisely the industries in which the US should be investing, not labour intensive industries that we struggle to compete in.

*Harm caused by tariffs*

I have already explained that when a tariff is applied to a country this causes a massive amount of harm for three main reasons:
1. because the lack of a safety net in most developing or third world countries leaves those who lose their jobs especially vulnerable
2. because reforming the law (and being judged to be in compliance with the law) is often a slow process
3. because the sudden loss of a huge market will cause many suppliers to go broke - this won"t fully recover after tariffs are removed
Because of these massive harms, I don"t believe that tariffs are justified even when suppliers in developing countries have an unfair advantage as the harm in applying a tariff exceeds the harm that the tariff is intended to prevent. This is namely the decline of an inefficient industry and a loss in jobs in a country far better equipped to retrain these workers and, if necessary, provide a safety net.
Further, because manufacturers are competing internationally, they simply cannot afford to raise employment regulations to the standard of the US. This would simply be too costly and these companies would be outcompeted internationally by countries who companies gave up on the US market, but instead focused on markets that didn"t try to impose these punitive tariffs. But let"s suppose that this was feasible. Because these countries have a much lower cost of living, their labour costs would still be far below the US. The US would still be unable to compete in labour intensive industries - the tariffs aren"t going to change this.

*Sales tax*

I already explained that Mercantilism has largely been discredited ( and that modern economic thought based on Ricardo"s theory of comparative advantage is that they harm the world economy. Further, they increase the cost to consumers in order to benefit small groups with entrenched interests. This was not responded to.
You stated earlier that "The wealthy are too few to fund income tax significantly", yet you now seem to be talking about implementing an (additional?) luxury only sales tax. It is simply unavoidable that any sales tax will have to cover the majority of everyday items in order to make up income. Hence the sales tax will increase the amount required for a liveable wage, just as an income tax does, and hence it isn"t even clear that your proposal would even reduce the cost of labour, which appears to be your only reason for supporting a sales tax.

Your burden in this debate is to demonstrate that a sales tax would provide a significant advantage over an income tax. Otherwise, it is simply not worth reorganising our entire taxation system. The US taxation system has evolved over decades to ensure that people are taxed fairly (ie. no-one is double taxed), that incentives are created for desired behavior and to ensure that there aren"t loopholes. If we were to completely rewrite the taxation system, we would lose all of this progress. Further, changing the taxation system would create an enormous cost for both the government and industry in terms of rewriting software and training staff. Less investment due to uncertainty over the new rules and additional time spend adapting to the new system would slow economic growth. Unless you can demonstrate a clear and compelling advantage, it is simply not worth reforming the system.
Debate Round No. 3


*Cause of US manufacturing decline*

The US industrializing before other nations doesn"t change the argument. Europe industrialized first, but US industrialization was larger. Because of a close connection with Europe, the US learned from the pitfalls Europe had already experienced, especially preventing abusive labor practices. Because of cultural differences, the US doesn"t always have that connection with importing countries.

US lack of competitiveness is due to US antipollution regulations and fair labor practices, including adequate safety, wages, and benefits. Not that the US should get rid of these regulations, but that the loss of manufacturing and lack of competitiveness has pushed the US backwards. As the US loses manufacturing, the antipollution laws related to manufacturing become ineffective as far as the world is concerned. US minimum wage laws mean nothing from the standpoint of manufacturing if those wages are non-competitive. The gap between the poor and wealthy in both the US and importing countries is widening with the loss in middle class.

Most consumers don"t want to buy products manufactured by an abused labor force. The widening gap between the rich and poor is also occurring in China, where manufacturing is growing. ( Is this manufacturing growth overseas really benefiting those countries, or is it making US economics more like those countries? How will the US help those countries get over the pitfalls industrialized countries have already experienced?

Robots reduce labor costs, but have no impact on pollution and increase energy usage. Not only is pollution during manufacturing an issue, pollution related to generating electricity increases. Tooling up with robots cost money and takes technical people to employ. When the US loses manufacturing, especially as corporate headquarters are lost, the US loses the technical support and manufacturing income to pay for developing robotic manufacturing. Robotics is an important development in manufacturing, but has not actually reduce the importance of cheap labor. A good example is the semiconductor industry, which has increased the use of robotics in manufacturing. Semiconductor manufacturing as moved increasingly to Taiwan and China. Even Japan, with its emphasis on robotics, is increasingly outsourcing semiconductor and electronics manufacturing to China. The semiconductor industry depends highly on chemicals and deals with their disposal. If not done properly, these chemicals are a pollution problem. Printed circuit board processing has also been automated with pick and place machines and solder reflow, but this manufacturing has also moved overseas and must deal with disposal of chemicals.

The US cannot count on development of new products to keep manufacturing competitive. The loss in manufacturing is not only unskilled labor. Engineering and technical positions are also being outsourced to much lower salaries in China and India ( This has also lowered engineering salaries in the US so that people trained to be engineers are turning elsewhere.

"And, sadly, our top engineering graduates don"t always become engineers. They move into finance or management consulting " both of which pay far higher salaries than engineering. I have seen the dilemma that my engineering students at Duke University have faced. Do they take a job in civil engineering that pays $70,000, or join big Wall Street financial firm and make $120,000? With the hefty student loans that hang over their heads, most have made the financially sensible decision. In some years, half of our graduates have ended up taking jobs outside of engineering. Instead of developing new types of medical devices, renewable energy sources and ways to sustain the environment, my most brilliant students are designing new ways to help our investment banks engineer the financial system." (

In other words, instead of engineering graduates developing innovative ideas that give people jobs, they are developing schemes to make rich people richer.

The increasing cost of education versus the diminishing salaries for technical positions makes the payback for the cost of technical education questionable. The cost of an education in the US is increasing while the engineering salaries are not increasing if the jobs are even available. ( The current trend in the US is a rapid decline in technology and manufacturing competitiveness.

*Harm caused by tariffs*

A fixed indiscriminate tariff would be harmful, but the precedent of how the US has implemented tariff penalties prevents the harmful effects. An example of a tariff penalty is the penalty on Korean DRAM for price dumping. This case shows the US government considered the negative effects of the penalty and made a corresponding reduction in the penalty. The US government could use probation instead of a penalty when the importer is willing to make reasonable improvements with a monitored progress of those improvements over time. The purpose of the penalty is to improve competition, not to destroy it. As long as an importer achieved continuous improvements, they could remain under probation and not have the tariff penalty.

Even if government corruption hides violations, employees are not silent. Examples are the employees at Foxconn (, and the engineers in China and India. ( When these voices get a hearing, they will be even more vocal.

*Sales tax*

Suddenly abolishing income tax to replace it completely with sales tax is not practical. The US would need a gradual transition from income tax to sales tax. The significant advantage of sales tax is it taxes both imported and domestic items evenly. The disadvantage of income tax is that it taxes domestic labor and not the labor to produce imported products. Another advantage of sales tax is no tax returns. This eliminates a source of tax fraud. It also makes taxes simpler for citizens who have less than a business mind. People auditing the response of the IRS to tax questions have noted that they get different answers from the IRS depending on who they get on the phone. If the IRS doesn"t have a consistent way of filling out tax returns, how can the US expect its citizens to have a consistent way of filling them out?

A good beginning is the upper end of the sales tax, such as the federal 20% luxury tax previously implemented. This does not solely depend on the rich. While the rich tend to buy more expensive jewelry paying a higher tax, the rich aren"t the only ones buying jewelry and watches. What this does do is tax things people can live without. The US may also want to include electronics in the incremental start, maybe with a smaller percentage than 20%.


The current situation of manufacturing in the world demonstrates that the US cannot ignore the plight of manufacturing outside the US without it affecting US economics. Ignoring the situation minimizes US influence on world pollution. Allowing abusive labor practices has a backlash of making US labor costs non-competitive. Essentially, manufacturers with fair labor practices and good employee wages are losing out to those with unfair labor practices: paying their workers poorly and making huge profits. Is your solution to ignore this situation and let it eventually correct itself?


I'll address the three main points of this debate again, the cause of US manufacturing decline, the harms caused by tariffs and the effects of a sales tax.

*Cause of US manufacturing decline*

As I explained in round 3, much of the decrease in US manufacturing decline comes from other countries industrialising and hence providing increased competition in the international marketplace. This is important because tariffs only apply to the domestic market and because the international market will be much more important than the domestic over the longer term. Pro wanted to argue that the lack of competitiveness was due to US anti-pollution and fair labour practises. In regard to pollution, developing countries have begun to realise that polluting the environment will harm them in the long term and are hence starting to improve their environmental regulations, so this simply isn't as significant a problem as Pro would have you believe.

In regards to labour costs, I already explained that increased automation is making this less relevant. Pro listed the specific example of semiconductor manufacturing, but the US semiconductor manufacturing market is rebounding. "In 2007, the percentage of equipment spending for chip manufacturing in the US had dropped to 15 percent, an all-time low. Today, the U.S. market represents over 20 percent of world equipment spending with promising expectations for continued growth" ( This is because the maintenance of a highly automated industry, such as semiconductor manufacturing, requires a highly skilled workforce, not cheap labour.

Any suggestion that the US information technology industry needs tariffs in order to be competitive is ludicrous. The US still dominates this industry with most of the largest companies Google, Apple, Microsoft, Facebook, Ebay, Amazon and IBM all being US based companies. Sure, we can't compete with cheap Indian outsourcing, but tariffs can't make US outsourcing competitive internationally.

*Harm caused by tariffs*

Given that big corporations have entrenched interests, they will use their money and lobbying power to ensure that these tariffs are applied against as many of their competitors as possible. So even if the law allows specific tariff penalties, the result is likely to be wide ranging penalties against entire industries, when there are only a few bad apples. I have already explained why broad tariffs are so harmful.

Pro never responded to a number of key arguments. Firstly, that tariffs benefit big corporations at the cost of consumers. Secondly, corporations couldn't necessarily comply with all US labour and environmental laws and remain competitive in the global marketplace and hence imposing these tariffs is unduly burdensome. Lastly, that many countries have significantly lower costs of living and that the US will still be unable to compete against these countries even if they paid wages equivalent to US wages in their country.

*Sales tax*

I am willing to support the introduction of a luxury tax as a component of the tax system, but your burden in this debate is to show (in your own words), "The US should implement a federal sales tax and abolish income tax". I explained that reforming the tax system has a significant cost in terms of businesses migrating over and losing a system that has evolved over decades, so you need to demonstrate a compelling need to reform. Pro provided two benefits. Firstly, that removing tax returns removes a source of fraud. However, it is just as easy to buy goods with cash under the table as it is to get paid with cash under the table. Secondly, they argued that it would mean that citizens don't wouldn't have to file tax returns. Three responses to that: 1) filing a tax return is the price of having a fairer tax system that creates the right incentives 2) the proper response to this imperative is to simplify income tax 3) software (we have eTax in Australia) is reducing the time and effort involved in filing a tax return. So neither of pro's arguments are really compelling.
Debate Round No. 4


Cause of US manufacturing decline*

The article you referenced in round 4 on the US semiconductor industry ( is a short sighted view of the ups and downs in the industry on June 4, 2013. A quote from an article on September 23, 2013: "The prediction is even more bleak than the company forecast in June, which estimated sales of $35.8 billion for the year, a 5.5 percent drop." ( A highly disputed statement in the article you referenced is "We desperately need to see the passage of immigration reform, especially high-skilled immigration reform to allow more H1-B visas and green cards for those in the STEM fields." ( The dispute is whether three is a shortage in engineers, not the immigration reform ( On July 25, 2014 the Census Bureau reported, "The semiconductor and related device manufacturing industry employed 90,244 people in 2012, down 38.3 percent from 146,152 employed in 2007." (

The reason China continues to have a low per capita income is an issue with their competitiveness. China has been artificially keeping per capita income low by using a fixed exchange rate between the yuan and US dollar. This kept Chinese goods low and the US deficit with China huge. US Treasury Secretaries have been working with China to loosen the fixed rate between the yuan and US dollar. ( An example of a nation industrializing is Japan. In the 1950"s and 1960"s Japanese labor was considered cheap. By the 1980"s Japanese product were considered high quality and caused US companies to increase their quality. By the 1990"s Japanese labor was more expensive than US labor. South Korea has followed a similar industrial path to Japan. China has been industrializing for several decades now, but they have seen little increase in their per capita income because of artificially keep the yuan low compared to the US dollar. In this article on November 4, 2014 ( the US trade deficit continues to reach historic highs with 80% of the trade deficit to China. A quote from this article:

"Although the U.S. Treasury Department has praised China"s gradual appreciation of the yuan in recent years, it said last month that the currency still remains "significantly undervalued." Beijing"s currency intervention in the last year raised questions about the government"s commitment to move toward a fully market-determined exchange rate."

A $3 billion surge in buying of cell phones accounts for most of the $5 billion increase in imports. (previous link) Note that cell phone CPU"s are what caused an increase in semiconductor production in the US, but the resulting exports and imports left the US with a huge deficit.

The information technology industry in the US isn"t a big issue related to this discussion right now. The only related issue is companies complaining that they need more immigration to fill jobs in this industry. The only basis for this complaint is to drive wages and salaries down. Salaries of programmers in India are very competitive between companies in India, and those salaries are rising. Information technology does not directly contribute to pollution.

*Proper use of tariff penalties*

While it is unrealistic to expect importers to match US regulations exactly, it is not unrealistic to expect importer to allow progress which moves them closer to the US regulations. It is the hindering of that progress that should be penalized. Beijing"s currency intervention to keep the yuan valued low both keeps the standard of living in China low and gives an unfair competitive advantage to manufacturing in China. If China should continue to intervene in keeping the yuan low, this causes a need for action.

Care needs to be taken with this action to prevent the damaging effects of a tariff. First, an initial warning about a pending tariff penalty should take place with a deadline for China to stop intervention. The penalty should be large enough to remove the advantage of the intervention, so that the logical move is for China to stop the intervention. After intervention is stopped, the penalty changes to probation. The ideal is that the tariff is never imposed, but tariff must be a real possibility. To avoid damaging effects, the tariff needs to be changed back to probation in a reasonable amount of time after China stops intervention on the yuan.

*Sales tax*

As previously mentioned related to the graph, Sources of Federal Tax Revenue, 1945-2013, in the article,, the increase in payroll tax and decrease in corporate income tax bring into question how federal income tax has evolved. Either federal income tax has lost its progressiveness and loopholes have increased, or the effective average standard of living for people in the US has continually dropped over this period. In any case, federal income tax as actually implemented no longer looks significantly progressive.

Federal income tax software to some degree removes the need of going to a tax accountant, but it does not simply federal income tax. The questions federal income tax software asks are horrendous. The average US citizen probably doesn"t understand many of them. Federal income tax software usually takes a safe approach to ensure that the user pays all income tax that is due. Accountants and people well studied on the federal income tax system will say you may end up missing deductions using software. But, you may need a personal accountant to keep up with the paperwork and understand the tax system. Again, this favors the rich. One company"s software will give you a consistent answer. But, if you don"t get a consistent answer from different people working at the IRS, how do you know the software is right?

At the very least, federal income tax should not increase, including increases due to inflation moving people to a higher tax bracket. Ideally, income tax should gradually decrease. But, any replacement in revenue for income tax or increase in revenue should be sales tax.


A tariff penalty should only be used to protect competition, not prop up US manufacturing that isn"t competitive. US manufacturing was able to compete with Japanese and South Korean manufacturing. With these countries, the US used tariff penalties when importers priced products below manufacturing costs to driver competition out of business. The main issue in the present economy is when China intervenes to keep the yuan low compared to the US dollar. The US should specifically consider a tariff penalty if China continues this practice with the guidelines given in the proper use of tariff section above. Because China"s actions relate to currency, it is not traditionally considered an unfair trade. However, it has severely damaged competition in other countries as well as the US.

The US cannot expect other countries to have the same regulations as the US. However, the normal trend in countries as they industrialize is improved labor practices and improvements to reduce pollution. Hindering these improvements such as the case mentioned above should be subject to penalty. The US also needs the means to address companies moving manufacturing to different countries to avoid antipollution regulations.


Cause of US Manufacturing Decline

In round 3 I explained that the source of US manufacturing decline was primarily from other nations industrialising and providing increased competition. This means that tariffs won’t improve US competitiveness in the international marketplace, which is much more important for the long term and in fact harms it by encouraging people to dedicate resources towards non-competitive industries. I brought this issue up again in round 4, but Pro never rebutted this point, which was important as it meant that he couldn’t demonstrate his policy would be effective. Pro also failed respond to the point that even if countries paid workers the same as US workers in real terms, that because of the lower cost of living, these countries would still outcompete the US in many of these industries.

The article I referenced ( is not a short term view, but rather a view over the last 6 years. It also examines the projects slated for the future. In contract, Pro quoted an article that refers to global spending, not American spending and is hence largely irrelevant to a discussion of US manufacturing decline. Regardless, the semiconductor industry is only one industry and policy shouldn’t be decided on the basis of a single industry.

Pro complains that China has been artificially cheapening its currency and that this makes tariffs necessary. Firstly, progress is already being made on this issue. China’s nominal exchange rate increased 24% between 2005 and 2010 China’s real exchange rate, which determines how much of an advantage a country has in manufacturing goods cheaply, strengthened by 50% between 2005 and 2010 ( Secondly, it is unlikely that the US will be successful in pushing China to increase it any faster, because of the impact on their exporters. The Economist argues that, “Chinese policymakers accept that the yuan needs to appreciate over the longer term, but say now is the wrong time, because Chinese exports are still falling, by 14% over the past 12 months.” They also note that, while there might be advantages of this increasing further, “the sort of increase required—perhaps 25%—is politically unacceptable because it would put many exporters out of business overnight” ( Lastly, the Economist, notes that this wouldn’t reduce the deficit, because many of the good bought from China aren’t produced in America and so the consumers would still be purchasing them from overseas Since changing the Yuan wouldn’t reduce the deficit significantly and faster change would be politically untenable in China and it is becoming less of a problem anyway, this isn’t a good justification for export tariffs.

Harm caused by tariffs

I explained that corporations would use their money and lobbying power to ensure that these tariffs are applied as widely as possible and so even a law allowing tariffs to be applied in specific circumstances would inevitably be abused. I also explained that tariffs benefited big business at the cost of consumers, Pro never responded to that. I also explained that it would be unduly burdensome for producers to comply with US regulations or regulations similar to the US because this would increase their costs and damage their ability to compete in the international market.

Pro tried to soften their policy and argue that they were only trying to “move them closer to US regulations”, not “match US standards exactly”. However, the title of the debate is “Tariff penalty on imports not manufactured to US regulations…” and his more exact wording is, “The US should have a penalizing tariff on imports (US companies manufacturing overseas are no exempt) in which the importer cannot demonstrate that the manufacturing of those products meet the environmental, safety, and employment regulations in the US.” It is clear from this wording that Pro is required to argue that the US should utilise tariffs on good that weren’t produced standards equivalent to the US, not just utilise tariffs against the worst offenders. Given this, even with the warning and probation periods, these tariffs will be cause significant harm by requiring producers in countries where the law isn’t up to a US standard to pay for expensive certifications and spend large amounts of money changing various processes, which they mightn’t have.

Sales tax:

“The increase in payroll tax and decrease in corporate income tax bring into question how federal income tax has evolved”, the solution then, is to reform payroll tax and corporate tax, neither of what is suggested here. Personal income tax by itself is still progressive, excluding the ability of the wealthy to exploit tax loopholes. We should close these loopholes.

The questions federal income tax software asks are horrendous” - Many of the questions on this software is complex, but it is possible to hire usability experts to help rewrite the software at a fraction of the cost of rewriting our whole system of laws. Regardless, we can simplify our tax system somewhat without having to completely throw it away.

At the very least, federal income tax should not increase” - this is outside of the debate. Your burden is to argue that the federal income tax should be replaced, as opposed to staying the same.


The danger of the US deficit is largely overstated since it is denominated in US dollars. Forbes quotes Alan Greenspan: ”[A] government cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit.” ( Forbes also explains that although printing excessive money might lead to inflation, this is much less likely due to the dollar being used as a reserve currency. Inflation occurs when their is a greater supply of a currency than demand, but the role of the US dollar as a reserve currency guarantees a large demand.


In this debate, I explained that the main cause of US manufacturing decline was increased competition, because of this, Pro's policy was limited in its potential impact. I further explained that tariffs harm consumers, won't make the US more competitive internationally and indeed consumer resources that could be used more productively.

In regards to tariffs, I explained that big companies would use their lobbying power to ensure that tariffs were applied based on when it benefited them, rather than when they might be deserved. I further explained that tariffs cause an extreme amount of harm in countries without a safety net and that tariffs could decimate an industry and that the recovery would be limited even when the tariff was removed.

In regards to the deficit, I explained that mercantilism has largely been discredited and that the US debt is denominated in US dollars, so we can always utilise quantitative easing. Therefore, this wasn't a particularly strong imperative for action.

In regards to sales tax, I explained that sales taxes are less progressive and that implementing such a big reform would have significant costs. Further, since a sales tax increases the cost of living, it increases the cost of labour and hence fails to make US products more competitive.

In regards to references, while Pro used more references, my references support my argument more. My references demonstrated that Pro's mercantilist strategy of tariffs has been largely discredited, that the US foreign debt isn’t that significant, that the semi-conductor industry is in fact growing in the US and that Chinese depreciation of their currency can’t be changed by tariffs nor would it reduce the deficit. In contrast, Pro’s references didn’t allow them to win any major points of contention.

Debate Round No. 5
4 comments have been posted on this debate. Showing 1 through 4 records.
Posted by casebash 2 years ago
I enjoyed debating you too
Posted by pvwebb 2 years ago
@Cashbash: If nothing else, I found our debate very helpful. I appreciate your effort. It is asking a lot to get someone to read through our debate unless they are very interested in the subject.
Posted by casebash 2 years ago
No-one is voting on our debate :-(. I will be rather disappointed if this ends up being 0 all
Posted by pvwebb 2 years ago
This is the correct link for the statement:
The percentage of US jobs in manufacturing declined from about 28% in 1962 to 9% in 2011. (
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