The Instigator
Pro (for)
2 Points
The Contender
Con (against)
28 Points

Tax cuts are based on a politically unsound philosophy, which has never worked in history.

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Voting Style: Open Point System: 7 Point
Started: 7/15/2010 Category: Politics
Updated: 7 years ago Status: Post Voting Period
Viewed: 3,887 times Debate No: 12556
Debate Rounds (3)
Comments (14)
Votes (6)




Disclaimer: While I don't necessarily agree with outrageous spending, I must state that I agree with cutting taxes even less.

There are two approaches to government spending that dominate modern policy: cutting taxes and tax-and-spend. They seem to accomplish the same goal in theory; that is, a balanced budget is the end result. However, in practice, there is one fatal flaw in the former approach. That flaw is the subject of the essay.

Ideally, a conservative approach to government couples low taxation and low spending. The idea is that, by lowering the burden on small businesses and corporations, those companies will be able to hire more people whom also pay taxes, meaning that the government gets more money anyway. This differs from a liberal approach, whereby high taxation gives the federal government more money to help those whom cannot help themselves. Here is an example to illustrate both approaches:

A lawyer makes $300,000 a year. At a 30% income tax rate, that means he would give $90,000 to the federal government and net $210,000. If policy makers lower the taxation rate to 25%, the difference is $15,000. This is, unfortunately, not enough to hire a new employee. However, when postulating that there are at least 10 million Americans that make $300,000+, $15,000*10,000,000=$150 billion. That difference alone is enough to cover the current stimulus plan before Congress, much less the full taxation.

But remember, the conservative approach is designed to couple low taxation with low spending, so less income is okay because it keeps money in the private sector. The fatal flaw comes when spending does not decrease. When Ronald Reagan was in office, as is well known, he cut taxes for millions of Americans. On the surface, this seems wonderful since money was kept in the private sector (which the author of this text is fully supportive of). However, spending actually increased during this era. As a result, the national deficit - and, concurrently, the public debt - skyrocketed. Over the eight years that President Reagan was in office, the public debt rose from under $1 trillion to well over $3 trillion. Or, put a different way (as percentage of GDP), from 24% to 50%*. Is the flaw evident? Look at the Bush Jr. administration, when taxes were cut three consecutive times. During this time, the pubic debt rose from roughly $3.4 trillion to just over $5 trillion*. As with the Reagan years, spending increased as the nation dealt with two wars.

So, the question is posited again: when has cutting taxes ever worked? Never.

That begs the question of when has tax-and-spend worked? Let's look at the Clinton era, which was the first time the federal government had operated under a surplus in decades. What did he do to cause it? He raised taxes, sort of. An individual making $75,000 in both the Clinton and Bush administrations would be taxed about $1,800 more under Clinton**. According to the US Census Bureau, just under 27% of all Americans make $75,000 or more. For ease of math, let's assume that the maximum amount that Americans make is $75,000 (which is a ludicrous assumption). 27% of 300 million equates to about 41 million. $1,800*41,000,000=$145.8 billion. Even under outrageously conservative estimates, that sum is still a significant amount of money. That, dear reader, is how President Clinton was able to reign in the federal budget.

(Author's note: To those claiming that the surplus experienced under Clinton was actually a delayed response from Reagan, that's simply a fallacy. Consider that it took nearly six years before Clinton was actually able to turn the budget around, even though he introduced his tax hikes in 1993. To say that it took over fifteen years for Reagan's tax cuts to take effect is grasping for straws at best and delusional at worst.)

Cutting taxes, when combined with minimal spending, is a wonderful Keynesian concept. However, that crucial coupling has yet to occur; it's as if a government bureaucracy requires large amounts of capital to operate. In the modern age of public aid, global cooperation, and war, this system simply cannot be afforded. Taxing, as toxic as it may seem, is necessary if the United States is to continue its global hegemony.

*Source: US Budget FY2009, Historical Tables, Table 7.1
**Source: Department of Commerce


President Clinton took office as the economy was emerging from a recession. The 1993 tax increases significantly lowered growth from what would be expected during a recovery:

"In the four years following the Clinton tax hike (from 1993 through 1996):

* The economy grew at an average annual rate of 3.2 percent in inflation-adjusted terms;
* Employment rose by 11.6 million jobs;
* Average real hourly wages rose a total of five cents per hour; and
* Total market capitalization of the S&P 500 rose 78 percent in inflation-adjusted terms." [1]

The real boom came after tax cuts were passed in 1997. The largest cut was in the capital gains tax rate, which was reduced from 28 percent to 20 percent. In 1995, $8 billion was invested in venture capital.

"By 1998, the first full year in which the lower capital gains rates were in effect, venture capital activity reached almost $28 billion, more than a three-fold increase over 1995 levels, and by 1999, it had doubled yet again. ... The explosion in venture capital activity cannot be credited entirely to the cut in capital gains tax rates, as the cut fortuitously coincided with technological developments that gave rise to the Internet-based "New Economy." However, the rapid development and application of these new technologies could not have occurred at such a rapid clip absent the enormous investment flows made possible largely by the reduction in the capital gains tax rate. This experience demonstrated yet again the truth of the axiom: The less you tax of something--in this case, venture capital investment--the more you get of it."

Pro is wrong in supposing that the 1993 tax increases led to the balanced budget. The surpluses were in 1998, 1999, and 2000,[2] ... after the tax cuts.

"The Clinton years present two consecutive periods as experiments of the effects of tax policy. The first period, from 1993 to 1996, began with a significant tax increase as the economy was accelerating out of recession. The second period, from 1997 to 2000, began with a modest tax cut as the economy should have settled into a normal growth period. The economy was decidedly stronger following the tax cut than it was following the tax increase."

The other half of the equation is government spending. We expect the federal budget to rise in proportion to the population and with inflation. If government spends less per household after correcting for inflation, then that is a spending cut. In the 1990's, spending by that measure did not increase. [3] There were no dramatic cuts in spending, but stability is a good test of the theory that tax cuts can produce surpluses. that is exactly what happened. Surpluses appeared under constant spending with tax cuts.

There were political reasons why spending was stable in the 90s. There was a large "peace dividend" after the Cold War. Both Parties agreed that the military budget should be reduced substantially, and and it was kept low during the 90s. Further decreases in spending, such as welfare reform, as well as the 1997 tax cuts were a product of House Speaker Newt Gingrich working with President Clinton on a bipartisan basis. The politics are difficult to achieve, but not impossible.

Turning to the political theory, Pro claims it is a matter of simple arithmetic: just raise the tax rates and the government gets more money. Experience does not support Pro's idea of simplicity. What actually happens is that taxes reduce the income that people have left over to spend or invest. people adopt tax avoidance strategies over what would have been sound investment, and people are discouraged from working harder for less reward. Tax cuts increase revenues for the opposite reasons; people make sound investments based on the returns.

"In 1980, the last year before the [Reagan] tax cuts, tax revenues were $956 billion (in constant 1996 dollars). Revenues exceeded that 1980 level in eight of the next 10 years. Annual revenues over the next decade averaged $102 billion above their 1980 level (in constant 1996 dollars)." [4]

Tax cuts in the 1920s and the Kennedy tax cuts both increased revenues. [5] Tax cuts do not always increase revenues. Basically, if taxes are low then raising them does not deter investment, so people's behavior is unaffected. The peaking of revenue at some intermediate tax rate is called the Laffer curve. Laffer acknowledges he didn't originate the concept:

Ibn Khaldun, a 14th century Muslim philosopher, wrote in his work The Muqaddimah: "It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments." [6]

Consequently, the correct arithmetic is that if tax rates are set to produce peak revenues on the Laffer curve, called T*, then if the government spends more there will be a deficit and if the government spends less there will be a surplus. There is no tax rate that can catch up to sufficient overspending.

Liberal Democrat Erskin Bowles, appointed to co-chair President Obama's Deficit Commission, says it is clear that no amount of taxation or growth can possibly resolve the country's deficit problem. The Washington Post reported that Bowles, White House chief of staff during the Clinton administration, told the governors, "We can't grow our way out of this. We could have decades of double-digit growth and not grow our way out of this enormous debt problem. ... We can't tax our way out. ... "[7]

While the Federal government has shown no will to cut spending in recent years, at least stability was maintained under Clinton, and many states have accomplished spending cuts, even profligate California. Which side of T* we are on is debatable, but clearly taxes are high. I think revenue would increase by lowering the tax burden. What is absolutely certain is that spending must be cut. Pro's objection to the political philosophy of cutting taxes and spending is that spending cuts are impossible to achieve politically.

I contend that spending cuts are actually inevitable, because otherwise the country will suffer complete economic collapse. It is arguable as to when that reality will set in, but it is inevitable. Look, for example, at Greece and Spain. Long accustomed to unlimited spending, Greeks rioted at the suggestion that government employees might have to retire at 55 rather than 53. Nonetheless, faced with no other choice, Greece and Spain are cutting spending. [8, 9] The political will to cut spending will certainly arise to cut spending as economic disaster looms. The Tea Party movement is an early precursor of that.

Tax cuts and spending cuts are both sound political philosophy. The philosophy only says there is a point of maximum tax rates. Past history has shown revenue increases after tax cuts, and Clinton combined tax cuts with stable spending to produce a budget surplus. The political will to cut spending has been demonstrated both by states and foreign countries when facing economic disaster. We will have no choice.

The resolution is negated.

[7]From The Detroit News:
Debate Round No. 1


I do thank my opponent for providing a worthy debate! I am exciting to see how it turns out.

At first glance, my opponent's numbers seem convincing; damning, even. However, through all the mulch and spreading tactics, Con attempts to pull a fast one by misinterpreting (and abusing) statistics. For example:

"The real boom came after tax cuts were passed in 1997. The largest cut was in the capital gains tax rate, which was reduced from 28 percent to 20 percent."
Yes, economic prosperity happened to exist past the tax cuts. However, by 2000, the economy was slowing and in 2001 the economy slipped into a recession[1]. Speaker Newt Gingrich feared that the tax hikes of 1993 would lead to a recession, yet just the opposite happened. Moreover, when tax cuts were passed, the economy slips into a recession. Not quite causation, by correlation nonetheless.


"In 1980, the last year before the [Reagan] tax cuts, tax revenues were $956 billion (in constant 1996 dollars). Revenues exceeded that 1980 level in eight of the next 10 years. Annual revenues over the next decade averaged $102 billion above their 1980 level (in constant 1996 dollars)."
There are two things wrong with this claim. First, the amount of money itself is irrelevant. A more correct tool for measuring tax revenue is percentage per capita[2]. Per that measurement, federal revenues only grew 19% during the Reagan years, far less than the astounding 41% achieved under Clinton[2]. Second, Reagan's tax cuts were followed almost immediately by a tax hike[3]. The "Tax Equity and Fiscal Responsibility Act of 1982" was designed to rescind some of the effects of Reagan's huge tax cuts the year before. The name of the act itself is a point for the Pro: it suggests that taxing is the only fiscally responsible method of governance.


"...the Kennedy tax cuts... increased revenues." (Author's note: the reason I left out the tax cuts of the 20s was because I was not able to find any information to confirm or deny th
This is false. It is not an exaggeration or manipulation of data; it is simply false. The Revenue Act of 1964 actually decreased revenue by 1% of GDP, or roughly $54.9 billion constant 2003 USD[4].

It is the Heritage Foundation's - a conservative think tank designed to propel agenda - misuse of statistics such as the ones my opponent has used that likely discount the credit of the source in its entirety, invalidating a large portion of Con's case.

As I mentioned before, Con has used all 8,000 characters in an attempt to spread Pro out of the round, calling upon many short, disjointed facts and figures. However, this debate boils down to two key areas of interest - the Clinton years and the Reagan years. Thus, I will spend the rest of the round speaking about those eras.

1. Reagan
My opponent mentioned the Laffer curve, which does indeed indicate that tax receipts nearly doubled under Reagan's tenure, meaning that the deficits incurred were simply because of the raising government costs. Once again, there are two things wrong with this explanation. Here are the four points of Reaganomics:

Reduce government spending,
Reduce income and capital gains marginal tax rates,
Reduce government regulation of the economy,
Control the money supply to reduce inflation.

Notice the first point. That is the first problem with the Laffer argument, in that it contradicts the goals of tax cuts in the first place. Second, history shows that the large reductions in income tax rates in 1981 were followed by abnormally slow growth in income tax receipts, while the increases in income-tax rates enacted in 1990 and 1993 were followed by sizeable growth in income-tax receipts[5]. Ergo, not only did the tax cuts not follow spending cuts (a point made by Pro in Round 1), revenue was actually less than under Clinton; a period when spending was down to begin with, as pointed out by Con.

2. Clinton
No matter how you spin it, the Clinton administration oversaw the single longest peace-time growth American history. Clinton's major contribution was pushing through the 1993 budget bill, which began to reduce what had become a chronic string of federal deficits. Republicans denounced it as the "largest tax increase in history," though in fact it was not a record and also contained some cuts in projected spending. Republican Rep. Newt Gingrich predicted (as previously mentioned): "The tax increase will kill jobs and lead to a recession, and the recession will force people off of work and onto unemployment and will actually increase the deficit." But just the opposite happened. Fears of inflation waned and interest rates fell, making money cheaper to borrow for homes, cars and investment. What had been a slow economic recovery turned into a roaring boom, bringing in so much unanticipated tax revenue from rising incomes and stock-market gains that the government actually was running record surpluses by the time Clinton left office[1].

Clinton can also be given credit for reappointing Alan Greenspan as head of the Federal Reserve, where the economist was widely credited with a masterly performance in handling interest rates. This was an unusual move for a Democratic president, as Greenspan is a libertarian Republican who had been a close economic adviser to Republican Presidents Gerald Ford and Ronald Reagan. Greenspan and Clinton worked closely, and in 2007 Greenspan praised Clinton's handling of the federal deficit and his support for liberalized trade, calling him "the best Republican president we've had in a while.[6]"

In summation, I would like to quote Gregg Easterbrook in his immortal phrase, "Torture numbers and they'll confess to anything." Instead of looking to misleading interpretations, we must look to the original source material that give true meaning to numbers. Because my opponent's case is based, by and large, upon incorrect interpretations and because Pro has shown that Con's own statistics often work against themselves, vote Pro.

1. "Reaganomics vs. Rubinomics." Business Week, 21 June 2004.
2. "Reagan and revenue." Paul Krugman, New York Times, 17 January 2008.
3. Jerry Tempalski, "Revenue Effects of Major Tax Bills " OTA Working Paper 81, Office of Tax Analysis, US Treasury Department, July, 2003.
4. Joint Committee on Taxation; Tax Foundation.
6. Felsenthal, Mark. "Greenspan faults Democrats on trade." USA Today, 23 Sept. 2007


-> Pro's simple arithmetic is wrong

The resolution is that "tax cuts are based upon an unsound political philosophy, which has never worked in history." The philosophy has two parts, cutting taxes and cutting spending. Pro's proof of the alleged error in philosophy was that (1) if the government wants more money, it should just increase taxes, because that always works, and (2) spending cuts are politically impossible as proved by observing that it never happens.

Pro basically conceded that his first contention, that cutting taxes always reduces revenue, was wrong. He said that only part of the Reagan tax cuts were repealed, and that revenues grew by 19%. Moreover, he concedes that revenues grew after the 1997 tax cuts during the Clinton administration. According to the simple math he claimed applicable in his opening argument, higher taxes always mean higher revenue and lower taxes always mean lower revenue. That didn't happen, so his contention was false. I'll get to Pro's new argument in a minute.

Pro's second contention was that it is political impossible to cut spending. I showed that when the situation gets bad enough, spending cuts are inevitable. I cited cuts by profligate spenders like California, Greece, and Spain. I also noted that during the prosperous times of the Clinton Administration, that through bipartisan effort is was possible to at least keep spending constant. Pro had no rebuttal. He has conceded the point.

With both points disproved, his original case is dead. He has proposed a new case. He now claims that simple arithmetic does not apply and that many factors affect the economy and the taxes collected. Pro is correct in these generalities. He maintains that Federal Reserve policy changes brought the revenue increases after the 1997 tax cuts, not the tax cuts themselves. Moreover, he makes the claim that while Federal Reserve policy increased revenues, the tax cuts brought the 2000 recession. His position is that increasing taxes, per 1993, brings economic growth, while tax cuts, per 1997 brings recession. This is at the very least counter-intuitive.

-> Reagan Era

My position was that simple arithmetic does not apply, and Pro now agrees with that. I introduced the concept of the Laffer curve. If taxes are zero, the government gets no revenue. If taxes are very high, the government gets very little revenue, because people stop working, evade taxes, and invest overseas. Pro wrongly equated the Laffer curve with Reagonomics, and cited four elements of Reaganomics. The Laffer curve stands alone and applies to all economic policies; it worked in the 14th century. Amid many factors affecting an economy, tax increases will produce either more revenue or less revenue, depending upon where the rates are with respect to the peak point. We can have a debate over where that point is, but the underlying political philosophy, claiming that such a debate is sound, is correct. Pro disputed Reaganomics as a whole, but said nothing to rebut the Laffer curve.

Pro conceded there was 19% revenue growth after the Reagan tax cuts. He argued that growth would have been higher with different policies, but that is irrelevant.

-> Clinton Era

Getting back to the 1990s, I think the main thing driving prosperity in that period was productivity gains from the vast increase in the use of computers. That's when personal computers took hold and permeated the business economy. It may be upsetting to some to think that something other than government policy was the dominant factor, but that was the case. Pro argues that Clinton Republicanesque policies like free trade helped growth; I agree. Government spending was stable because of the peace dividend. The 2000 recession was caused, I believe, mainly by Federal Reserve policy being too loose, but also by speculative excess in the dot com boom.

Pro argues that since the 1993 tax increases did not cause a recession, that proves they cause prosperity. However, I presented data showing that recovery from the recession of the early 90s, already under way when Clinton took office, was much slower than normal recoveries. Pro provided no rebuttal.

For Pro's argument to be correct, that increased taxes stimulate the economy and that tax cuts cause recession, he must have an economic theory that government spends money more productively than the free market. Taxes are extracted from the free market, where the money supports consumer demand and investment in new enterprise, and is spent on government benefits and subsidies to whatever constituencies favored by the Party in power. this is no to say that all government spending is a negative, funding police and a court system, for example, is a positive. We are way beyond that. I know of no economic theory that supports the contention that government is more efficient than free markets. All the examples are contrary: North Korea versus South Korea, East Germany versus West Germany, and so forth. Those who favor big government rarely claim it is more efficient; they claim it is more equitable. In any case, Pro offered no such theory.

-> 1920s

Pro did not refute the claim that lower taxes increased taxes in the 1920s, saying he could find no references. If one Googles "tax policy 1920s" an abundance of references appear. The article "1920s Income Tax Cuts Sparked Economic Growth and Raised Federal Revenues" contains hard data and summary graphs. There is nothing in the first 20 Google hits that supports Pro's position. I didn't look beyond that. The 20s provides a good example because tax rates were very high, so cutting them produced dramatic growth. Clearly in that era, the country was on the down side of the Laffer Curve.

-> Kennedy Tax Cuts

Pro read the table wrong in his reference, citing the budget deficit for the year enacted rather than revenue change. The Kennedy Tax cuts, enacted in 1964, were targeted mainly at business in the belief they would spur growth. The revenues from both individual and corporate taxes grew after the tax cuts.

Tax Revenues (Billions $)
Year Individual Corporate
1964 .. 48.70 ... 23.49
1965 .. 48.79 ... 25.46
1966 .. 55.45 ... 30.07
1967 .. 61.53 ... 33.97

-> Low Taxes Spur Growth

In addition to the Laffer Curve, whereby high tax rates reduce revenues, there is an effect whereby increased taxes reduces overall growth. In the long run, economic growth is the most important single factor in the economy, and a good economy generates high revenues.

Switzerland is a prime example of restrained budgets and low taxes producing a budget surplus, even in these difficult economic times.

Closer to home, tax increases and large deficits had been anticipated by the previous governor, but a new administration canceled the tax increases and cut spending. The result is a budget surplus despite the recession

Worldwide, "In a recent paper, Alberto Alesina and Silvia Ardagna, economics professors at Harvard, found that in developed countries, spending cuts were the key to successful fiscal adjustments — and were generally better for the economy than tax increases. .. Sweden, Finland, Canada and, most recently, Ireland, have cut their government budgets "

Tax cuts and cutting spending comprise a sound political philosophy. Spending cuts can always produce surpluses, and tax cuts inevitably promote growth. That's sound.


Pro should give the web links for his references so I don't have to search for them. Pro's [6] does not say anything about Greenspan praising Clinton's deficit handling, nor does it contain the quote.
Debate Round No. 2


Let me begin by stating that this has been the toughest and by far the most enjoyable round I have yet had in my short time debating on DDO.

There are certain aspects of my argumentation and economics used thus far that seem to confuse my opponent. I must take some of the blame, however, as I am learning more with each post. Before I get to some key voting issues that I think are the most important of the round, let me first clear up some things.

1. The Arithmetic
In this argument, my opponent is being hypocritical. After I first posited taxation as being simple arithmetic, Con argued that it is not and proposed more complicated theories. I rebutted by debunking Con's theories with more detailed numbers showing that the arithmetic is, in fact, simple (more on that in a moment). Then, Con argued that Pro was contradicting itself by positing more complicated numbers. In fact, I was showing that, for all the complication, the arithmetic was still, inexorably, simple. Look:
[Tax $1,000]-[Spend $1,000]=Even. [Tax $500]-[Spend $1,000]=-$500.
This simple arithmetic can be found in increasingly complex numbers throughout history, in the examples I brought up before.
Furthermore, I did not argue in my first case that it was politically impossible to cut spending, it would be foolish to assume as such. What I did argue, however, was that cutting spending had never occurred in accordance with tax cuts. That is something my opponent has yet to contradict. And as we both seem to agree to the Laffer curve, without an historical example of the coupling of tax cuts and spending cuts, Con's argument falls.

2. The Kennedy Cuts
As I brought up in my last post, the change in revenue in rote dollars itself is irrelevant; that is, revenue goes up regardless due to inflation and population growth. Rather, revenue effect as a percent change in GDP is more telling*, which is why I used percentage in my previous post. Per the chart I referenced, government revenue decreased by a full percentage point GDP, solid evidence that tax cuts, in that instance, failed. It simply doesn't matter that revenues increased one year to the next as that is a natural occurrence with virtually no effect from government policy.

3. The Laffer Argument
I never said I disagree with the Laffer curve. Rather, I argued that Con's use of the Laffer curve is irrelevant and disagrees with the context in which he was arguing.

4. "...increased taxes stimulate the economy." (Con)
I would like my opponent to find any mention from anything I have written thus far that supports the idea that governments spend money more effectively than the free market. My argument, concordantly, was that cutting taxes does not stimulate the economy, not that raising taxes does.

5. The 1920s.
My exemption from arguing about the 20s was due to the lack of evidence amongst Con's cited sources. Moreover, none of the top 20 Google results supplied GDP information that could be used to calculate the percent + or - government revenue.

6. Switzerland.
Since the specifics of the deals described in the article cannot be obtained, this point is irrelevant.

7. Virginia.
Actually, according to that article, the surplus was due in large part to federal stimulus money. Revenue still dropped, even with tax cuts. This is a point for Pro.

8. Worldwide.
Nothing in that article speaks of tax cuts.

Key Voting Issues from the round:
a) In historical examples (with sufficient GDP data), tax cuts always reduce federal - and, thanks to Con, even state - revenue.
b) The Clinton tax hikes corresponded with a 41 percent revenue growth, far surpassing the 19 under Reagan.
c) My opponent's sources have shown time and again to misuse statistics, invalidating the vast majority of Con's cases.

Once again, I thank my opponent for an entertaining and enriching round. May the best arguments win.

*Jerry Tempalski, "Revenue Effects of Major Tax Bills " OTA Working Paper 81, Office of Tax Analysis, US Treasury Department, July, 2003.


Pro picked a very good topic and provided much to discuss throughout the debate. He is off to a good start on ddo, and I urge him to continue with tough debate challenges. I enjoyed the debate; Pro made me do my homework.

The resolution is "Tax cuts are based on a politically unsound philosophy, which has never worked in history." He starts by saying the philosophy he claims to be unsound is "tax cutting" and that it has a "fatal flaw" in that approach. He explains that "a conservative approach to government couples low taxation with low spending." I agree that is the conservative approach to governing. He then claims "The fatal flaw comes when spending does not decrease." He cites Bush and Reagan under whom taxes were cut, but spending increased. He says that "Cutting taxes, when combined with minimal spending is a wonderful Keynesian concept. However, that crucial coupling is yet to occur ..."

When Pro says it is a "wonderful concept" he concedes that minimal spending coupled with low taxation would be a sound political philosophy, meaning it would produce surpluses, if it was a practical approach. He further claims that "cutting taxes has never worked." He gave an example of how, by simple math, more taxes produce more revenue.

Pro's resolution is therefore negated if I can provide a single example of budget surpluses produced by minimal spending coupled with low taxes and a single example of revenue increasing when taxes are lowered.

I provided four examples of budget surpluses produced as a combination of low taxes coupled with minimal spending. They are (1) the Clinton era, after the 1997 tax cuts; (2) in the 1920s when there were 10 years of surplus; (3) in present-day Switzerland; (4) and in present-day Virginia. Pro rebutted that while it is true that there were surpluses after the 1997 tax cuts, it was due to Federal Reserve policies; he argued that he could not find enough information to counter the examples of 1920s and Switzerland, and he claimed that the surplus in Virginia was not a product of the massive spending cuts enacted while keeping taxes down, but rather due to the Stimulus Plan.

In a debate, if good evidence is provided to substantial a contention, and the opponent cannot find counter evidence, then the contention stands. In this debate I used nothing but the Internet for research, so it was perfectly fair. Therefore the examples of the 1920s and of Switzerland defeat Pro's contention that tax cuts have never been combined with minimal spending to produce surpluses. They were substantiated with good unrefuted evidence.

I agree with Pro that there was a lot more than tax policy going on during the Clinton years, but it is nonetheless clear that lower taxes always promote economic growth, because private spending is more efficient than government spending. Pro ultimately agreed with that principle. That principle applies to the Clinton era, so no matter what else was going on, lower taxes promoted growth and growth produces more taxes.

As to Virginia, the Stimulus threw in a few dollars, but it was the massive cuts and minimal taxation that accomplished the surplus. Forty-eight other states received the Stimulus and had deficits. (North Dakota had a surplus for reasons other than taxes and spending.)

Pro's other key contention was that tax cuts always reduce revenues. Pro ultimately agreed that the Laffer curve is a correct theory, and the curve determines whether increasing taxes will increase or decrease tax revenues. That defeats Pro's contention that it is unsound to advocate tax cuts. the specifics are arguable, but it is sound to make the argument.

Beyond that I offered four examples of tax cuts increasing revenues: the 1920s, the Kennedy cuts of 1964, the Reagan era, and the Clinton era. Pro said he could find no counter evidence to the 1920s example, even after I provided the Google search key that produces dozens of references. In the 20s, tax rate were very high, so the country was clearly on the down side of the Laffer curve. Pro did not refute the example. Pro conceded that revenues rose in the Reagan era, but said they might have been more with a different set of economic policies. Perhaps they might have been more, but Pro's contention that tax cuts always reduce revenues is disproved. Pro didn't dispute the Clinton era rise in revenues, but attributed them to Fed policy.

Pro raised an interesting argument with respect to the Kennedy tax cuts. The data I presented showed that tax revenues, measured in dollars, rose in each of the three years following the tax cuts. Pro argued that revenues should be measured as percentage of GDP, not in dollars. That is very, very wrong. Let's consider two hypothetical tax policies, A and B. Let's suppose that when policy A is implemented, tax revenue rise from 50 to 60 and GDP rises from 200 to 300. Policy B causes revenues to rise from 50 to 60, but GDP falls from 200 to 150. By the standard of percent of GDP, policy B is a blazing success, because by devastating the economy it managed to grab a higher percentage of GDP! Pro has the argument backwards. We want the government to get more revenue to perform it's necessary functions, but a lower percentage of GDP so the citizens have more money to spend and invest.

Originally, Pro implied that cutting spending was a political impossibility, so therefore a policy of minimal spending was impractical. During the debate I introduced evidence that profligate spenders including California, Greece, and Spain had cut spending, and also "Sweden, Finland, Canada and, most recently, Ireland, have cut their government budgets." Politicians don't like to cut spending, but that doesn't mean it is not sound policy. They will do it when the alternative appears worse.

Pro claimed that I was using misleading statistics throughout the debate. His prime example involves his misreading a table in his own reference, in which he mistakenly thought the column in a table that gave the Federal deficit as a percentage of GDP was something else. I pointed out the error, but he did not acknowledge it.

When economic professors at Harvard produce a study that concludes "in developed countries, spending cuts were the key to successful fiscal adjustments — and were generally better for the economy than tax increases." we are assured that the once-controversial philosophy of minimal spending and low taxes has entered the mainstream.

All of Pro's contentions have been defeated. The resolution is affirmed.
Debate Round No. 3
14 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Shtookah 7 years ago
The heritage foundation.... really roy..?
Posted by gogenhwang 7 years ago
we need tax cuts now because if you tax the rich you are taxing the employers. taxing them more will result in making them want to layoff more people
Posted by RoyLatham 7 years ago
It is not possible to be a libertarian and also believe that the goal of tax policy should be for the government to get as much of GDP as possible.
Posted by ArtTheWino 7 years ago
I wish it were that easy to contradict the House/Senate Joint Economics Committee.
Posted by mongoose 7 years ago
You can't compare the changes in percentages of GDP. Tax policy affects GDP. If you have a 50% tax rate, then you will have 50% of the GDP. If you have a 100% tax rate, you will have 100% of the GDP. The GDP will be little over 0, but that's beside the point. You need to recognize that tax policy actually affects the GDP, so you have to check during which eras the GDP increased more. It is clear that it increased more during the tax-cut areas that the tax-increase eras.
Posted by ArtTheWino 7 years ago
Oh, and wjmelements, there are many things that typify the American Liberal that I am against, such as welfare and Medicare/Medicaid.
Posted by ArtTheWino 7 years ago
brian, I am libertarian in that I am classically progressive. I am a firm advocate of maximum civil rights to everyone, however I disagree with the conservative standby of tax cuts, for the reasons I stated.
Posted by wjmelements 7 years ago
I'm not that familiar with the history of tax cuts. I'd have to do research.
Posted by I-am-a-panda 7 years ago
Wjm, before you jump in, Ireland didn't in the end work out.
Posted by wjmelements 7 years ago
The approach is easy. Just find one point in history where a tax cut worked, and the resolution is negated.
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