The Instigator
thomas.g
Pro (for)
Losing
3 Points
The Contender
bthr004
Con (against)
Winning
25 Points

Tax cuts are not necessarily good for the economy.

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Voting Style: Open Point System: 7 Point
Started: 5/28/2008 Category: Politics
Updated: 9 years ago Status: Voting Period
Viewed: 808 times Debate No: 4247
Debate Rounds (3)
Comments (6)
Votes (8)

 

thomas.g

Pro

Tax cuts can hurt an ecnomomy. The mantra that tax cuts will stimulate the economy is unfounded. Some of our best times were under high taxes.
bthr004

Con

I am new to this site, and I like it!
I am not really clear on your stance on the position of tax cuts being good or bad for the economy,.. i believe it is the "not necessarily," bit that make your platform weak. Is it good or is it bad?
Surely you dont believe, that you can tax a country into prosperity? I know that if the people do not have the solvency to pay the tax than the government must understand that taxing will only cripple an already damaged citizen.
And you are just not specific enough on your stance or your direction on the topic, like the time of bliss we had under higher taxes.
Name that time... I dont recall it. You ideas of "great times" may not be that of another.
Less governent + less spending = lower taxes
Debate Round No. 1
thomas.g

Pro

My main point it that even very high tax leves can be beneficially. During WWII and the 50s we had very high marginal rates but the economies were good.

It seems that there is general belief that tax cuts are almost always good which is not the case.
bthr004

Con

Here is the problem, you are trying to fix the sink, when its the drain thats broken.

Again,.. think about this, if we cut government spending, govt. programs, limit govt. we can maintain lower taxes while stimulating and strengthening the economy!

There were two tax cuts in the Bush terms. The smaller began in mid 2001 and was phased in over time. The larger came in mid 2003. The effects were quite dramatic. By July of 2004 GDP growth had jumped from 1.8% to 5.4%, business investment jumped over 10 times and employment growth was also up a factor of 10. The good news was that supply side economics really worked. Tax revenues increased steadily from 2003 right up to the present as the table below shows:

Total Federal Revenues in Billions
2000..........$2,025
2001..........1,991
2002..........1,853
2003..........1,782
2004..........1,880
2005..........2,153
2006..........2,407
2007..........2,568
2008 est. 2,521 before new rebates

The deficit grew right along because Congress let the spending grow even faster.

To kill the tax cuts, that is greatly raise taxes as the two Democratic candidates aren't oppose to, can be expected to have the opposite and dramatic results of less GDP growth, less business investment, higher employment and less total revenue. This would really put pressure on Congressional spending and a much faster growing deficit.

Be careful what you wish for.
Debate Round No. 2
thomas.g

Pro

"" The deficit grew right along because Congress let the spending grow even faster. ""

Any stimulus was caused by deficit spending.

During the Clinton years the deficit was reduced and tax rates raised and the economny was good.

Why didnt Bush veto the excessive spending?

And again in the 40s and 50s marginal tax rates were enormous but great econ gains
bthr004

Con

The Clinton Tax Defense

A growing body of literature and experience indicates that higher taxes are associated with a smaller economy. It is generally axiomatic that the more one taxes something, the less there is of the item taxed.

There is surely no reluctance among proponents to argue that higher taxes on tobacco materially reduce tobacco consumption or that higher taxes on energy would appreciably reduce energy consumption. Yet, somehow, the argument persists that raising taxes on labor does not diminish the supply of labor or that raising taxes on capital does not appreciably reduce the amount of capital in the economy. In both cases, tax hikes weaken the economy and reduce the amount of income earned by American families.

The Clinton defense of higher taxes rests largely on a cursory review of the economic history of the 1990s. Whatever the theoretical debates, the proof, as they say, is in the pudding: President Clinton raised taxes, yet the economy grew, and grew smartly in the latter half of the 1990s. Economists have occasionally been accused of seeing something work in practice and then proving that it cannot work in theory. However, this is not the case here.

History suggests that the economy performed reasonably well in the years immediately following the tax hike, but history is not causality, and history sometimes needs a more careful examination to tell its story faithfully. Following the tax hike, the economy performed reasonably well, but not as well as one would expect given the conditions at the time. The real economic boom came later in the decade, just when the economy should have slowed as it made the transition from a period of recovery to normal expansion. Further, this acceleration coincided to a remarkable degree with the 1997 tax cut.

Contrasting the period immediately after the tax hike and the period immediately after the tax cut, the evidence strongly suggests that the tax hike likely slowed the economy as traditional theory suggests, and that it was the tax cut that gave the economy renewed vigor--and gave history the real 1990s boom. In other words, the Clinton defense of higher taxes does not hold up.
Debate Round No. 3
6 comments have been posted on this debate. Showing 1 through 6 records.
Posted by HandsOff 8 years ago
HandsOff
Reagan had it right on taxes, just as JFK did. But we paid for the Reagan tax cuts dearly. The republicans bought the democratss support fo the cuts by agreeing to fund their spending addiction. That's a representative democracy-- nobody benefits from politicians fully appeasing one another.
Posted by bthr004 9 years ago
bthr004
And dont forget the smaller economy in the carter years, when ag commodities dwindled do the rural mortgage crisis, and ag inflation that nearly crippled this nations AG industry.
Posted by uncle_sherm 9 years ago
uncle_sherm
I'd like to point out that the economy was not good during WWII. We were still in the depression, and the only reason unemployment had been reduced was because the surplus labor was in uniform overseas fighting in the war. The 50's "boom" was fed by cheap energy and the fact that we were the only major power untouched by the war. This came to an end in the 1970s, and was only revived when Reagan's tax cuts helped start the capital investment and current technology and economic boom that we continue to enjoy today.
Posted by HandsOff 9 years ago
HandsOff
Whether tax cuts are good for the economy or not, they are good for the individual getting them. Since the tax code is so unfair and oppresive, that is reason enough.
Posted by LakevilleNorthJT 9 years ago
LakevilleNorthJT
In my mind, this was a clear victory by con.
Posted by bthr004 9 years ago
bthr004
I hope my point got across,.. certainly not defending the Bush lack of vetos and poor spending but the do nothing democrats absolutely have nothing to go of! As far as the history lessons go it shows us higher taxes only did not hurt us when the economy was considerably smaller.
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Vote Placed by bthr004 8 years ago
bthr004
thomas.gbthr004Tied
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Vote Placed by uncle_sherm 9 years ago
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