The Instigator
BobTurner
Pro (for)
Winning
13 Points
The Contender
Mr.sarcastic
Con (against)
Losing
0 Points

Taxes on the Rich should be Increased

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Post Voting Period
The voting period for this debate has ended.
after 2 votes the winner is...
BobTurner
Voting Style: Open Point System: 7 Point
Started: 3/18/2014 Category: Economics
Updated: 2 years ago Status: Post Voting Period
Viewed: 957 times Debate No: 49403
Debate Rounds (3)
Comments (4)
Votes (2)

 

BobTurner

Pro

Definitions:

Rich: Top 2 percent

Structure

Round 1:
Pro: Rules
Con: Opening Arguments

Round 2:
Pro: Opening Arguments
Con: Rebuttal

Round 3:
Pro: Rebuttal
Con: "No round, as agred upon"


Note: Con cannot post an argument in Round 3 because doing so will allow him or her an extra argument. If Con does not comply with this rule, he or she will forfeit all 7 points to me.

Forfeitting will be an automatic 7-point loss.

Mr.sarcastic

Con

I believe the rich, the top 2 percent as you defined, are already doing their part in society with their tax rate of 40%. Considering that the top 10% paid over 70% of the total amount collected in federal income taxes in 2010 [1], I would not be complaining. This does not count towards millions of dollars donated to charities and other organizations. Most of the rich got where they are by hard work. They do not deserve to be taxed more simply because they were more successful in life. They do their part as they should. They should not have to pay more just because someone else cannot. That is completely unfair. The wealthy already pay the large majority of taxes, why make them pay for all of it?

Thank you for this debate and good luck to my opponent for his or hers opening arguments.

[1] http://money.cnn.com...
Debate Round No. 1
BobTurner

Pro


There is no evidence that tax cuts create jobs. There is an extensive academic literature on this subject, and it all lends itself to the same conclusion: tax cuts are not conducive to growth, but is to income inequality and middle class stagnation.



First, let’s discuss the reality of the current state of taxation in the United States.



Andrew Fieldhouse of the Economy Policy Institute, in examining post WWII tax rates, noted this observation (1):



Since the end of World War II, U.S. top individual income tax rates have declined markedly, as have effective tax rates on corporate income, capital income, and inheritances. Consequently, the federal tax code has become much less progressive (Piketty and Saez 2007). The top statutory marginal tax rate has fallen from just over 90 percent in the 1950s, to 70 percent in the 1970s, to 50 percent in the mid-1980s, to 35 percent for most of the past decade (TPC 2013a). The taxable income cutoff above which the top rate is applied for married joint filers has also fallen precipitously, from roughly $3 million in the early 1950s (adjusted to 2012 dollars), to roughly $1 million in the early 1970s, to just $388,350 for 2012 (TPC 2013b).


The overall decline in progressivity is most striking within the top income percentile: The effective tax rate for the top hundredth of a percentile (i.e., 99.99–100 percent of filers by income) has fallen by more than half, from 71.4 percent in 1960 to 34.7 percent in 2004, versus a decline for the 99.5–99.9 percentiles from 41.4 percent in 1960 to 33.0 percent in 2004 (Piketty and Saez 2007).


To elucidate this piece, here are his conclusions:



1. Tax rates, which ranged from 70 to 91% in the first three decades of the post-WWII era, have fallen substantially.


2. Effective rates on corporate income, capital gains, and estate taxes have fallen as well.


3. The tax code, with time, has become increasingly less progressive.





We also have data telling us that the tax systems in most states are regressive – that is, a disproportionate portion of the burden is falling on lower-income people – as many states move away from progressive income taxes in favor of sales taxes (2).




At the same time, corporations are getting giant breaks. Not only are they low by historic standards, as Thomas Hungerford points out (3); the nonpartisan Citizens for Tax Justice conduced an extensive study (4) of 288 Fortune 500 companies over a 5 year period, and came to the following conclusions:




  1. 1. 111 companies, including GE, Exxon, and Boeing paid negative tax rates.

  2. 2. One third paid no federal income tax less than 10 percent over the period.

  3. 3. The average tax rate was only 19.4%.

  4. 4. 55 of the 288 companies enjoyed several years of new taxes, with a total of 203 years of no taxes.




So, now we have examined the evidence as to the current state of taxation. Let’s review:




  1. 1. Many states have regressive tax burdens.

  2. 2. The very affluent have seen their tax rates at near historic lows – in spite of significant growth in the post-WWII era with significantly higher tax rates – and are enjoying significant breaks on the backs of the U.S. taxpayer, who have been forced to shoulder the burden.

  3. 3. Corporations are receiving unheard of breaks.





So, we know that the essence of trickle-down economics is already in play: taxes are already low. What are the results, however, of these breaks?




Let’s go back to Andrew Fieldhouse, whose study concluded this:



Analyses of top tax rate changes since World War II show that higher rates have no statistically significant impact on factors driving economic growth—private saving, investment levels, labor participation rates, and labor productivity—nor on overall economic growth rates.




Interesting. But what about the Laffer Curve, conservatives may ask? Is there not a point beyond which the government simply cannot raise taxes lest it loses revenue? Of course there is. But what is that rate, and are we anywhere near it? Fieldhouse addresses this, as well:



Recent research implies a revenue-maximizing top effective federal income tax rate of roughly 68.7 percent. This is nearly twice the top 35 percent effective marginal ordinary income tax rate that prevailed at the end of 2012, and 27.5 percentage points higher than the 41.2 percent rate in 2013.This would mean a top statutory income tax rate of 66.1 percent, 26.5 percentage points above the prevailing 39.6 percent top statutory rate…. Historically, decreases in top marginal tax rates have widened inequality of both pre- and post-tax income.




Emmanuel Saez and Nobel Laureate Peter Diamond also weighed in as to what the effective tax rate ought to be, and concluded that the optimal tax rate on high-income Americans would be 70% (5).




We also have data from a 65-year study from the Congressional Research Service (6). Here is their conclusion:



Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. The share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession.




For more on income inequality, let’s go to Robert Reich (6):


During periods when the very rich took home a larger proportion — as between 1918 and 1933, and in the Great Regression from 1981 to the present day — growth slowed, median wages stagnated and we suffered giant downturns. It’s no mere coincidence that over the last century the top earners’ share of the nation’s total income peaked in 1928 and 2007 — the two years just preceding the biggest downturns.


And, for a bit more, let’s go to Nobel Laureate Joe Stiglitz, who cites World Bank economist Branko Milanovic (7):



From 1988 to 2008, Mr. Milanovic found, people in the world’s top 1 percent saw their incomes increase by 60 percent, while those in the bottom 5 percent had no change in their income. And while median incomes have greatly improved in recent decades, there are still enormous imbalances: 8 percent of humanity takes home 50 percent of global income; the top 1 percent alone takes home 15 percent. Income gains have been greatest among the global elite — financial and corporate executives in rich countries — and the great “emerging middle classes” of China, India, Indonesia and Brazil.




But how bad is income inequality? Let’s ask Stiglitz:


Last year [2012] the top 1 percent of Americans took home 22 percent of the nation’s income; the top 0.1 percent, 11 percent. Ninety-five percent of all income gains since 2009 have gone to the top 1 percent. Recently released census figures show that median income in America hasn’t budged in almost a quarter-century. The typical American man makes less than he did 45 years ago (after adjusting for inflation); men who graduated from high school but don’t have four-year college degrees make almost 40 percent less than they did four decades ago.



So, there is certainly a moral argument at play: the middle-class has stagnated since the 1980s – the rise of Ronald Reagan, and the inception of the supply-side economics experiment we’ve been experiencing for about 34 years now. But what are the economic effects of income inequality? Should we be worried that income inequality is constraining the economy?



Yes, says Stiglitz again. He makes the following four arguments:



1. Income inequality will lead to underconsumption, as the rich spend relatively smaller portions of their income than poor people due to the diminishing marginal returns of income.


2. Income inequality leads to a waste of human talent, as the non-affluent cannot access high-quality education as readily as rich people.


3. Income inequality gives way to financial crises.


4. Income inequality lowers tax receipts.





And we also know that income inequality in the United States, coupled with social mobility, is significantly lower than it is in Europe. We know that countries in Europe – Finland, Germany, Norway, et al. – and even the U.S. in the three decades post-WWII had higher tax rates, more government investment, less income inequality, and more growth as a result. European countries also beat the U.S. on health, life expectancy, happiness, economic mobility, etc.






Conclusion:


The evidence is overwhelming, and there isn’t much time to waste. Supply-side economics is a fantasy.



Sources:


1. http://www.epi.org...


2. http://www.itep.org...


3. http://www.epi.org...


4. http://www.ctj.org...


5. http://pubs.aeaweb.org...


6. http://robertreich.org...


7. http://opinionator.blogs.nytimes.com...













Mr.sarcastic

Con

After reading your eloquent barrage of information, I hope you do realize that you went off subject sir. The topic was about the rich, individuals, having increased tax rate. You simply cannot compare oranges to apples as you did with individuals to companies.

At a suggested 70% tax rate, by a FRENCH economist, how many of the wealthy Americans would stay in this country? None!

You have gone off subject many times. From income inequality to company tax breaks, it has nothing to do with increased tax rates on rich American individuals and their families.

I felt when reading your opening arguments that it sounded like a typical episode of MSNBC Evening News.

I wish opponent good luck.

P.S. April 15th is just around the corner.
Debate Round No. 2
BobTurner

Pro

All my arguments have been dropped. I'd like to point that out for the voters. My opponent hasn't taken any time whatsoever to critically consider my arguments. I'll respond to his nevertheless.

First, I'll offer my rebuttals to his first argument.

I believe the rich, the top 2 percent as you defined, are already doing their part in society with their tax rate of 40%.

Many of them are not paying this rate, as I pointed out earlier -- and rates have dropped substantially for the very affluent in recent years.


Considering that the top 10% paid over 70% of the total amount collected in federal income taxes in 2010 [1], I would not be complaining

My opponent is obfuscating, and using this as a way to display his one and only source. This is completely irrelevant. We are talking about the top 2%, not the top 10%.

Also, even if we were talking about the top 2% -- who, indeed, pay a fairly high percentage of the federal income tax, though not even close to 70% -- we have to bear in mind that payroll taxes, sales taxes, user fees, property taxes, etc. hurt middle-income and poor people more than they do rich people. State systems are highly regressive, as I pointed out. My opponne thas not responded to that argument.

Most of the rich got where they are by hard work. They do not deserve to be taxed more simply because they were more successful in life.

The first sentence is a bare-assertion fallacy -- where's your source? Many rich people did get there by hard work, while some got their based on fraud and abuse and cheating the system -- e.g., Wall Street.

The second statement is a distortion and a strawman. You cannot point to a time where I said, "Tax the rich because they've been successful." Taxes are not punitive. They are the price we pay for a civilized society, as Oliver Wendell Holmes Jr. put it. They're part and parcel of the social contract, whereby we all agree to sacrifice a bit of our freedom to collectively invest and provide for people. This statement is also rubbish when we consider that state systems are regressive. You seem to have no problem whatsoever with tax systems that disportionately hit poor people, but cringe at the idea that the rich may need to pay higher rates -- when their rates are lower than they've been historically (another argument you dropped).

They do their part as they should. They should not have to pay more just because someone else cannot. That is completely unfair.

What's their part? This statement is completely ludicrous and subjective. Many are paying rates lower than they have historically, with many -- Warren Buffett and Mitt Romney as good examples -- paying lower rates than middle-income households.

Your second statement is ridiculous. The fact that corporations are getting such large breaks is the exact reason why middle-income and lower-income people have been paying more -- to pick up the tab for the welfare-queen corporations. When Bobby Jindal proposed eliminating the state income tax in Virginia, he wanted to replace it with a regressive sales tax -- thus tossing the burden from the rich to the poor.

No, distributing the burden to the already stagnating middle class is unfair. Perpetuating debunked trickle-down lies is unfair. Evading taxes and hiding money in the Cayman Islands to avoid taxes is unfair. Paying a lower tax rate than a middle-income people when you're a multiomillionaire or billionaire is unfair. Politicians lstening to the billionaire Koch Brothers when they should be serving the people -- only because the Koch Brothers are exceptionally large donors -- is unfair. Your argument is unfounded.


The wealthy already pay the large majority of taxes, why make them pay for all of it?

Majority of what taxes? The federal income tax? They earn a majority of the income -- the top 1% owns 20% of total income, relative to 10% in 1980 -- so of course they're going to pay the "majority of taxes" in dollars. Who said anything about making them pay for all of it? That's a complete strawman. Middle-income and poor people pay a diproportionate percentage of their income in regressive payroll and sales taxes et al.



After reading your eloquent barrage of information, I hope you do realize that you went off subject sir. The topic was about the rich, individuals, having increased tax rate. You simply cannot compare oranges to apples as you did with individuals to companies.

Actually, that's what you did when you mentioned the top 10 percent.

Here's what I addressed, all of which you droppped:

1. Taxes are already lower than they've been historically, and the income has thrived in times where taxes where high, so there is no sound economic argument for raising taxes.
2. Tax cuts do not create jobs.
3. Tax cuts lead to income inequality.
4. Income inequality is hindering the recovery.

All of these were on-topic and relevant. That you failed to understand them, and thus did not respond to them, sounds more correct.


At a suggested 70% tax rate, by a FRENCH economist, how many of the wealthy Americans would stay in this country? None!

Why does it matter at all that Emmanuel Saez is French? Peter Diamond, who co-authored the paper, is American. Even your most insigificant statements are being reduced to rubbish.

Also, good job making a completely baseless, unsourced, factually inaccurate statement for which their is no evidence. I'd provided you plenty of data saying otherwise -- data saying the top marginal income tax rate could be significantly higher than it is now, and it turns out, people would still want to continue to produce and procure wealth. The "peak of the Laffer curve," as the piece from Fieldhouse points out, ranges from about 73% to 80% depending on whose research you follow. The point is, there is no evidence for your argument whatsoever, nor have you provided the slightest modicum of sourcing or critical thinking.


You have gone off subject many times. From income inequality to company tax breaks, it has nothing to do with increased tax rates on rich American individuals and their families.

This is complete rubbish, as I already pointed out.

I felt when reading your opening arguments that it sounded like a typical episode of MSNBC Evening News.

And reading your arguments sounded like a typical episode of Fox News. Hey, at least my statements included facts and analysis.


I wish opponent good luck.

Same to you!

P.S. April 15th is just around the corner.


Cool beans.


Conclusion:
My opponent does not have a single credible argument on the table. I have eviscerated his arguments point by point and reduced them to utter rubbish.

Vote Pro.
Mr.sarcastic

Con

I haven't taken any time to respond critically? Last time I checked, 30 minutes is by no means enough time.

How is mentioning how much the wealthy paid in taxes irrelevant? At least I truly stayed on topic.

I would love to meet someone who would pay 80% in taxes.

Also, I cited from CNN...not Fox News.

It's not a matter of taxing the rich more. It's a matter of waste in tax money by the government.
I dare mention this, since it's considered off topic.

Vote Con!
Debate Round No. 3
4 comments have been posted on this debate. Showing 1 through 4 records.
Posted by AizenKnaik 2 years ago
AizenKnaik
I think it is necessary to increase the tax of the rich because basically their 'being rich' is giving them the capability to contribute more to the economy and social welfare. On the contrary, I would disagree with this because even if they could contribute more to the economy, there is still no certainty that they would benefit from what they've contributed. So technically, they're just wasting away their money in that sense. For the purpose of practicality, the tax payer who are the rich ones should be able to see the good effects of their 'contributions', may it be visually or figuratively.

This is pretty much a very interesting topic to discuss with. God bless to the two of you!
Posted by BobTurner 2 years ago
BobTurner
The rules said that Con could not post an argument in R3. But he did. Please vote Pro!
Posted by BobTurner 2 years ago
BobTurner
Hahahaha dude I compared him to Fox and then just read your comment. Great minds think alike?
Posted by Hematite12 2 years ago
Hematite12
Lol...... Bobturner, you should just make your next argument saying that your opponent sounds like Fox News. Since it's basically the only thing Con said in his entire post that had any meaning.
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by Actionsspeak 2 years ago
Actionsspeak
BobTurnerMr.sarcasticTied
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Total points awarded:70 
Reasons for voting decision: As the rules say, all seven points go to Pro.
Vote Placed by 1harderthanyouthink 2 years ago
1harderthanyouthink
BobTurnerMr.sarcasticTied
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Total points awarded:60 
Reasons for voting decision: Conduct violation awards 1 point, not 7. However Pro gave better arguments and many more sources. So he'll still get 6 points.