The US should reform its Corporate Tax
Debate Rounds (4)
In this debate, I will argue that the American corporate tax rate should be reformed and lowered in order to benefit the economy and the government.
Round 1: Acceptance only
Round 2: Present arguments
Round 3: Refute opponent's arguments
Round 4: Make final cases/refutations and conclusion
The United States of America should absolutely not reform its corporate tax rate beacause the current tax rate provides 9% of all of the total USA gouvernment revenue. The proposed tax reform would obviously lower that, for lowering it would not alter the ammount of companies that have reside in the USA or have their assets there or very little so, for the USA coprorate taxes could not rival those of other countries and dependencies such as the British Virgin Islands or Panama beacause lowering the corporate tax to that level would cripple the economy given that the American economy is much larger than that of those places. Lowering the corporate tax to lower rates would not work for these countries would still have the advantage and very few more companies would put their seats there and at the very most this would maintain USA corporate tax revenue the same as it is now.
Regarding loopholes, the law should not be corrected beacause that would require changing the whole US tax code. These reforms would take years to pass beacause said text is a very extensive one and it would cause massive political problems in the USA for this would be subject to much disagreement for the two parties and by that time companies will have found loopholes in the new texts and they would have to start over.
Really? You can't read the rules of the debate? (sigh)
Well, here's my case.
During the late 1970s, economist Arthur Laffer gave his name to the Laffer curve. The concept has existed before. Treasury Secretary Andrew Mellon came up with the the hypothesis of scientific taxation that lower rates generates higher revenues for the federal government. When the rate is higher, economic expansion and production is discouraged. In this case we are talking about the wealth of businesses who will grow less with a higher rate because they have to move more capital to taxation. When the tax rate is small, more capital is used on the business itself. The business grows and there is more corporate profits. More profits means more revenue for the corporation and that means more revenue for the federal government through a lower tax rate.
Companies Move Overseas
Pfizer, the largest drug maker in the US, recently announced that it is moving its legal address to the UK because of the lower corporate tax rate. It is likely other businesses will the follow. The UK corporate tax rate is set to approach 20% by 2015. The current US corporate tax rate is 35% and that is a 15% difference for their profits. The US needs to lower its corporate tax rate in order to keep more businesses and gain more for the United States. As simple 10% cut from 35% to 25% puts on level with other nations. This will increase the competition of the American economy. At the same time, eliminating loopholes allows us to get more revenue from them.
1. Laffer, Arthur. "The Laffer Curve: Past, Present, and Future." The Heritage Foundation.
2. Giobanetti, Tom. "As Capital Flees, England is Texas, and the U.S. is California." RealClearMarkets.
Moreover it would be quite unlikely for foreign companies to go to the US, for still a 20% corporate tax rate, although slightly lower than the EU average (21.34) would not be very attractive since that would require that the companies from the EU, whom I guess might be some potential targets of the movement move their legal residences to the US and that would exclude them from the EU subsidies. It would be very unlikely for target companies to be from the third world since the tax rates there are already pretty low or at the very least the tax codes are full of loopholes.
Subsidies are not good because that is crony capitalism. Also, remember that WE want businesses here for our own county and for our own economy. We want to eliminate deductions and put in a lower rate because businesses want higher profits, not lower ones. By creating business friendly environment in the USA we fix that problem. I have already sourced how it would be good for the government and the economy, so I have the facts out there. You still need to prove your points or else your case risks falling apart.
daltonslaw forfeited this round.
1 votes has been placed for this debate.
Vote Placed by Subutai 2 years ago
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