The Instigator
sansskelepun
Pro (for)
The Contender
jchen1041
Con (against)

The United States Should Abolish The Capital Gains Tax

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Debate Round Forfeited
jchen1041 has forfeited round #3.
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Voting Style: Open Point System: 7 Point
Started: 1/29/2018 Category: Politics
Updated: 5 months ago Status: Debating Period
Viewed: 1,899 times Debate No: 107219
Debate Rounds (3)
Comments (1)
Votes (0)

 

sansskelepun

Pro

The United States of America should lower or even abolish the capital gains tax.

round 1: state your side and points
round 2: rebuttals
round 3: conclusion

Here's why we need to lower or completely abolish the capital gains tax, capital gains tax impose costs on the economy, capital gains taxes make capital investments more expensive, and capital gains taxes reduce the return that entrepreneurs and investors receive.
jchen1041

Con

Capital gains should be taxed in full as they are earned, not when realized. Capital gains are income, not really different in substance from interest, rents, and royalties: other kinds of capital income that are taxed as ordinary income.

Reducing/Abolishing Capital gains negatively affects the economy

The difference in tax rates between capital gains and other income is a prime factor behind individual income tax shelters. Since ordinary income is taxed at rates up to 35 percent while long-term capital gains are taxed at a maximum rate of 15 percent, there is a 20 percent reward for every dollar that can be transformed from high-tax compensation, say, to lowtax capital gains. The basic idea is to make an investment that generates deductions, such as for interest, lease

Thus, the lower tax rate on long-term capital gains produces several distortions: (1) It encourages investments purely for tax purposes that would not make any sense without the tax savings, draining capital away from other more productive investments. (2) Since tax shelters that can pass legal muster or escape detection tend to be extremely complex, brilliant financial planners, 5 lawyers, and accountants turn their talents to this lucrative, but socially unproductive line of work. (3) Similarly, the enormous tax savings available likely lure too many highly productive people into the private equity business, drawing them away from other potentially more socially valuable enterprises.

Lower capital gain rates enables the oversize financial sector to wield enormous influence on the U.S. economy. It encourages corporate executives to take stock-based compensation, because it"s taxed more lightly than the same amount of salary income would be. This practice encourages executives to obsess over short-term stock-market performance at the expense of the long-term success of the corporation.

Increasing rates will decrease inequality

In 2016, for example, nearly 76 percent of all capital gains went to households earning more than $1,000,000, according to estimates by the Tax Policy Center. And 96.2 percent of the households in the top 1 percent of the income distribution are white. Preferential treatment for capital gains meant that the federal government forewent $109.5 billion in taxes in 2016, a giveaway second only to the tax exclusion for employers" contributions to employees" health plans.

If capital gain tax rates were raised, then the rich will be taxed their fair share. More money will be given to the government, which will allow more social programs to be implemented that will aid the poor in supporting their family and improving the American economy in general since more money also translates into more importing, exporting, production,etc.
Debate Round No. 1
sansskelepun

Pro

All I really have to say is that my opponent sure has a lot of information and data yet zero sources to back up their authenticity.
jchen1041

Con

Many of these explainations are common sense based on a simple analysis of the economy currently and in the past. If my opponent wants sources, then I am happy to list them below.

https://www.finance.senate.gov...

https://www.ineteconomics.org...

https://www.dissentmagazine.org...

https://www.americanprogress.org...

I do have several other sources, but I don't deem it necessary to list all of them since these articles cover all of the main points I have gone through.
Debate Round No. 2
sansskelepun

Pro

To be completely honest I was not expecting to win this debate my main intent was to get con's side. I've been trying to look it up online and all I could find was why it should be abolished. So thank you for joining this debate and for giving me a new insight and some good information on the topic.
This round has not been posted yet.
Debate Round No. 3
1 comment has been posted on this debate.
Posted by WOLF.J 5 months ago
WOLF.J
Can you tell me what flat tax is brother?, I'm not sure what it is.
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