The Instigator
InterrogatorMaster
Con (against)
The Contender
Squirrelkid94
Pro (for)

The United States should abolish the Capital Gains Tax.

Do you like this debate?NoYes+1
Add this debate to Google Add this debate to Delicious Add this debate to FaceBook Add this debate to Digg  
Debate Round Forfeited
InterrogatorMaster has forfeited round #3.
Our system has not yet updated this debate. Please check back in a few minutes for more options.
Time Remaining
00days00hours00minutes00seconds
Voting Style: Open Point System: 7 Point
Started: 4/9/2018 Category: Economics
Updated: 1 month ago Status: Debating Period
Viewed: 265 times Debate No: 112542
Debate Rounds (4)
Comments (0)
Votes (0)

 

InterrogatorMaster

Con

I proudly negate the resolution Resolved: The United States should abolish the capital gains tax.

Framework: Economic benefits. J.D. Foster from the Heritage Foundation states the one overarching goal of tax reform is achieving a stronger economy. Since this is a tax reform resolution, prefer economic impacts.

Our sole contention is political conflict

Subpoint A: Unpopularity
Frank Newport from Gallup News in April 2017 finds more than six in 10 average Americans believe upper-income households pay too little, and as a result Vanessa Williamson from the Brookings Institute in September 2017 state tax cuts for businesses and the upper class are extremely unpopular. In January 2012, Scott Clement of the Washington Post finds 52% of Americans believe the capital gains tax is not high enough, and are against tax cuts for the rich. As a part of their campaign promises, Daniel J. Mitchell from International Liberty in March 2017 writes Democrats advocate for higher capital gains tax rates, and view lower capital gains taxes as a loophole for the wealthy.

Subpoint B: Midterms
Brent Budowsky from The Hill in November 2017 states the precedent-setting unpopularity of the recent GOP tax bill is likely to cause a landslide victory for Democrats in midterms, and Clare Foran from the Atlantic in November 2017 predicts the Democrats will win both the Senate and the House of Representatives in the upcoming election. David Rogers from Politico in December 2017 finds Democrats are already talking about repealing and replacing big pieces of the Republican overhaul.

Impacts:
Danny Vinik from Politico writes in November 2017 contrary to what Republicans state, the GOP tax plan is likely to make taxes even more complicated, and forcing Democrats to reinstitute the capital gains tax the affirmative is trying to abolish and change the Republican tax bill leads to an even worse over-complication of the tax system.

Chris Edwards from Time News in April 2016 outlines two negative impacts of a complicated tax system:
Increased avoidance and evasion: We see that the US has the most complex corporate tax code in the world. As a result, people exploit loopholes which spawns fraudulent return filing of taxes.
Undermines financial planning: The complex tax code affects financial decision making of American families, for example with retirement savings and payments on education.

MJ Lee from CNN in January 2017 finds repealing bills like Obamacare in Congress is difficult and time-consuming, which leads to serious gridlock and waste of congressional time. By overcomplicating the tax code with an additional bill the Democrats will repeal, the Affirmative exacerbates congressional gridlock.

Jonathan Weisman from the New York Times in July 2013 outlines 2 negative impacts of gridlock:
Drop-Dead Dates: On January 1st of 2013, Congress couldn"t meet their deadlines and let a payroll tax cut expire, increasing taxes for virtually all workers until Congress could finally get around to fixing the bill. With more gridlock, we see more missed deadlines and more mistakes like this being perpetuated.
Case Clog: With more gridlock comes less policies, and less policies means fewer issues being dealt with in a timely manner. The slower our Congress moves, the less long and short-term issues that they can deal with, which means less beneficial policies like healthcare, social security, education, emergency services, etc.

Although the affirmative advocates for abolishment of the capital gains tax, we only see the tax being re-implemented after the Democrats win the midterms. The impact of this bureaucracy is a more complicated tax code and increased congressional gridlock.

The capital gains tax is a political issue: let"s talk politics.
Squirrelkid94

Pro

We affirm. Resolved, the United States should abolish the Capital Gains Tax.

Framework: Economic benefits outweigh all others

Our sole argument is small businesses
Forbes Magazine in 2017 reports that small businesses are the backbone of the American economy, as they make up 99% of all firms and over half of the employment. Abolishing the capital gains tax would help small businesses in two ways.

First, it encourages Venture Capitalism
Specifically, Kai Ryssdal17 of Emory University explains that venture capitalists specialize in small business investment as they"re willing to take risks by investing in young firms. As a result, Ryssdal finds that over 20% of US Small Businesses are funded by venture capitalists.
Conversely, for high growth start-ups, Mohendra Gupta of Stanford University explains that venture capitalists are important because they ensure long-term investments and better opportunities for future funding.
Unfortunately, Ernst Young in 2015 of the Alliance for Savings and Investment reports that the capital gains tax discourages venture capitalism funding due to the high costs for a small reward.
Ultimately, abolishing the capital gains tax is key to increasing venture capitalism as Paul Gompers14 of Harvard University explains that a 1 percent decrease in the capital gains tax increases venture capitalism by 3.8 percent.

Second is through reducing investment abroad
Diana Roth15 of the Manhattan Institute explains that high capital gains tax rates encourage the flow of investment outside of the US and into foreign markets.
Accordingly, Todd Mason14 of the American Enterprise Institute finds that the United States has a capital gains tax rate over 10% higher than the OECD average.
In fact, James Jackson17 of the Congressional Research Service concludes that investment abroad increased 4.5 times more under the high taxes of Obama compared to the low taxes of Bush.
Fortunately, Eric Toder12 of the Brookings Institute finds that by abolishing the capital gains tax, the United States would become a more desirable location for small businesses because it would give them a fair competitive stance in the market against the current big businesses.

Supporting small businesses is important because it creates jobs.
Phil Krepen95 of the Institute for Policy Innovation finds that historically, small business growth has surged during times of low capital gains taxation.
Increasing the growth of small businesses is imperative for job growth as David Robinson17 of Duke University explains that previously missed attempts at funding small businesses could provide for 85,000 new jobs annually.
Accordingly, Michael Mazerov16 of the Center for Budget for Policy and Priorities reports that small business jobs are critical as they"re historically more sustainable and longer lasting.
Karen Campbell of the Heritage foundation thus finds that repealing the capital gains tax will send a strong signal that the US is open for business.
For all these reasons I am incredibly proud to affirm.
Debate Round No. 1
InterrogatorMaster

Con

The order will be my opponents case then mine.
Starting with framework, recognize that we're solving into their frame also. While their framework only recognizes benefits, we solve for both harms and benefits. Prefer our because we're linking into both ours and theirs.

Start off with their first sub-point about Venture Capitol:
5 response to this,
-First: They lack a warrant As Huang from the Center on Budget and Policy Priorities concludes that there is no direct link between aggregate economic performance and capital gains tax rates. He furthers that in the last 50 years, there has been no statistically significant correlation between CGT rates and GDP growth. Their analysis is either warrantless or purely speculative.
-Second: Cutting the tax rate is a bad way to boost the economy
The Federal Tax Policy Center explains that because these tax cuts will benefit the rich. This is problematic, though, because the rich are much more likely to save rather than spend their money " limiting any economic growth stimulus. They further that the best way to grow the economy is to funnel money to people who spend it more such as low-income households. If anything, cutting the CGT is counter-productive.
-Third: Turn, as cutting the CGT will hurt economic growth
The IMF concludes that any increases in income inequality will hurt a nation"s potential for growth. They explain that improving equality also improves efficiency " leading to more sustainable long-term growth.
-Fourth: De-link them. Savings does not rise with a tax cut.
The Century Foundation explains that there has never been a quantifiable link between a lower CGT and higher savings. In fact, when the CGT rate decreased by 13% from 1987-2003, household savings actually steadily fell.
-Fifth: De-link again as Tax Cuts has no effect on high-risk investment
The National Venture Capital Association reports that only 10% of people that invested in venture capital funds were individuals or families who might owe capital gains taxes.

Now onto their investment abroad:
Many problems with this,
-First: The overall economic impact of reducing investment is small. William Gale of the Brooking Institute explains that capital gains cuts would raise saving and investment, but not by much. Capital gains taxes are a small part of all taxes on saving and investment, much investment would be unaffected because it is financed with debt or supplied by pension funds, non-profit institutions, and foreigners who do not pay capital gains taxes in the first place. As a result, conventional estimates suggest that cutting the top gains rate to 20 percent would raise private investment by less than
0.1 percent of GDP. Even that modest gain could be erased if the tax cut increases the deficit, causing interest rates to rise.
-Second: Cutting capital gains taxes won"t induce growth. As Dean Baker of the New York Times explains that Demand for increased investment is low.We do have a problem of a weak labor market, with employment rates for prime age workers (ages 25-54) still well below their pre-recession levels, but this is a problem of inadequate demand in the economy. There is little reason to believe that if we generated more demand through larger government deficits or smaller trade deficits we would not have more jobs.
-Third: In the 1980s, for instance, Ronald Reagan actually raised taxes on investment income -- and the economy did very, very well. George W. Bush's capital gains cuts, however, did not lead to such a strong economy. Tax expert Len Burman has graphed capital gains rates and economic growth and found no relationship at all.

Then on Creating more jobs:
-First: Turn, because the different distribution of the $1bn will affect the economy and jobs. If the money finds its way to those on low incomes, there will inevitably be higher aggregate spending, more jobs and quitesimply a stronger economy. And if the income distribution continues to be skewed to those on low incomes, there will be a lift in the growth potential of the economy. Un-employment would be structurally lower and there would be a self-supporting cycle of stronger activity as a result.

Now on my case.

Going on my sole contention,
Extend my whole Unpopularity sub-point because 52% of Americans believe the capital gains tax is not high enough, and are against tax cuts for the rich. Make the Affirmative show you how this will pass.

Now onto my Midterms subpoint, extend all arguments because the precedent-setting unpopularity of the recent GOP tax bill is likely to cause a landslide victory for Democrats in midterms. Once again, it doesn't look like it will pass.

Now the political conflict leads to multiple impacts of gridlock:
First, is with more gridlock, we see more missed deadlines and more mistakes like this being perpetuated.With more gridlock comes less policies, and less policies means fewer issues being dealt with in a timely manner. The slower our Congress moves, the less long and short-term issues that they can deal with, which means less beneficial policies like healthcare, social security, education, emergency services, etc. Although the affirmative advocates for abolishment of the capital gains tax, we only see the tax being re-implemented after the Democrats win the midterms. The impact of this bureaucracy is a more complicated tax code and increased congressional gridlock.

Therefore, I am proud to negate.
Squirrelkid94

Pro

The order will be framework, opponents case then mine.
Both of us are utilizing an economic framework, therefore vote on economic issues.

Start off with their first subpoint about Unpopularity. We have 2 responses.
First, acknowledge that their entire first subpoint bases itself on taxes in general, we are debating capital gains taxes. Therefore making any warrant or card they read about popularity essentially worthless because they aren't addressing the actual issue of the topic. We aren't arguing that we abolish all income tax, we are arguing that we abolish the economically harmful capital gains tax.
Next, there is no impact to this. Sure, every American wants increased taxes on the rich. But our entire case has no focus on the ultra-rich. It talks about the ordinary small businesses that make up most of the jobs. We solve better for the average citizen, therefore, making any of their arguments about popularity essentially worthless.
Therefore; you can turn this popularity point because by helping millions in need, especially small buisnesses, we actually gain more popularity because of this.

Let's go their second subpoint about the Midterms. We have 2 responses.
First, their entire warrant relies on the fact of the GOP Tax bill is unpopular. Considering as Business Insider reports in 2018 has a favorability rating of 63% with the American people, this is just plain false. Not to mention, this argument isn't topical because it's not talking about the CGT, just the GOP Tax bill.
Second, they are excessively optimistic about the "blue wave". As TexasMonthly tells us in 2018 any claim of a democratic wave across house and senate really has no impact. Marginal increases within Democratic voters do not translate into the claim they put forth.

Now, let's go to their impacts.
Their first impact is about a complicated tax code. We have 3 responses.
First, their warrant doesn't apply. Again, we are not debating the GOP tax plan. Unless you can read a card saying abolishing a capital gains tax is the same as the GOP Tax Plan that released a couple months ago, their entire case essentially falls.
Second, even if we were debating the GOP Tax plan, this isn't true. As the Heritage tells us in 2018 the proposed plan would vastly simplify the tax code by eliminating a host of unnecessary and inefficient provisions designed to benefit special interests. Therefore, any impact is plainly untrue.
Third, even if you buy into their complicated tax code, it's nonunique. As NPR explains in 2015, every tax code so far has been filled with complicated rhetoric and provisions, so unless we see their impacts in the squo they just aren't there.

Their second impact is about gridlock.
First, recognize this talks about a overcomplicated tax code. We have already debunked that above.
Second, gridlock is normal. A simple tax reform bill won't do anything compared to Washington's Democratic mess,
especially since FIAT would allow the affirmative to do it anyway. Make them show you how a capital gains tax specifically would cause these host of issues because they don't.

Now let's go back to my case.
Extend our first piece of evidence that Forbes Magazine notes in 2017: small businesses are the backbone of the American economy, as they makeup 99% of all firms and over half of the employment. Therefore, our impacts have a farreaching impact on the Economic Status and livelihood of America.

Extend our subpoint about Venture Capitalism because we have an extremely logical link: Ernst Young in 2015 of the Alliance for Savings and Investment reports that the capital gains tax discourages venture capitalism funding due to the high costs for a small reward.
Paul Gompers of Harvard University also tells us that a 1 percent decrease in the capital gains tax increases venture capitalism by 3.8 percent. That's extremely important because as we read in case 20$ of Small Businesses are funded by venture capitalists.

Extend our point about investment. As Eric Toder tells us in case, if we want to be any competition within the world economy, we have to support our small businesses. We can only do that by abolishing this dreadful tax. Investment is key, and on the world stage, as Todd Mason tells us, we have 10% higher than the OECD average.
As Aneel of MIT tells us by increasing jobs availability we immediately help those in need, especially those in poverty.

Our impact is jobs; jobs are key because they create a sustainable and longer lasting economic powerhouse within the USA. Vote on jobs, vote on lives, vote neg.
Debate Round No. 2
This round has not been posted yet.
This round has not been posted yet.
Debate Round No. 3
This round has not been posted yet.
This round has not been posted yet.
Debate Round No. 4
No comments have been posted on this debate.
This debate has 2 more rounds before the voting begins. If you want to receive email updates for this debate, click the Add to My Favorites link at the top of the page.