The Instigator
harry523
Pro (for)
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0 Points
The Contender
jvedane
Con (against)
Tied
0 Points

The United States should prioritize tax increases over spending cuts

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Voting Style: Open Point System: 7 Point
Started: 1/11/2013 Category: Economics
Updated: 3 years ago Status: Post Voting Period
Viewed: 2,466 times Debate No: 28825
Debate Rounds (4)
Comments (3)
Votes (1)

 

harry523

Pro

Hi, I am doing a public forum debate in February and I hope to get some practice, help, comments, and/or suggestions. I would really appreciate if someone will accept this debate. Round 1 is for accepting, Round 2 is for posting opening arguments, Round 3 is for Rebuttals, and Round 4 for closing arguments. Hope to hear from someone soon.
jvedane

Con

I stand in firm negation of the resolution, Resolved: The United States should prioritize Tax increases over spending cuts.

I offer the following definiton
Spending Cuts- the act of reducing the current amount that the United States Federal Govenment is spending.

Contention 1- Taxmageddon
On January 1, 2013, a $494 billion wave of tax hikes will take effect, hitting every American household, regardless of income. Here"s how much taxes will rise for five different demographic groups according to the Heritage Foundation this year. For families, there will be a $4, 138, 5.9% tax increase. The baby boomers will take a $4, 223, 4% income tax increase. Low income workers will see a $1,207 , 4.7% income tax increase. But even this fails to measure the real impact of Taxmageddon starting January 1. It"s that most of the tax increases will be borne by small business owners, the ones most responsible for job creation. In an analysis of the Vice-presidential debates, two other analysts Curtis Dubay and Romina Boccia, explain: "The businesses that would pay the higher tax rates proposed by President Obama earn almost all the income earned by small businesses that employ workers. According to President Obama"s own Treasury Department, these job creators earn 91 percent of the income earned by flow-through employer-businesses." These are the biggest, most successful small businesses. They employ more than half the private workforce, according to an Ernst and Young study. Raising their taxes would destroy more than 700,000 jobs. The Tax Policy Center agrees, calculating that Taxmageddon isn"t a tax on the rich " it will impact 96 percent of all middle income taxpayers.

Contention 2- Macroeconomic impacts of taxes
In a report this year by Dr"s. Robert Carroll and Gerald Prante with the US Chamber of Commerce, we see the many Long-run macroeconomic impact of increasing tax rates on high-income taxpayers in 2013.
"Through lower after-tax rewards to work, the higher tax rates on wages reduce work effort and labor force participation. The higher tax rates on capital gains and dividends increase the cost of equity capital, which discourages savings and reduces investment. Capital investment falls, which reduces labor productivity and means lower output and living standards in the long-run.
Output in the long-run would fall by 1.3%, or $200 billion, in today's economy. Employment in the long-run would fall by 0.5% or, roughly 710,000 fewer jobs, in today‟s economy. Capital stock and investment in the long-run would fall by 1.4% and 2.4%, respectively. Real after-tax wages would fall by 1.8%, reflecting a decline in workers‟ living standards relative to what would have occurred otherwise.
These results suggest real long-run economic consequences for allowing the top two ordinary tax rates and investment tax rates to rise in 2013. This policy path can be expected to reduce long-run output, investment and net worth.

Contention 3- Taxation slavery

Robert Nozick, Professor of Philosophy @ Harvard University states distributive justice involves appropriating the actions of other persons. Seizing the results of someone's labor is equivalent to seizing hours from him and directing him to carry on various activities. This process whereby they take this decision from you makes them a part owner of you; it gives them a property right in you. Slavery is a set of circumstances whereby one person is forcibly used to serve the purposes of another person and has no legal claim to the fruits of his labor. The average American worker toils from Jan. 1 to the end of April and has no legal claim to the fruits of his labor for that period and governments, through the tax code, take what he produces. A taxpayer has a moral claim to all of his honestly acquired income. This claim is stronger than that of any other individual or group. Adding the words "state" or "society" to the claims of others does not change this situation in any relevant sense.

Contention 4- Tax Hikes harm the economy
subpoint A) Jobs
Fact: Tax hikes, especially those he espouses, hurt jobs.
Buffett cites periods when tax rates were high and says that "Under those burdensome rates," employment "increased at a rapid clip."
This country has an employment problem right now, and tax rates aren"t even as high as Buffett wants. The tax increases President Obama champions would hit small businesses that create jobs. According to Treasury figures, 1.2 million Americans who employ people are paying their taxes through the individual income tax, and they would be hit head-on. A study by Ernst and Young estimates that these tax hikes would kill 710,000 jobs.

subpoint b) Investing
Fact: Any time you tax something, you get less of it.
Buffett says: "So let"s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if"gasp"capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities."
When you tax something more, people do less of it. This is how taxes work. It doesn"t change because the behavior being taxed is investing rather than smoking.

Subpoint C) Revenue to pay down deficit
The problem is government spending, not government revenue.
Buffett says, "Our government"s goal should be to bring in revenues of 18.5 percent of [gross domestic product] and spend about 21 percent of G.D.P." In 2025, the big three entitlements will gobble up a full 18.5 percent of GDP"the entire amount of revenue that Buffett would like to raise. The revenue generated by these tax increases are only $82 billion dollars a year in extra revenue when the federal deficit in fiscal 2012 was $1.1 Trillion. So even if Mr. Obama gets his way, his tax increase would only cut the deficit by about 7.5%. And that assumes the tax increase would have no impact on economic growth.
Debate Round No. 1
harry523

Pro

Framework: My partner and I affirm the resolution.
Resolved: The United States should prioritize tax increases over spending cuts.
Observations-
1. The resolution implies that either spending cuts or tax increases must be undertaken as a means of reducing the deficit to ensure long term economic prosperity.
2. Growth in the economy is necessary for long term deficit and debt reduction

Criteria-
The side that best reduces the deficit while promoting growth is the side that will best ensure the long term prosperity of the United States and thus should win the debate.

An IEEE (Institute of Electrical/Electronic Engineers) guideline offers a very good definition: The word should is used to indicate that among several possibilities one is recommended as particularly suitable, without mentioning or excluding others; or that a certain course of action is preferred but not necessarily required; or that (in the negative form) a certain course of action is deprecated but not prohibited (should equals is recommended that).
From Google:
1.Used to indicate obligation, duty, or correctness.
2.Indicating a desirable or expected state.

Prioritize: From Google: Designate or treat (something) as more important than other things
1.Determine the order for dealing with (a series of items or tasks) according to their relative importance.

Tax Increase:
From Google: the amount by which taxes are increased
Simply put, a tax is a compulsory payment given to the government. Most commonly, the tax is levied as a percentage of income (money earned through working, investments, etc) or some purchase of goods or services. A tax increase is the amount by which the taxes are increased. So, if we assume the tax in question is the U.S. federal income tax, the only way that tax can be increased is to increase the percentage levied against incomes. Once again, this is the prima facia meaning in the resolution: a tax increase is an increase in the rate (percentage paid) of the federal income tax.
Spending Cuts: From Google: (spending cut) the act of reducing spending. wordnetweb.princeton.edu/perl/webwn

"Wealthy" defined by paying at largest marginal tax rate. This kicks in at $250,000 annual income.
Contention 1
US should increase taxes on the wealthy
"http://online.wsj.com...
"ET
"CBO: 'Fiscal Cliff' Could Trigger Recession

The Wall Street Journal November 8, 2012, 7:10 p.m. ET

Contention: Avoiding spending cuts will save jobs and promote growth
But the CBO said that U.S. gross domestic product would increase by 0.4% and employment by 400,000 in the fourth quarter of 2013 if lawmakers avoid $55 billion in defense spending cuts required next year by the earlier debt deal. A similar boost in growth and employment would occur if the $55 billion in cuts to other domestic spending is avoided, CBO added.

Analysis: Since deficit reduction and long term prosperity require both economic growth and and low unemployment, avoiding spending cuts is clearly the right thing to do.
Contention 2

No compelling evidence exists that tax increases are bad for the economy
EVIDENCE SUGGESTS THAT CLAIMS THAT HIGHER TAXES WILL KILL JOB GROWTH IN THE SMALL BUSINESS SECTOR IS DISPROVEN WITH RECENT DATA-Van de Water et al '11

In fact, CBO and others have long concluded that tax increases used to reduce budget deficits can improve long-term economic growth and job creation. The evidence also shows that deficit-financed tax cuts reduce long-term growth: CBO projects that, over the longer term, extending the 2001 and 2003 tax cuts without paying for them would reduce economic growth and national income. [19]

Analysis: Not only do tax increases not harm employment or growth, but when those revenues are used to reduce deficits, the taxes actually promote both employment and growth. Conversely, extending tax cuts will only reduce growth and prosperity.
In a time of economic downturn, tax increases are better policy than cutting spending

TAX INCREASES ARE GOOD POLICY DURING A RECESSION-Johnson et al '09
Contrary to what some consider common wisdom, a tax increase can be good policy during a recession. Tax increases are a better option than deep spending cuts " better both for families already suffering due to the recession and for state economies. Tax increases can be designed in such a way that they impose relatively little or no costs on the most vulnerable families; this can be done, for example, by targeting the increase on households with the highest incomes or
on profitable corporations. Analysis: Tax increases are the most moral approach because they can be targeted in such a way as to ensure that the most vulnerable aren't harmed.

TAX POLICY AIMED AT THE VERY AFFLUENT CAN MEAN INCREASING REVENUES WITHOUT ADVERSE IMPACT TO THE ECONOMY-Johnson '10

"The more that the tax increases or transfer reductions are focused on those with lower propensities to consume (that is, on those who spend less and save more of each additional dollar of income), the less damage is done to the weakened economy. Since higher-income families tend to have lower propensities to consume than lower-income families, the least damaging approach in the short run involves tax increases concentrated on higher-income families.
jvedane

Con

I stand in firm negation of the resolution, Resolved: The United States should prioritize Tax increases over spending cuts.

I offer the following definiton
Spending Cuts- the act of reducing the current amount that the United States Federal Govenment is spending.

Contention 1- Taxmageddon
On January 1, 2013, a $494 billion wave of tax hikes will take effect, hitting every American household, regardless of income. Here"s how much taxes will rise for five different demographic groups according to the Heritage Foundation this year. For families, there will be a $4, 138, 5.9% tax increase. The baby boomers will take a $4, 223, 4% income tax increase. Low income workers will see a $1,207 , 4.7% income tax increase. But even this fails to measure the real impact of Taxmageddon starting January 1. It"s that most of the tax increases will be borne by small business owners, the ones most responsible for job creation. In an analysis of the Vice-presidential debates, two other analysts Curtis Dubay and Romina Boccia, explain: "The businesses that would pay the higher tax rates proposed by President Obama earn almost all the income earned by small businesses that employ workers. According to President Obama"s own Treasury Department, these job creators earn 91 percent of the income earned by flow-through employer-businesses." These are the biggest, most successful small businesses. They employ more than half the private workforce, according to an Ernst and Young study. Raising their taxes would destroy more than 700,000 jobs. The Tax Policy Center agrees, calculating that Taxmageddon isn"t a tax on the rich " it will impact 96 percent of all middle income taxpayers.

Contention 2- Macroeconomic impacts of taxes
In a report this year by Dr"s. Robert Carroll and Gerald Prante with the US Chamber of Commerce, we see the many Long-run macroeconomic impact of increasing tax rates on high-income taxpayers in 2013.
"Through lower after-tax rewards to work, the higher tax rates on wages reduce work effort and labor force participation. The higher tax rates on capital gains and dividends increase the cost of equity capital, which discourages savings and reduces investment. Capital investment falls, which reduces labor productivity and means lower output and living standards in the long-run.
Output in the long-run would fall by 1.3%, or $200 billion, in today's economy. Employment in the long-run would fall by 0.5% or, roughly 710,000 fewer jobs, in today‟s economy. Capital stock and investment in the long-run would fall by 1.4% and 2.4%, respectively. Real after-tax wages would fall by 1.8%, reflecting a decline in workers‟ living standards relative to what would have occurred otherwise.
These results suggest real long-run economic consequences for allowing the top two ordinary tax rates and investment tax rates to rise in 2013. This policy path can be expected to reduce long-run output, investment and net worth.

Contention 3- Taxation slavery

Robert Nozick, Professor of Philosophy @ Harvard University states distributive justice involves appropriating the actions of other persons. Seizing the results of someone's labor is equivalent to seizing hours from him and directing him to carry on various activities. This process whereby they take this decision from you makes them a part owner of you; it gives them a property right in you. Slavery is a set of circumstances whereby one person is forcibly used to serve the purposes of another person and has no legal claim to the fruits of his labor. The average American worker toils from Jan. 1 to the end of April and has no legal claim to the fruits of his labor for that period and governments, through the tax code, take what he produces. A taxpayer has a moral claim to all of his honestly acquired income. This claim is stronger than that of any other individual or group. Adding the words "state" or "society" to the claims of others does not change this situation in any relevant sense.

Contention 4- Tax Hikes harm the economy
subpoint A) Jobs
Fact: Tax hikes, especially those he espouses, hurt jobs.
Buffett cites periods when tax rates were high and says that "Under those burdensome rates," employment "increased at a rapid clip."
This country has an employment problem right now, and tax rates aren"t even as high as Buffett wants. The tax increases President Obama champions would hit small businesses that create jobs. According to Treasury figures, 1.2 million Americans who employ people are paying their taxes through the individual income tax, and they would be hit head-on. A study by Ernst and Young estimates that these tax hikes would kill 710,000 jobs.

subpoint b) Investing
Fact: Any time you tax something, you get less of it.
Buffett says: "So let"s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if"gasp"capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities."
When you tax something more, people do less of it. This is how taxes work. It doesn"t change because the behavior being taxed is investing rather than smoking.

Subpoint C) Revenue to pay down deficit
The problem is government spending, not government revenue.
Buffett says, "Our government"s goal should be to bring in revenues of 18.5 percent of [gross domestic product] and spend about 21 percent of G.D.P." In 2025, the big three entitlements will gobble up a full 18.5 percent of GDP"the entire amount of revenue that Buffett would like to raise. The revenue generated by these tax increases are only $82 billion dollars a year in extra revenue when the federal deficit in fiscal 2012 was $1.1 Trillion. So even if Mr. Obama gets his way, his tax increase would only cut the deficit by about 7.5%. And that assumes the tax increase would have no impact on economic growth.
Debate Round No. 2
harry523

Pro

harry523 forfeited this round.
jvedane

Con

jvedane forfeited this round.
Debate Round No. 3
harry523

Pro

harry523 forfeited this round.
jvedane

Con

jvedane forfeited this round.
Debate Round No. 4
3 comments have been posted on this debate. Showing 1 through 3 records.
Posted by Dominomac 3 years ago
Dominomac
Personally I believe that the fiscal issue can not be solved using only one direction, (tax increases or spending cuts) One can argue that tax increases or spending cuts can have harmful impacts on the economy. The main reason the "bush tax cuts" were implemented was at the time we were running a surplus and it was decided the best coarse of action would be to "redistribute" that wealth. Well, the surplus is long gone due to a number of reasons, (no one person's fault). In a more direct comment, this is an interesting question over what should be prioritized, there needs to be spending cuts and there needs to be revenue increases. For instance a study in Illinois found that roughly one third of business filed no income tax because they were exempt using loop holes, not just small business but ones making a profit in the millions. Also the amount of money spent in the military needs to be reduced, no reason to spend more then the next 20 country's combined, unless we were going to war against the entire planet. There must also be entitlement reform and cuts.
Posted by Loathomar 3 years ago
Loathomar
harry523 is painfully wrong on so much, it would seem he should not debate. The Taxmageddon did not happen, as Obama and the congress came to an agreement to extend the Bush Tax cuts to 99% of American. There is a 2% payroll tax increase, but that was only because Obama had a temporary 2% payroll tax decrease as a big part of stimulus package.
There are other problems but I give up with fact change everything and spitted to the end. But "In 2025, the big three entitlements will gobble up a full 18.5 percent of GDP" is a complete lie. According to even the ultra conservative foundation Heritage; SS, Medicare, Medicaid, Obamacare and CHIP, will reach 15% GDP by 2037 if nothing was down before then and working with the highest assumed costs for each.
Posted by jvedane 3 years ago
jvedane
Hey, just go ahead and ignore my opening Arguments. Post your case in round 2 and i will repost it after that and we can continue with the debate format which you originally proposed.
1 votes has been placed for this debate.
Vote Placed by OhioGary 3 years ago
OhioGary
harry523jvedaneTied
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Reasons for voting decision: What happened guys? We were going along and then stopped after R2. When we quote sources from E&Y, the Tax Policy Center, or anywhere else, provide a link and/or the reference. I won't go around searching to find the data you've referenced. Bring that to the debate for us. Tie all around for mutual forfeit.