The government should cut taxes for everyone including the wealthy
Debate Rounds (3)
I argue that my opponent's argument would make sense if we weren't over 16 trillion dollars in dept.  The first priority should be reducing that debt through a combination of spending cuts and tax hikes. While my opponent argues that raising the tax rates further would decrease productivity, the lowest revenue-maximizing rate estimate is between 32.67% and 35.21%.  Current total effective tax rates lie at around 23.9%, so there is still plenty of room for an increase.  Considering that the interest on the federal debt is now the fifth largest budget expidenture, coming in at about $265 billion , and that it is expected to rise to almost $1 trillion by 2022 , it seems prudent to minimize it as quickly as possible.
Let me rebut each of your arguments one by one. My oppenent's arguments are in bold.
Cutting taxes for everyone would make sense if we weren't in over $16 trillion in debt
The government should significantly cut taxes but also significantly cut spending and close loopholes and deductions for the wealthy. This way the tax cuts will not add to the deficit and the revenue will increase once people spend more money busineeses make more money and hire more employees. At first when taxes are cut the revenue will decarese immediately. Once the economy starts improving the revenue will start to increase and the tax cut will eventually pay for itself. The government should raise some short term revenue by eliminating tax breaks for the wealthy. If the government cuts taxes and cuts spending significantly then the deficit will not increase.
The first priority should be reducing the deficit through a combination of spending cuts and tax hikes
The government ought to reduce the deficit by significantly cutting spending but they should not raise taxes at all. The problem with raising taxes is it hurts the economy. If taxes are raised then people will have less money, they will spend less and businesses will make less money because people won't spend as much money. If busineeses make less money than they will pay less tax dollars so the revenue start to decrease. If businesses make less money they will also lay off employees. Tax hikes only raise revenue short term.
Another thing I want to point out is that tax cuts have improved th economy in the past. Ronald reagan significantly cut taxes and the economy improved. Unemployment was 7.5 percent when reagan first took office and it went down to 5.3 percent by the end of his presidency. Bill Clinton cut taxes in 1997 and the economy was prosperous by the end of his presidency and there was a budget surplus. George W. Bush cut taxes in 2001 and 2003 and the economy improved but it eventually declined because of the housing market collapse. Some of the tax cuts that improved the economy added to the deficit because the government did cut spending enough to make up for the tax cut that's why tax cuts need to be implemented wiith spending cuts and some short term revenue.
Tax hikes kill jobs. If the government raises taxes on anyone including the rich then businesses will make less money and will lay off employees. The best way to deal with the deficit is to cut taxes and government spending significantly.
Tax cuts will pay for themselves/Tax hikes will reduce revenue:
My opponent restates his argument from round one that tax cuts will pay for themselves through increased revenue. This is the idea behind the Laffer curve: that as tax rates increase the amount of taxes can collected can decrease due to decreases in poductivity. The maximum on the laffer curve is the tax rate at which the largest amount of tax revenue is achieved, taking into account my opponents point. I adressed this by citing both a study on the Laffer curve and current tax rates to show that we are not yet at that point. In other words, increasing tax rates at this point will still increase revenue, while decreasing tax rates will still decrease revenue. In order for a decrease in tax rates to ellicit an increase in tax revenues we would have to have a tax rate higher than the maximising revenue point, which we do not by any metric that I could find. The argument that increased tax rates would lower revenue is debunked in the same manner.
Estimate on the maximising revenue point: http://www.sciencedirect.com...
Current rates: http://www.sciencedirect.com...
Past decreases in tax rates lead to economic expansion:
This point is not in contention. My point is that debt, if allowed to grow, will stifle such expansion by consuming an ever increasing section of GDP as interest. I have also shown that my opponent's arguments about the relationhip between tax rates and tax revenues to be specious. Unless he can present a credible study which estimates the maximising revenue point at a level lower than current tax rates, or somehow debunks the validity of the laffer curve in a way which supports his argument then he has failed to address my main point.
Spending cuts alone would suffice:
To simply stop the debt from growing would require about $1,200,000,000,000 ($1.2 trillion) in cuts. This amounts to 35% of all federal spending, and is required just to break even. The IMF recommends a 35% reduction in spending coupled with a 35% increase in taxes. Not only does this actually have chance of getting passed in congress, it spreads the damage across a wider area instead of focusing it only on the public sector, as spending cuts would.
superkamal26 forfeited this round.
1 votes has been placed for this debate.
Vote Placed by 1Devilsadvocate 3 years ago
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Reasons for voting decision: F.F.
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