The Instigator
wjmelements
Pro (for)
Winning
50 Points
The Contender
Tatarize
Con (against)
Losing
30 Points

The welfare and progressive tax systems are less preferable than...

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Post Voting Period
The voting period for this debate has ended.
after 13 votes the winner is...
wjmelements
Voting Style: Open Point System: 7 Point
Started: 4/27/2009 Category: Politics
Updated: 7 years ago Status: Post Voting Period
Viewed: 4,063 times Debate No: 7996
Debate Rounds (4)
Comments (14)
Votes (13)

 

wjmelements

Pro

....the following flat negative income tax system:
(The resolution has a character limit. Please include the end in the resolution).

"The following negative income tax system":
=There is a fixed income line
=For every dollar an individual makes above the line, that individual pays a certain percentage
=For every dollar an individual makes below the line, that individual receives a certain percentage

*Example*
Baseline: $50,000 per year
Percentage: 25%
-An individual making $50,000 will pay no taxes
-An individual making $250,000 will pay $50,000 in taxes
-An individual making $10,000 will receive $10,000 on tax day

*Example*
Baseline: $30,000
Percentage: 50%
-An individual making $30,000 will pay no taxes
-An individual making $130,000 will pay $50,000 in taxes
-An individual making $10,000 will receive $10,000 on tax day

On the contrary, with a progressive tax system and a welfare system, an individual is put into an income bracket, in which he/she pays a percentage of their whole income. An individual may qualify for welfare if he/she does not make above a certain amount.

*Example*
Tax brackets:
$0 - $35,000: 0%
$35,001 - $65,000: 25%
$65,001 - $150,000: 35%
$150,001 - $250,000: 40%
$250,001 - (up): $50%

Welfare brackets:
$0 - $15,000: $15,000
$15,001 - $30,000: $5,000

-A person making $14,000 will pay $0 in taxes and then receive $15,000 in welfare
-A person making $300,000 will pay $150,000 in taxes and then receive $0 in welfare

*Example*
Tax Brackets:
$0 - $45,000: 0%
$45,001 - $75,000: 15%
$75,001 - $150,000: 40%
$150,001 - $250,000: 60%
$250,001 - (up): 70%

Welfare Brackets:
$0 - $25,000: $10,000
$25,001 - $35,000: $5,000

-A person making $20,000 will pay $0 in taxes and receive $15,000 in welfare
-A person making $250,000 will pay $150,000 in taxes and receive $0 in welfare.
----------------------------------------------------------------------------------------------------

So, it is easy to see that there is a "before" amount and an "after" amount of money.
I have done my best to construct a table displaying such tendencies:

__________Neg. 1____Neg. 2____Prog. 1____Prog. 2
$00,000___$12,500___$15,000___$15,000___$10,000
$10,000___$20,000___$20,000___$25,000___$20,000
$20,000___$27,500___$25,000___$25,000___$30,000
$30,000___$35,000___$30,000___$35,000___$35,000
$40,000___$42,500___$35,000___$30,000___$40,000
$50,000___$50,000___$40,000___$37,500___$42,500
$60,000___$57,500___$45,000___$45,000___$51,000
$70,000___$65,000___$50,000___$45,500___$59,500
$80,000___$72,500___$55,000___$52,000___$48,000
$90,000___$80,000___$60,000___$58,500___$54,000
$100,000__$87,500___$65,000___$65,000___$60,000

$150,000__$125,000__$90,000___$97,500___$90,000
$160,000__$132,500__$95,000___$96,000___$60,000

$250,000__$200,000__$140,000__$150,000__$100,000
$260,000__$207,500__$145,000__$130,000__$78,000

$1,000,000_$762,500__$515,000__$500,000__$300,000

Forgive the underscores, but the website would not let me put more than two spaces next to eachother.
----------------------------------------------------------------------------------------------------
It is quite obvious that having individual percentage brackets are quite silly.
When someone knows, such as in the second progressive example, that they will make just as much if they make $150,000 than if they make $300,000, then they will strive to make less, as making less is easier than making more.

Wage is the result of the value of one's labor. One strives to make his/her labor more valuable so that he/she can make more in wage and spend this wage on the products of the labor of others. This strive leads to many things:
-Innovation
-Efficiency
-More work
-More Production

When such benefits are created in society, then the following effects are spread throughout the whole of society:
-Cheaper goods
-More goods
-More wealth
-Better goods

As demonstrated in the table above, a negative income tax system has similar benefits as the combination of the progressive income tax and welfare systems. A major difference is that in all cases, there is a greater motivation to have valuable labor, as such labor does not result in an increased percentage of taxation (leading to less wealth actually ending up into an individual's hands despite that individual producing more), but to more wealth being produced for the individual worker.

With more motivation to produce, the worker shall produce more efficiently, thus resulting in more revenue for the government and more wealth for society.

Therefore, the negative income tax system is preferable to the progressive tax system.

(Economic Source: An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith. Outline: http://www.econlib.org...)
(Taxation Reference: http://www.acronymfinder.com...-(NIT).html)
Tatarize

Con

Yeah, no.

Flat tax systems are not a benefit over progressive taxes. The people most able to pay taxes pay the most taxes. A flat rate above the specific line is not helpful. We've had the taxes like this for a long time and there's absolutely no evidence that people try to earn less money because additional money will be taxed at a higher percentage. The more money they make, the more money they make.

You did the brackets wrong as well. You pay the tax within that bracket for that money. The money made in the next bracket is paid at the higher rate. If you earn 250,001 dollars and the new bracket starts at 250,000, you pay 1 dollar at the higher tax rate. At no time is it ever not in somebody's best interest to make more money.

Further, the people making the most aren't that hard working, innovative, efficient, or productive and offering them more money isn't going to make them any more of those things. The idea that everybody is paid their worth is frankly wrong, a number of people are paid millions upon millions of dollars for doing considerably less work than a blue collar worker and less innovative than an average R&D person.

Flat taxes don't work. They are just a massive tax cut on the massively rich. The idea that somebody really works 1000 times harder than a person making 30 thousand because they earn 30 million and that if we tax that person at 30% rather than 50% they will do 20% more is absurd.

The bracket system is fairly simple and straightforward. Switching that bracketed system into a single bracket doesn't make it better, it just makes the topmost bracket pay significantly less taxes.

Make no mistake, you're proposing a middle-class tax hike that will take in less money over all, during a recession. It's the worst of every world.
Debate Round No. 1
wjmelements

Pro

I thank my opponent for accepting this debate.
-------------------------
CONCESSION:
"You did the brackets wrong as well."
I concede that I did the brackets wrong. I just came upon a source verifying this (http://www.encyclopedia.com...). I apologize for a little misunderstanding.

What remains then left for me to argue that people should not pay a higher percentage for making more.
------------------------------
Specific arguments:

"We've had the taxes like this for a long time and there's absolutely no evidence that people try to earn less money because additional money will be taxed at a higher percentage."
I.E., I've never seen England so it must be ugly.

"Further, the people making the most aren't that hard working, innovative, efficient, or productive and offering them more money isn't going to make them any more of those things. The idea that everybody is paid their worth is frankly wrong, a number of people are paid millions upon millions of dollars for doing considerably less work than a blue collar worker"

Give me a solid example. In all cases of employment (save some labor union examples), people are paid less than they produce or are worth to the company. If a worker produces $30,000 in goods, than there is no reason for an employer to pay him more than that. Such a tendency would result in a net loss for the company. It just doesn't make sense.
Corporate executives are paid massive sums of money because they are worth more to a company than other individuals, as their decisions can result in net gains of billions of dollars or net losses of billions.

"and less innovative than the average R&D person."
I made the innovative claim as an argument that innovation is a way to make labor more productive (thus being one of the ways to increase the value of one's labor).

"Flat taxes don't work. They are just a massive tax cut on the massively rich."
From another perspective, progressive taxes do not work. They are just a massive burden on the investing class.

"The idea that somebody really works 1000 times harder than a person making 30 thousand because they earn 30 million and that if we tax that person at 30% rather than 50% they will do 20% more is absurd."
Actually, it's just a product of capitalism. In modern times, intellectual work is valued more than hard labor for a series of reasons (I'll mention if asked). It is not that one is working harder as much as it is that they are producing less.

For example, one could work hard labor for hours trying to dig a hole in their property. However, that does not make that hole nominally valuable, because there is no demand for it. The laborer has produced nothing ultimately.
In another example, a worker goes up to a road and spends hours destroying it. Ultimately, the value of that labor is negative, as it requires more labor to fix the situation. Without production, labor is worthless.

"Make no mistake, you're proposing a middle-class tax hike that will take in less money over all, during a recession."
Actually, the percentages could be adjusted so that no tax revenue is lost. It wouldn't be difficult.
------------------------
The MEAT AND POTATOES
"The people most able to pay taxes pay the most taxes."
As it is under both systems. It is, however, to a different degree.

Wage originates in the value of what is produced for the employer. People make more when they produce more or become more valuable. When people do such things to become more valuable (in their own self-interest), they do not owe their successes to society. People are not wealthy or unwealthy because they made others less wealthy, but because they produced or made themselves valuable. They do not owe this new surplus to society.

The negative tax system achieves the same purpose as welfare while replacing the progressive tax at the same time.

The negative tax is much simpler in that it combines two complicated systems into a less complicated one.

A flat negative tax is more economically ethical in that people's labor is not confiscated at a higher rate for being over a line.
------------------------------------------------------------------------------------------
I await your response.
Tatarize

Con

"I concede that I did the brackets wrong. I just came upon a source verifying this (http://www.encyclopedia.com......). I apologize for a little misunderstanding."

The given site does the brackets correctly. You cannot cite them to forgo your mistake.

-----

>>"I.E., I've never seen England so it must be ugly."

No. I.E. The English have always claimed the English country side is pretty so there's no reason to suppose that policy X has made the countryside ugly. You are making a clear and empirical claim that progressive taxation causes reduced desire to earn more money. In reality, there's no evidence for that at all because we have progressive taxation and there is no demonstrative desire to earn less money by anybody.

----

>>Give me a solid example.
http://money.cnn.com...
28 million dollars to help run a company into the ground.

Corporate executives are paid massive sums of money, not because of some extra inherent value, but because if more money can make any decision better made it pays for itself. If you can pay a top person 10 million and they make a bad decision that costs the company 20 billion, but had you paid 100 million for a top person who avoided that bad decision that extra 90 million paid for itself, at least that is the logic. Now, even if I were to accept this premise as entirely reasonable, it serves to bolster my case. As the flat tax is completely pointless to this run away pay issue.

This superpay is irrespective of the tax rate. If "company X is offering you 30% more than company Y", then company X is offering you more money. If this is the largest offer then that offer is the largest offer. An interesting thing happens when you vary the tax rate at this higher bracket: nothing. If you're required to pay 50% tax on that money rather than 30% tax, then "company X is offering you 30% more than company Y". Since the added money only serves to attract talent rather than pay for work product the only thing that matters is who pays the most, not how much the pay actually totals. You could tax it at 90% and it wouldn't harm any company's ability to attract such 'talent' because *ALL* companies would be subjected to the same taxation.

----

>>"I made the innovative claim as an argument that innovation is a way to make labor more productive (thus being one of the ways to increase the value of one's labor)."

It doesn't change the fact that the most innovative people are still pretty much blue-collar workers.

----

>>"Flat taxes don't work. They are just a massive tax cut on the massively rich."
>>From another perspective, progressive taxes do not work. They are just a massive burden on the investing class.

There's no need for "perspectives"; we have data. Dropping the taxes on the richest people does not encourage investment or spending. It does not bolster the economy in some sort of reverse-Keynesian economic trickle-down miracle. It doesn't work. Cutting taxes on the wealthy only causes them to become more wealthy. There are a number of reasons for this, one of which is over reliance on the pseudoscientific social Darwinist ideas that supposes the wealthy are wealthy because they are the best and the brightest and they can invest and keep the economy going. This isn't true. If all the wealthy people died all of a sudden, the economy would end up better off because of the sudden influx of capital. The rich aren't superintelligent business minded geniuses worth every penny. The greatest indicator of where you will end up in life is where you started in life. Most of the wealthy people were born wealthy. There's nothing remotely impressive, astounding, or special about the people who do the jobs their daddy gave them.

Even if you don't accept this is the case, you should still take a good look at the outcome of Trickle-Down economics which is a much more mellow version of this same general plan. Give the super-rich a massive tax cut and expect good things to happen. There are specific economic markers of good things and those things never happened. It was an abject failure. Even if you disagree with my suggested reasons, res ipsa loquitur, it's still clearly true because we've tried it and have data: it doesn't work.

----

>>Actually, it's just a product of capitalism. In modern times, intellectual work is valued more than hard labor for a series of reasons (I'll mention if asked). It is not that one is working harder as much as it is that they are producing less.

It certainly is. And, conceding that the person paid 1000 times more isn't actually doing 1000 times more work, giving him a 50% tax rather than a 20% isn't going to cause him to do 30% less work. In fact, it's going to cause him to do 0% less work. There is going to be no change in productivity and a massive change in the amount of taxes brought in. This speaks volumes about the efficacy of the progressive tax. We can tax people with the smallest impact on productivity if we tax the super-rich. Taxes on the middle-class and poor on the otherhand do directly impact how much they can buy and how much they produce.

----

>>"Make no mistake, you're proposing a middle-class tax hike that will take in less money over all, during a recession."
>>Actually, the percentages could be adjusted so that no tax revenue is lost. It wouldn't be difficult.

To make a flat tax take in as much taxes the current progressive tax model would require a massive tax hike on the middle-class, to counterbalance the massive tax cut you'd be giving to the richest of the rich. You'd be giving higher taxes to the people most affected by small differences in income to people who would be largely unaffected (their productivity is not a result of being paid 20 million vs 14 million).

------------------------

>>"Wage originates in the value of what is produced for the employer. People make more when they produce more or become more valuable."

This analogy does not work. In many of the cases where you'd be giving huge tax breaks, you'd be giving them TO the employer. We're often talking about people who own companies and the like. Further, we have already established that at these pay rates we're talking about people who aren't going to change their behavior because they earn 10 million or 7 million. Companies offering massive amounts of money to compete for the top talent are still just as competitive if everybody is dinged for 20% or 50% (no matter where you take the job, you still take the same hit).

You're trying to apply wage issues and middle-class logic to a problem that shares very little to do with the economics that allows one to work 20% more to make 20% more.

----

>>"People are not wealthy or unwealthy because they made others less wealthy, but because they produced or made themselves valuable. They do not owe this new surplus to society."

Economics is not zero sum, but that's been reduced to a trope that assumes that the wealthy are wealthy because they are *that* skilled. They are worth every penny? They aren't. We do not have a system where the cream always rises to the top. We have a system where the bottom are nearly always trampled and the upward mobility is at an all time low. Where the best indication of where you will end up in life is where you started it. The wealthy are the wealthy because they are the wealthy, that's all, not super-talented or super-smart. In general, they just got lucky enough to be born rich. Your tortured logic is wrong. And taxes aren't complicated. I file mine quite easily.

We are talking about people who don't "labor" and if you worry about "lines", I'd be happy to convert to a log scale. It would do the same as the brackets but progressively move with every dollar. Brackets are for simplicity sake. It could still be easily calculated with a single formula and still be progressive.
Debate Round No. 2
wjmelements

Pro

I thank my opponent for his response.
-----------------------------------------------
"I.E. The English have always claimed the English country side is pretty so there's no reason to suppose that policy X has made the countryside ugly"
Actually, one could contend that policy X has made it less pretty than it otherwise would have been.
--------------------------------------------
">>Give me a solid example.
http://money.cnn.com......
28 million dollars to help run a company into the ground."

Mulally was the new CEO, not the old one who lead the company into a $12.7 billion deficit.
Of the person who did create such the mess:
"Executive Chairman Bill Ford Jr., who had held the CEO post until Mulally was hired, had agreed in May 2005 not to receive any pay, bonus or stock grants until the company's core automotive operations returned to profitability." http://money.cnn.com...
Sorry. Bad example. I'll let you pick another.
---------------------------------
"You could tax it at 90% and it wouldn't harm any company's ability to attract such 'talent' because *ALL* companies would be subjected to the same taxation."
Society is not entitled to the worth of his labor just because it is above a certain amount.
----------------------------------------
">>"I made the innovative claim as an argument that innovation is a way to make labor more productive (thus being one of the ways to increase the value of one's labor)."

It doesn't change the fact that the most innovative people are still pretty much blue-collar workers."

Find a source for that claim.
Thomas Edison, who holds the record for the most patents held, was very wealthy, and worked as a telegrapher before he was an inventor. This was intellectual work, not hard labor. http://www.nps.gov..., scientists are not "blue-collar".
--------------------------
"If all the wealthy people died all of a sudden, the economy would end up better off because of the sudden influx of capital."
Actually, if all the doctors, lawyers, scientists, and entrepreneurs died, we'd be in quite a situation.
----------------------------
My opponent makes a series of attacks on "the rich". Whatever their relevance, the "data" that he refers to is on my side:
"The rising number of countries that have introduced a flat tax -- notably in Eastern Europe -- have generally seen their tax revenues rise, not fall as flat-tax opponents had predicted." http://online.wsj.com...
"The divide between rich and poor is widening in Germany" http://www.spiegel.de...
"The German tax system has undergone a comprehensive reform in the year 2001 and later in 2008. This reform is intended, in principle, to ease the actual rate of tax for both individuals and companies.
Taxation of an individual's income is progressive. In other words, the higher the income, the higher the rate of tax payable. In 2008 the Germany tax rates for an individual are 15% - 45%." http://www.worldwide-tax.com...

I await this "data" that my opponent talks so much about.
-------------------
"This speaks volumes about the efficacy of the progressive tax. We can tax people with the smallest impact on productivity if we tax the super-rich. Taxes on the middle-class and poor on the otherhand do directly impact how much they can buy and how much they produce."
Actually, the same truth lies with the middle-class (as under the negative tax, the "poor" receive similar protection). A slightly higher (or perhaps similar) tax would result in no less production from this "middle-class". The "rich" are less likely to work more should they lose millions but should someone in the middle class lose a few thousand, they would simply work a few more hours, ultimately contributing more to society.
And again, I insist that plenty of individuals classified as "rich" by my opponent are actually doctors, lawyers, scientists, and entrepreneurs.
I also remind the audience that having a flat tax ultimately helps the middle class as the business owners have more money with which to attract employees and expand business. With more demand for labor, benefits and wages increase.
-------------------------------
"To make a flat tax take in as much taxes the current progressive tax model would require a massive tax hike on the middle-class, to counterbalance the massive tax cut you'd be giving to the richest of the rich."
Actually, the percentages would be adjusted down, not up.
"President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation)." http://www.heritage.org...
-----------------------------------
"you'd be giving them TO the employer."
Actually, people accept jobs on terms of wage made before taxation. After a tax cut, the employer does not lower wages.
-------------------------------------
"They are worth every penny? They aren't."
They're actually worth more than every penny. Otherwise, they wouldn't have been employed. Basic wage economics applies to everyone that is employed.
---------------------------------------
"Where the best indication of where you will end up in life is where you started it. The wealthy are the wealthy because they are the wealthy, that's all, not super-talented or super-smart. In general, they just got lucky enough to be born rich. Your tortured logic is wrong."
Being wealthy in a tax system is not how much one has, but how much one makes. Therefore, one is not wealth in the tax code because one is born wealthy, but because one makes a wage. So, the basic laws of economics apply. Your misguided assumptions are wrong.
---------------------------
"We are talking about people who don't 'labor' "
Their labor is intellectual rather than physical.
----------------------------
" I'd be happy to convert to a log scale."
This is certainly preferable to a bracket system, but a flat tax leads to general prosperity.
--------------------------
I thank my opponent for a response and await his next one.
Tatarize

Con

"Actually, one could contend that policy X has made it less pretty than it otherwise would have been."

Not without a shred of evidence they can't. Especially when we tried policy X in the 1980s and early 2000s and found that it makes crap uglier. We have very legit evidence and it says, "you're wrong".

----

>>Mulally was the new CEO, not the old one who lead the company into a $12.7 billion deficit.

Ford has been lead into the ground over a few decades worth of work. My point wasn't that this person made bad decisions, just that he wasn't worth anything close to what he was paid.

---
>>Society is not entitled to the worth of his labor just because it is above a certain amount.

But, we've gone over this *repeatedly*. When offering such pay packages they aren't being paid for their labor they are being paid for their decisions. They are being paid such money not in return for services rendered but to attract top class talent. Such money is not commiserate with labor and, as such, causes your analogy to fail.

You are invoking labor because people understand labor. However, the money we are talking about isn't resulting from labor but from a bidding war. Nobody really ever does 20 million dollars worth of work, but they work for the company that offers 20 million rather than 19. You have tacitly and directly stated this reason repeatedly. Well, if they were taxed at 90% then the person would *STILL* take the job that offered 2 million over 1.9 million.

The fact is, at the amounts we're talking about, we aren't talking about labor. You are strictly speaking trying to pull a rather pathetic bait and switch, and failing quite splendidly.

----
>>Thomas Edison, who holds the record for the most patents held, was very wealthy, and worked as a telegrapher before he was an inventor. This was intellectual work, not hard labor. http://www.nps.gov......, scientists are not "blue-collar".

Isn't it quite telling that you needed to go back to the 19th century to find your example? We aren't taxing Edison that much because he died a long time ago. The fact that Edison made money for his fantastic work is great, but it doesn't therefore imply that everybody who makes money does fantastic work. I bring up scientists because they aren't paid even remotely as well as CEOs and they are considerably more intellectually laborious and innovative. Your claim that people are paid crazy huge amounts of money and are worth it is notably silly. They aren't anywhere near as productive as people making an honest living.

----
>>Actually, if all the doctors, lawyers, scientists, and entrepreneurs died, we'd be in quite a situation.

Few of those individuals make anything close to millions. Your average doctor, lawyer, scientist, and entrepreneur doesn't that amount of money. The fact that you're confused on this issue the result of your idiotically conflating the two. Further, most of your proposed tax cuts would go to billionaires and the like.

>>"The rising number of countries that have introduced a flat tax -- notably in Eastern Europe -- have generally seen their tax revenues rise, not fall as flat-tax opponents had predicted."

When the worlds' economy went up, Russia collected more tax money. This is why it went up each year in fairly close marks with the GDP.

>>"The divide between rich and poor is widening in Germany"
"The German tax system has undergone a comprehensive reform in the year 2001 and later in 2008. This reform is intended, in principle, to ease the actual rate of tax for both individuals and companies.
Taxation of an individual's income is progressive. In other words, the higher the income, the higher the rate of tax payable. In 2008 the Germany tax rates for an individual are 15% - 45%." http://www.worldwide-tax.com......

The US has had a progressive tax system for decades. The gap between rich and poor has exploded. Giving the rich a massive tax cut isn't going to help this or change this. I'm not sure what you're trying to argue here.

----
>>And again, I insist that plenty of individuals classified as "rich" by my opponent are actually doctors, lawyers, scientists, and entrepreneurs.

I repeatedly noted I was talking about the superrich. The kind of rich you need to be born into. Though, the same is often true for many of the simply wealthy. Further I find the suggesting that the middle class would just work harder to make ends meet when you raise their taxes to fund the superrich a little odd. The middle class aren't simply laborers but also consumers. As far as the economy is concerned their role as primary consumers is far more important than the work they do. This is why unemployment begets unemployment and why the economy lives and dies with the middle class.

>>I also remind the audience that having a flat tax ultimately helps the middle class as the business owners have more money with which to attract employees and expand business. With more demand for labor, benefits and wages increase.

This claim of further investment in businesses is nice, but we tried it. It was tried. They don't invest more. They don't spend that money and have it trickle down to the people. If expanding their business was in their best interest it is *still* typically in their best interests. Getting massive tax cuts doesn't seem to be the tipping point in expanding a business.

----
>>Actually, the percentages would be adjusted down, not up.

Oh, because clearly you can pull in the same amount of money by charging everybody less taxes. Massive tax cut for the superrich and rich, and a magically the middle class and poor don't have to pick up the slack because... you say so?

>>"President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened?"

The economy kept expanding? How about Reagan who cut taxes on the superwealthy? What happened, we got plunged into a spiraling deficit that we never recovered from that only briefly leveled off when Clinton added a couple tax brackets and started collecting massively more tax revenues. Giving a few anecdotal stories about tax cuts on the rich followed by worldwide economic growth doesn't make for a real bit of data. It's selective and simplistic and nonsensical.

----
>>>>"you'd be giving them TO the employer."
>>Actually, people accept jobs on terms of wage made before taxation. After a tax cut, the employer does not lower wages.

No. The people earning the top brackets often own the companies. Wages don't change anything. You'd be taxing profits not wages.

----

>>They're actually worth more than every penny. Otherwise, they wouldn't have been employed. Basic wage economics applies to everyone that is employed.

We aren't talking about WAGES! We are talking about bidding wars for top talent. The amount of the pay doesn't matter just so long as it's more than others were offering.

----
>>Being wealthy in a tax system is not how much one has, but how much one makes. Therefore, one is not wealth in the tax code because one is born wealthy, but because one makes a wage.

Goodness. I'm talking about upwards mobility. The rich get richer because they are rich. If your daddy left you millions you are much much more likely to have significantly more than that than somebody who's family had no money. This added amount of money is income rather than inheritance, but it takes money to make money and those with the money, make the money.

----
>>Their labor is intellectual rather than physical.

Typically the superrich aren't even intellectual laborers. They do not earn money commiserate with skill.

----
>>This is certainly preferable to a bracket system, but a flat tax leads to general prosperity.

Actually it would a bracketed system at every dollar. Flat tax does not lead to prosperity. There's actual data here. Tax cuts to the rich do not trickle.
Debate Round No. 3
wjmelements

Pro

I thank my opponent for this debate.

"We have very legit evidence and it says, "you're wrong"."
Still waiting for this evidence. Unfortunatley, you haven't posted evidence early enough for me to contend. Should you source bomb in the last round, I would be unable to contend it (seeing as the debate would be over). So, the audience should ignore this claim.

"My point wasn't that this person made bad decisions, just that he wasn't worth anything close to what he was paid."

You've changed your point. You had said that he had "help[ed] run a company into the ground."
In response to this new argument, he was worth the amount that he was paid, because Ford improved under Mulally (http://www.ajc.com...) and improved Ford to the point where it didn't need a bailout from the government http://www.huffingtonpost.com... . Again, you picked a very poor example. Ford went from a $12 billion deficit to a point where it didn't need a bailout. Surely, the CEO was worth more than the money he was paid.
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"When offering such pay packages they aren't being paid for their labor they are being paid for their decisions."
Their decisions are worth more than they are. Their labor is highly valued intellectual labor. Companies invest millions in good CEOs because they produce more wealth for the company than they are worth.
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"Well, if they were taxed at 90% then the person would *STILL* take the job that offered 2 million over 1.9 million."
And I repeat that it is unethical to do so. A person makes themselves more valuable; therefore, they do not owe this surplus to society.
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"Isn't it quite telling that you needed to go back to the 19th century to find your example?"
I actually picked him because he hold the world record, not because they're hard to find.
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"Your claim that people are paid crazy huge amounts of money and are worth it is notably silly."
Read directly from the Wealth of Nations:
"Unless [workers] yield [the employer] this profit, therefore, they do not repay him what they may very properly be said to really have cost him." (Book 1, Chapter 7)

Your claim that they are not worth it is notably silly.
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"Few of those individuals make anything close to millions."

But they are in the top income bracket.
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"The US has had a progressive tax system for decades. The gap between rich and poor has exploded."

Exactly the point I've argued.

"Giving the rich a massive tax cut isn't going to help this or change this. I'm not sure what you're trying to argue here."

Well, let's see what I already have argued here:
"I also remind the audience that having a flat tax ultimately helps the middle class as the business owners have more money with which to attract employees and expand business. With more demand for labor, benefits and wages increase."
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"I repeatedly noted I was talking about the superrich. The kind of rich you need to be born into"

These "kind of rich" are not effected by wealth, as there is a notable difference in the ownership of the deceased's property and yearly wage.
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"If expanding their business was in their best interest it is *still* typically in their best interests. Getting massive tax cuts doesn't seem to be the tipping point in expanding a business."
It has throughout history (Kennedy and Reagan). When business has more funds, they have more to spend (on labor, land, etc.), and money not spent goes into savings accounts which lowers interest rates for other businesses or the money is invested into otehr businesses. Under no case is the wealth of a business hid under the rug.
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"Oh, because clearly you can pull in the same amount of money by charging everybody less taxes. Massive tax cut for the superrich and rich, and a magically the middle class and poor don't have to pick up the slack because... you say so?"

Because history and economics say so. I sourced an example and a link to other examples.
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"What happened?"
"The economy kept expanding?"
Wrong. Tax revenues increased by 33%, while the GNP only increased 4.5%. Lowering taxes and making taxes less progressive helps the economy. http://www.house.gov...
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"No. The people earning the top brackets often own the companies. Wages don't change anything. You'd be taxing profits not wages."
You don't think all taxes are passed on to another person? When a company makes less money, it cuts itself down. (Wealth of Nations, Book 1, Chapter 7)
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">>They're actually worth more than every penny. Otherwise, they wouldn't have been employed. Basic wage economics applies to everyone that is employed.
We aren't talking about WAGES! We are talking about bidding wars for top talent. The amount of the pay doesn't matter just so long as it's more than others were offering."
Yes, we are talking about wages. Bidding wars for talent will never exceed the true value of the job being employed. Period. Otherwise, a worker would not be hired (leading to a net loss).
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"If your daddy left you millions you are much much more likely to have significantly more than that than somebody who's family had no money. This added amount of money is income rather than inheritance, but it takes money to make money and those with the money, make the money."
The solution to this catastrophe (OMG!) would be to instate an estate tax, not a progressive tax.
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"Typically the superrich aren't even intellectual laborers. They do not earn money commiserate with skill."

After 3 rounds, you do not talk specifics. You do not provide sources. Well, you are utterly wrong. I don't know who taught you economics (you are a junior, so you haven't been taught it I guess), but the people who earn a high yearly income can not earn that icnome merely by having it. They must produce worth, otherwise they make no wage.
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"How about Reagan who cut taxes on the superwealthy? What happened, we got plunged into a spiraling deficit that we never recovered from"

Jimmy Carter had a deficit every year. Reagan simply inherited this deficit. his policies did not create the deficit. http://assets.opencrs.com...
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">>This is certainly preferable to a bracket system, but a flat tax leads to general prosperity.

Actually it would a bracketed system at every dollar."

I know what a logistic curve is.

"Flat tax does not lead to prosperity. There's actual data here. Tax cuts to the rich do not trickle."

My opponent has claimed for 3 rounds that he has data, but has not presented any. Therefore, there is no data.

--->Tax cuts to all trickle and increase tax revenue. I have claimed this, defended this, and sourced this. My opponent has claimed the opposite, but has not sourced this, and has not backed it up with economic logic.

The reason why my opponent has not sourced the economic propserity caused by making a tax more progressive: the economy weakens when a tax becomes more progressive.

"The Revenue Acts of 1921, 1924, and 1926 reduced the top rate from 73 percent to 25 percent." http://www.heritage.org...
The economy then boomed (hence, the roaring twenties).
--------------------------------
CONCLUSION:
The false unsourced economic claims of my opponent are false. Taxing people extreme amounts only limits their potential to reinvest their wealth in the economy.

A negative flat tax is not only economically fair (because what one produces is proportional to what one earns), but also beneficial to the economy as a whole.
For these reasons, you should vote PRO.
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It was a great debate, Tat. I really enjoyed it.
Tatarize

Con

I suppose, thanks for the debate. However, throughout the debate you seemed to misunderstand basic economic theory, history, offering fallacious arguments and flippant responses. From your initial misunderstanding of how brackets work to your stubborn and nonsensical equating of CEO pay with wages, to citing anecdotal cases where taxes were lowered as economies picked up to argue that lower taxes clearly cause economic expanses. To the point where you claim up and down that you can absolutely lower everybody's taxes especially the superrich and still take in more overall tax revenue. Further, you've argued that giving the rich a massive tax cut is going to likely cause the divide between rich and poor to become smaller, because it gets larger under a progressive tax plan it therefore *MUST* get smaller under a flat tax. Seriously, this is the overall quality of debate. It was utterly underwhelming. From assuming that though, a college graduate, I'm a junior in High School to claims that Eastern Europe cut taxes before a world-wide economic expanse that allowed it to still increase tax revenues that therefore all tax cuts increase revenues, I was stunningly underwhelmed by the debate.

Clearly relying on the fact that voodoo economics never worked and that even when Bush Jr. tried Reaganomics again it failed again, it clearly must be the case that clear anecdotal cases are the way to go. I mean, Clinton in 1993 raised taxes on the rich and oversaw the longest economic expanse of any economy under any president ever. So raising taxes on the superrich is clearly the path to economic expanse. We can raise taxes, cause economic expanse, collect massive taxes and pay down the debt. Clearly, because I have cited one case (and I didn't have to go to Eastern Europe to do it) it must be the case that I'm totally right. -- My point was always that your argument was complete crap: tax cuts for the super wealthy don't work (do a smidgen of research).

Because companies pay money for CEOs they must be worth what they are paid. This is actually correct, however, it doesn't hold that. If they are therefore paid less, they will be worth less. Absolutely not. Imagine if a group of people are bidding on a million dollars. You offer $10,000, they offer 20k, you counter with 25k. Certainly, because of the stakes, paying an extremely large amount of money is going to be worthwhile. Now, imagine I place a tax rate on your bidding. And whatever you end up paying, half of it is going to be given to the government. Has anything changed? No. You are still bidding on something worth your while and you're still going to bid whatever you bid. However, paying 100k and having half taken by the government. Isn't going to make the resulting million dollar prize suddenly be worth half a million dollars. This is an extremely critical difference between wages and bidding. The reason for the crazy multi-million dollar CEO pay, is that it's a result of a bidding war not because it's the result of somebody actually doing millions of dollars worth of work.

You make fairly silly comments throughout like, "You don't think all taxes are passed on to another person? When a company makes less money, it cuts itself down." as if the buck never stops. There's never a point where raising the price of your widgets is going to make you profit less. If you tax the rich, the results are going to be passed right down the line to the poor, increasing the price of everything. If you give the rich a massive tax cut, everything will be cheaper and the poor will prosper. No matter how much tax anybody they just hand the taxes off to somebody else. It clearly can't ever just cut into the profits the company posts because no company ever makes profits, it's always reinvested into the company.

Or because the Carter years added 400 billion to the national debt that clearly Reagan "inherited" this deficit when he tripled the national debt by adding about 2 trillion dollars to it. But, to say that Carter "inherited" the deficit from Nixon-Ford's 800 billion, would just be silly. In fact, the only person who didn't "inherit" a deficit was Bush Jr. who promptly cut the taxes on the super wealthy and helped move us from financial stability to financial collapse.

Sorry to be so underwhelmed, but your arguments have all been seriously bad. Your inability to understand this, doesn't negate it. I suppose I should go back to arguing with creationists who can't understand evolution. At least when their arguments are this bad they aren't boring while making them.

Progressive taxes tax people at different rates based on their income. The super-rich can stand to pay a bit more, as a result the middle class gets significantly less tax burden and they drive the economy. Giving massive tax cuts to the super-rich doesn't help anything and is going to demand a tax increase on the middle class. Magical fairy powered economic booms are not going to magic new tax revenues into existence because it happened this one time in Russia during the 1990s. It happened in the US too and our taxes went up.

Thank you for reading, oy.
Debate Round No. 4
14 comments have been posted on this debate. Showing 1 through 10 records.
Posted by tmar19652 4 years ago
tmar19652
So Someone making $245000 a year would effectively make more money than someone making $255000, not a very fair system is it?
Posted by Tatarize 7 years ago
Tatarize
No, mongeese they actually don't understand evolution.
Posted by mongeese 7 years ago
mongeese
"I suppose I should go back to arguing with creationists who can't understand evolution. At least when their arguments are this bad they aren't boring while making them."
It's not so much that they don't understand evolution, as much as they don't think that evolution has to be the only possible answer.
Posted by RoyLatham 7 years ago
RoyLatham
Tatarize, If it is true that that executives do the same job pretty much regardless of what they are paid, then we should see as many successful execs in North Korea as South Korea, or in Mao's China as modern China. That's not the case. Also, for many years the US drained talent out of Europe with the lure of lower taxes. I think the psychology is that sacrificing every minute awake for a job only happens when the payoff is substantial. The payoff doesn't come from having or spending the money, I think, but rather from winning the game of making money.

In practice, executive pay is a negligible expense in most companies. For example, at Exxon it is less than $.0002 per gallon of gasoline. It really isn't worth talking about.

There are numerous escapes from high taxes: leave for a foreign company, found your own company and leave the money as untaxed equity, and engage in non-productive tax avoidance schemes that basically substitute effort avoiding taxes for effort making more income.

This doesn't mean that if taxes were raised a little that dramatic effects would result. It's hard to say exactly how high taxes have to be before revenues drop.
Posted by wjmelements 7 years ago
wjmelements
14 points just dropped from my opponent's side.
Posted by Tatarize 7 years ago
Tatarize
Mongoose, Yes. As one decision at the top can easily cost or make billions of dollars the very best are clearly worth a nearly unlimited amount. My claim isn't that they aren't worthwhile. They clear are worth, to the company, what they are given. My claim was that because this is the reason for such extreme pay it isn't really commiserate with wages. If you paid the same person half as much, they'd still do the same job as the money is there to attract the talent not to pay them for doing the job.

Thusly, if you taxed them at 50% rather than 0%. It would make no difference at all in the work you receive. The same cannot be said of middle class workers who might need to get a different job if the pay was reduced or their hours were cut.
Posted by wjmelements 7 years ago
wjmelements
...still waiting for an RFD...
Posted by mongoose 7 years ago
mongoose
For crying out loud, it the CEO was not worth what he/she was bid for, he/se wouldn't have been bid for! You don't pay someone for more than they are worth. You offer them less, and if they leave, you replace them. If you can't replace them, that person was the only one to do the job, thus making him/her worth it.
Posted by wjmelements 7 years ago
wjmelements
Someone post an RFD...
Posted by RoyLatham 7 years ago
RoyLatham
Under a flat tax, the wealthy will still pay the bulk of the taxes, probably more taxes than they do now. That is because payment in the higher brackets is a percentage of income, so as income rises, so does the dollar amount of the tax. However, the flat tax eliminates the elaborate system of deductions. That system of deductions is of much greater benefit to the rich than the middle class. With the present system a fortune is spent on accounting and tax preparation, and investments are made for tax reasons that would otherwise be invested more productively. With less money wasted as a consequence of the tax system, overall prosperity rises, so there is more money to be taxed.

CEOs amy or may not be overpaid, that is for the stockholders to decide. Are movie stars and pop singers overpaid? That too is for the market to decide.
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