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DWYP 2 Round 1 Lonejedi vs Egoist Do Tax Cuts for the Rich Really Help the Economy?
- Thread starter lonejedi
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Alright, I'm back from camping, so let the debate begin. Good Luck.
Taxbreaks for those who are wealthy, stimulate the economy. Now you're most likely asking yourself, wait a second, is that an oxymoron? Giving those who already have lots of money, a break from taxe? I mean they already have all kinds of money to spend, why give them more when a middle-class family is struggling for money, and taxes aren't helping. To simply put, giving tax cuts to the rich, will help benefit that family in the poor or middle class, and here's why.
You start out with upper class businessman. We'll call him Bill. Bill owns his own business, it's not very large, but it's also big enough that he earns 1,000,000 a year. He wants to expand, but out of that 1,000,000, Uncle Sam takes about 100,000 of that for himself due to income taxes. Now that's a generous number, some states have much higher rates. So we're at a 10% income rate.
Now let's go on to the average middle class family. We'll put that number at 50,000 a year. You tax them, at that comes at 5,000 of their money goes to Uncle Sam. (Note the average wage is less than 40,000 dollars)
Now I understand that 5,000 is alot of money, but you can't lower the income tax too much. So Say they lower it to 8%, giving this family an extra 1,000 dollars, compared to when lowering the same rate for the rich, you would give them an extra 20,000 dollars.
Now how is that helping the economy, giving the rich an extra 20,000 to spend? It drastically helps them. Let's go back to the example of Bill. Now that he has 20,000 dollars more money, he can now begin to invest more in his company. He has more resources to choose from, so he has more options. If you can invest more into your company, you can make more profits, which in turn you can create more jobs. Now that money that Bill invested, is now making more money, he can expand his business. Meaning he can hire new people, and create more jobs, and BETTER PAYING Jobs.
Cutting the taxes of a middle class person, will only take care of that guy for an additonal month or two. Where as cutting it for the businessman Bill, will help create more jobs.
http://financial-dictionary.thefreedictionary.com/Trickle+Down+Theory
http://www.ssa.gov/OACT/COLA/AWI.html
Taxbreaks for those who are wealthy, stimulate the economy. Now you're most likely asking yourself, wait a second, is that an oxymoron? Giving those who already have lots of money, a break from taxe? I mean they already have all kinds of money to spend, why give them more when a middle-class family is struggling for money, and taxes aren't helping. To simply put, giving tax cuts to the rich, will help benefit that family in the poor or middle class, and here's why.
You start out with upper class businessman. We'll call him Bill. Bill owns his own business, it's not very large, but it's also big enough that he earns 1,000,000 a year. He wants to expand, but out of that 1,000,000, Uncle Sam takes about 100,000 of that for himself due to income taxes. Now that's a generous number, some states have much higher rates. So we're at a 10% income rate.
Now let's go on to the average middle class family. We'll put that number at 50,000 a year. You tax them, at that comes at 5,000 of their money goes to Uncle Sam. (Note the average wage is less than 40,000 dollars)
Now I understand that 5,000 is alot of money, but you can't lower the income tax too much. So Say they lower it to 8%, giving this family an extra 1,000 dollars, compared to when lowering the same rate for the rich, you would give them an extra 20,000 dollars.
Now how is that helping the economy, giving the rich an extra 20,000 to spend? It drastically helps them. Let's go back to the example of Bill. Now that he has 20,000 dollars more money, he can now begin to invest more in his company. He has more resources to choose from, so he has more options. If you can invest more into your company, you can make more profits, which in turn you can create more jobs. Now that money that Bill invested, is now making more money, he can expand his business. Meaning he can hire new people, and create more jobs, and BETTER PAYING Jobs.
Cutting the taxes of a middle class person, will only take care of that guy for an additonal month or two. Where as cutting it for the businessman Bill, will help create more jobs.
http://financial-dictionary.thefreedictionary.com/Trickle+Down+Theory
http://www.ssa.gov/OACT/COLA/AWI.html
Modest_Egoist
Smash Journeyman
Good luck to you as well.
In that scenario, Bill's tax cut does help him create more jobs by expanding his business. However, he falls in the minority of small business owners that are eligible for the top bracket tax cut. Other small businesses do not benefit from this tax cut, so they cannot expand and provide more jobs like Bill can.
It would be nice if such tax cuts were given to individuals who can create more jobs and opporutnities like you stated, but the Treasury's definition of "small business owner" included individuals who were just passive investors in addition to actual business proprietors. What would giving a passive investor a tax cut do to help create more jobs?
While passive investors get the tax cut, many small business owners do not receive the benefits of the tax cut. This means that they will still struggle to keep their business going, and not have enough to create more jobs or even expand. If the stock of the business increases, the investors will benefit. Give the tax cuts to the business owners who can use it to boost the economy, not to the wealthy investors.
http://www.cbpp.org/3-21-07tax.htm
In that scenario, Bill's tax cut does help him create more jobs by expanding his business. However, he falls in the minority of small business owners that are eligible for the top bracket tax cut. Other small businesses do not benefit from this tax cut, so they cannot expand and provide more jobs like Bill can.
It would be nice if such tax cuts were given to individuals who can create more jobs and opporutnities like you stated, but the Treasury's definition of "small business owner" included individuals who were just passive investors in addition to actual business proprietors. What would giving a passive investor a tax cut do to help create more jobs?
While passive investors get the tax cut, many small business owners do not receive the benefits of the tax cut. This means that they will still struggle to keep their business going, and not have enough to create more jobs or even expand. If the stock of the business increases, the investors will benefit. Give the tax cuts to the business owners who can use it to boost the economy, not to the wealthy investors.
http://www.cbpp.org/3-21-07tax.htm
It's true, the rich occupy a small amount of those who are under the population, but the top 1% of Americas riches, also pay 37% of taxes. The Top 10% pay for 68% of our taxes. That's a ridiculous number, don't you think that these same groups should be getting tax breaks? Why should the weight of the economy basically rest on the top 10% of the U.S.
As for investors, you do realize that the money they receive is then being invested into another company? That means they are giving a company money to use to Expand, which again will create more jobs. So either way, the economy is working. The same argument is made for those millionares who store their money in a safe somewhere. That money is being used by the bank to invest in companies, it's how banks work. Those millionares are indirectly helping the lives of companies and families all across the U.S.
http://www.american.com/archive/200...zine-contents/guess-who-really-pays-the-taxes
Modest_Egoist
Smash Journeyman
Where else should the weight of the economy reside then, on the poor or the middle class? The economic surplus resulting from the computer "boom" of the nineties allowed for tax cuts for taxpayers. Right now, the United States is in a deficit due to war spending, gas prices, and other factors.Tax cuts implemented from the deficit to boost the economy must eventually be paid back.
If tax cuts continue to be enacted while in a deficit without paying it back, it will offset any positives the tax cuts may have created. Sure, it can help the rich create jobs now, but later either taxes will need to be increased or services have to be cut.
While it may seem like that is helping, it isn't enough. There are many middle class families that are struggling with debts and living expences. They don't have the luxury of having a six figure income. Now, is it that those middle class families should be considered as mooching off the wealthy? I think that's hardly the case. Middle class Americans work for their income as well; some families even have both spouses working to help make ends meet.
While one can argue that the recent tax cuts helped boost the economy, it was still one of the weakest expansions since World War II. Couple that with the increasing deficit, and the economy isn't looking good.
http://www.cbsnews.com/stories/2008/02/12/national/main3822385.shtml?source=RSSattr=HOME_3822385
http://www.cbpp.org/7-11-07bud.htm
http://www.cbpp.org/8-9-05bud.htm
http://www.usatoday.com/money/perfi/general/2003-09-14-middle-cover_x.htm
It's true, during a war, tax cuts aren't the greatest idea. You can't spend on military, if you're cutting some funding from taxes. But that's not what we're arguing, we are arguing, that in general, cutting taxes for the rich, is a benefit. If you cut taxes for someone who makes 50,000, they aren't going to be able to do much with that money. According to your previous source of cbpp, it said that those under 50,000 were at 500, and those at 50-100k are at 1800. Well say that 50,000 is 750. With 750, how much can you really do. If anything they can pay a few bills off, but after that, nothing to stimulate our economy.
I think you fail to realize that most of those businesses that did rise up today, started out in the same position that the middle class businesses are. The U.S. thrives in the economy of Capitalism. We aren't going to reward you because you're struggling. If you want to prosper, you have to work, and if you work hard enough, you will rise up to the top. Why give a tax cut to a business, that has a very good chance of going out of business.
You give a tax cut that will almost gurantee some sort of help to the economy.
http://www.cbpp.org/3-21-07tax.htm (Egoist's old source)
Modest_Egoist
Smash Journeyman
Reagan's tax cuts for the wealthy did not help boost the economy. In fact, the economy ended up in a deficit. When Bush Sr. took office, the trend continued. When Bill Clinton increased taxes on the rich and cut taxes on middle and lower class Americans, the economy was in a surplus. And now George W. took the surplus and we are now in a deficit.
If the tax cuts are focused primarily towards the wealthy, then of course the middle class isn't going to get enough of a tax cut to do anything with. If you focus tax cuts for the middle class, then they have more money to spend. This would help boost the economy.
What about the businesses making $100K-$200? They make up a higher percentage than the top combined. Yet, they receive a tax cut of $4,100. That's not enough to help them expand or hire more workers. Leaving those businesses aside isn't going to help the economy.
http://www.bsherman.org/rushmore.html
Why do you keep thinking that a deficit in the debt of America dictates the economy?
You do realize that FDR caused us to get into piles of debt because of the programs of the New Deal? But that helped us get out of the depression.
When I think of Economy, I think of how well everyday people are doing. Before Reagan came in, Inflation was sky high. When Reagan came in, he got inflation down. The defecit happened because of Reagan spending so much money on military. See that's my point. You're not going to improve the economy either way when you're spending that much on military. If you're in a War, you should not be cutting taxes period. Whether it would be the rich or the poor. But when war time isn't happening, cutting taxes for the rich only helps.
I gurantee you if for some reason Bill Clinton had to go to war, the economy wouldn't have been so good. It had nothing to do with his plan, it had all to do with as you said before, the boom of computers. Bill Clinton got a free ride.
If you gave tax cuts to the Rich, they could buy things too. Why only do one? Cutting taxes for the Rich not only allows them to buy nice expensive things, that help other countries, they can make their nice expensive things that help create jobs.
I don't understand. You just claimed that those who are making 3,000 dollars less in tax breaks are helping the economy by buying goods, but those making 3,000 more aren't? Make up your mind.
http://www.bls.gov/news.release/empsit.nr0.htm
Modest_Egoist
Smash Journeyman
What good is debating about tax cuts during peace time when we're in a war? I'm sorry, but I don't see the point. It would be nice if we could, but that's not the reality. Had the computer boom from the nineties not happened, Reagan's war-time tax cuts would have been costly for the economy. Clinton may have gotten a free ride, but Reagan were saved by it too.
The middle class is living paycheck to paycheck. Giving them tax cuts would help ease the pressure on them while also getting money back into the economy.
I was responding to what you had stated before about struggling businesses not deserving help from the government. The businesses making $100K-$200K shouldn't be categorized as struggling. Yet, they are not given a big enough tax cut to help them grow. They're doing well, so should they not be rewarded?
I just want to point something out to you. Today, their is only an unemployment rate of 5.5%(http://www.bls.gov/news.release/empsit.nr0.htm). Clinton had a slightly lower rate that benefited from a boom, while this decade has had much more to deal with than what Clinton did. The ecomony has been relatively good during the Bush Administration. And when I say economy, I do not mean our National Debt. (As stated before, our National debt rose to huge levels during the FDR years, due to the New Deal, but the economy gradually improved because of the programs that the debt created) Bush has used the same principles that Reagan created. I do not understand how you can claim that we are in such a recession, when the employment rate is still so low.
How would tax cuts for the middle class give money back to the economy? You know what they are going to do with it. They're going to pay bills. Paying bills isn't going to stimulate the economy.
Wait, you just claimed that they are struggling, but they are doing well. When did this become tax cuts for different groups of business owners? When did I say that only the richest of the rich should get tax breaks. In my mind, if someone is making 100K to 200k, they are pretty well off. I believe they should get a tax cut, but no way do I think giving huge tax breaks to people who are going to just put it back into credit card companies is logical for our economy.
Modest_Egoist
Smash Journeyman
We shouldn't wait to be in a recession in order to act. Right now, that's basically all the middle class does: live paycheck to paycheck paying their bills. With prices going up and wages stagnating, they have to turn to credit cards in order to maintain their day-to-day expenses. If they had some extra money, they would be able to pay off bills and buy more consumer goods.
One big help to the middle class would be to adjust the alternative minimum tax for inflation so that middle class families are not affected.
http://www.usatoday.com/money/perfi/general/2003-09-14-middle-cover_x.htm
http://www.ombwatch.org/article/articleview/3656
Lonejedi:
Good use of sources. There were a lot, but that's the way it is with this sort of topic. Lots of numbers that have to be substantiated. With you posting first, however, I felt like it was your responsibility to try and define what exactly you meant by "improve the economy". You guys quickly ran into this issue in your debate because there are many factors to include; National Debt, employment level, GDP, inflation, etc...
Also, I found myself saying "That doesn't really make sense" or "That's a common misconception" frequently when reading your arguments. But they went largely uncontested, so its not really counted against you since you're not debating me, but Egoist!
A-
ModestEgoist
I felt like you dropped the ball on some easy arguments, and were perhaps not very comfortable with a topic on the economy. You had some valid points about the national debt, but allowed them to be pushed aside easily. And it also seemed like you were diverting the topic a bit much to the middle class. The subject was meant to be about the effect of tax cuts only the wealthy, not their effect on the middle class.
B
Good use of sources. There were a lot, but that's the way it is with this sort of topic. Lots of numbers that have to be substantiated. With you posting first, however, I felt like it was your responsibility to try and define what exactly you meant by "improve the economy". You guys quickly ran into this issue in your debate because there are many factors to include; National Debt, employment level, GDP, inflation, etc...
Also, I found myself saying "That doesn't really make sense" or "That's a common misconception" frequently when reading your arguments. But they went largely uncontested, so its not really counted against you since you're not debating me, but Egoist!
A-
ModestEgoist
I felt like you dropped the ball on some easy arguments, and were perhaps not very comfortable with a topic on the economy. You had some valid points about the national debt, but allowed them to be pushed aside easily. And it also seemed like you were diverting the topic a bit much to the middle class. The subject was meant to be about the effect of tax cuts only the wealthy, not their effect on the middle class.
B
D
Deleted member
Guest
Overview:
Not bad. Like Alt said, both sides had points that raise some eyebrows but for some reason went unnoticed. In the future, if you guys are gonna use footnotes, it would really make all the difference if you put numbers in relation to the point you're making.
lonejedi:
Heh, your style is...what's the best way to put this...
Colloquial? It's laid back and conversational, but I kind of like it. I'm not gonna lie. You did a good job of re-railing the thread after your opponent brought up some irrelevancies. You sourced well, you had an odd but enjoyable flow, and your arguments were fine, for the most part. But like Alt said, you weren't entirely infallible - it's just a shame ModestEgoist didn't capitalize on it!
My verdict: A-
ModestEgoist:
I don't know what else to say, because Alt nailed it for the most part. I wouldn't go as so far to say that your points on the middle class are irrelevant, because I don't think they are for the majority. I just didn't think they were very strong. You sourced well, but I just don't think this topic was for you. I almost want you to continue on simply because I think you'd be a lot better suited with a different topic. I'm not making any promises, though.
My verdict: B
Not bad. Like Alt said, both sides had points that raise some eyebrows but for some reason went unnoticed. In the future, if you guys are gonna use footnotes, it would really make all the difference if you put numbers in relation to the point you're making.
lonejedi:
Heh, your style is...what's the best way to put this...
Colloquial? It's laid back and conversational, but I kind of like it. I'm not gonna lie. You did a good job of re-railing the thread after your opponent brought up some irrelevancies. You sourced well, you had an odd but enjoyable flow, and your arguments were fine, for the most part. But like Alt said, you weren't entirely infallible - it's just a shame ModestEgoist didn't capitalize on it!
My verdict: A-
ModestEgoist:
I don't know what else to say, because Alt nailed it for the most part. I wouldn't go as so far to say that your points on the middle class are irrelevant, because I don't think they are for the majority. I just didn't think they were very strong. You sourced well, but I just don't think this topic was for you. I almost want you to continue on simply because I think you'd be a lot better suited with a different topic. I'm not making any promises, though.
My verdict: B
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