Progressive Taxation

R1) Inequality My source didn’t actually conclude differently. The whole point of the article was to prove that inequality was beneficial for society. He says that after discussing multiple philosophical theories for or against inequality, demonstrating that a philosophic consensus doesn’t really exist. And although Mankiw stated that statistics cannot resolve the argument, I disagree for a few reasons: (1) Statistics can show if the rich earn their money fairly. (2) Statistics can show if inequality harms the poor. (3) Statistics can show if inequality is earned or inherited. I have proven throughout the debate that the success of one person does not affect the success of another. If this is true, the overall impact is ‘good’ because one person is enriched and another is not harmed. Kasmic claims the difference between inequality and poverty is just semantics. This is not true. A society where everyone has $100,000 and the rich have $600 billion would be unequal. But poverty would not exist. Inequality can increase simultaneously while poverty declines. I actually offered evidence that countries with higher levels of inequality have higher living standards for the poor (. http://www.manhattan-institute.org...). This pretty much destroys Kasmic’s entire case. If progressive taxes reduce growth--which they do--they also increase poverty, which hurts the poor. Even if they create an egalitarian society people are worse off because of it. And that is not a desirable outcome. Inequality may actually be associated with higher living standards for everyone. So a progressive tax is not really beneficial. -> Drops his C2 C1) Progressive taxes and growth I don’t understand the first part of Kasmic’s argument. I pointed out that he was minimizing the impact of the Tax Foundation report. So I suppose he is accepting that he interpreted it incorrectly. Kasmic’s entire argument is that a poor person needs his or her wealth more than a rich person. But a flat tax acknowledges this because if a rich person is 20 times more wealthy he has to pay 20 times as much. Taxing the rich person over that amount doesn’t even make sense because someone being wealthy does not mean they should pay more in taxes. How does being wealthy mean you are obligated to pay more? My hypothetical example has no poverty line. But in reality a flat tax continues to give exemptions for the poor as I explained in my opening round. Those at or below the poverty line pay no taxes. Single parents with low income are also exempted. So, in actuality, JMK would not be paying taxes but the overall ratios would be the same. You would pay more than I would. Kasmic also ignores the evidence that I provided before that a flat tax would *reduce* the tax burden on low and middle income families by 2%. I also argued with my Russian example that tax fraud was reduced meaning increased revenue over the long term. This means any pinch felt by the poor are remedied by (1) growth and (2) an improved social safety net. Kasmic pretty much drops — and thus concedes — my argument that progressive taxes cause growth. This hurts him because I noted how growth is the *best* way to reduce poverty and help the poor. If progressive taxes get in the way of that they harm, and do not help, the poor.