Resolved: Progressive income taxes are just

This debate will focus primarily on the definition of just, which, defined by Pro, ends up being "Giving each his due". If I as Con can provide examples and situations where progressive income taxes do NOT give each his due, then I will win the debate. Now Pro has already gone ahead and explained Progressive Income Taxes in one of his opening paragraphs in R2, which I agree with for the most part; the system is designed to only take away a larger percentage of income once your income reaches a certain level, say $90,000 a year. After that, everything will be taxed at a higher rate, but that 90K itself is left untouched. I would like to start my round off by emphasizing my opponent's thesis: Progressive income tax is just because it fairly distributes rights and responsibilities to every member of society. Now to move on to my contentions, and then I will address my opponent's argument and why it fails to meet his thesis and the resolution. Definition: Capital Gains- When you sell an asset at a higher price than you paid for it, the difference is your capital gain. For example, if you buy 100 shares of stock for $20 a share and sell them for $30 a share, you realize a capital gain of $10 a share, or $1,000 in total.If you own the stock for more than a year before selling it, you have a long-term capital gain. If you hold the stock for less than a year, you have a short-term capital gain. Most long-term capital gains are taxed at a lower rate than your other income while short-term gains are taxed at your regular rate. [1] 1. Progressive Income Taxes exempt Capital Gains. Progressive income tax has major flaws, all of which show it to be unjust. Because the system doesn't take into account capital gains (CG) as heavily as normal income, it creates unbalance in who is paying the most taxes. The PIT system was made in order to tax the richest of the country at higher levels, as to provide for the common well being of this country in a variety of ways; what is happening instead is that this group of people are paying the LOWEST taxes because they maintain the majority of their income through capital gains. Right now, the tax rate is at 15% for those with capital gains [2]. 35% is the highest level of progressive income tax that one must pay, and we already see the problem; those maintaining their income through capital gains (the wealthiest) pay 20% less progressive taxes then those who do not have capital gains. Is this giving each his due? Is it giving each his due when the secretary of Warren Buffet ends up paying more in progressive taxes then he does, when she only makes a fraction of what he does? It's not just, for it's not giving each his due. "The benefits of preferential rates for capital gains are enjoyed by the wealthiest Americans because they're the ones who tend to receive this type of income. More than 70 percent of the benefit goes to taxpayers with annual income of more than $1 million, a group that comprises only about 0.3 percent of all taxpayers." [2] The rich are, yet again, eluding the way our taxes work. Most Americans don't have the ability to make more than 2/3 of their income through capital gains, giving those who are wealthiest the biggest savings. The richest 400 U.S. taxpayers in 2007 paid an effective tax rate of just 16.6 percent. That's largely because more than two-thirds of this group's income—which averaged $345 million—was in the form of capital gains and dividends, while most Americans are paid in salaries and wages." [3] The reader's might be asking themselves, how exactly can we see that these people are able to achieve so much of their income through capital gains? "This select group probably includes some managers of hedge funds and private equity funds, who enjoy another special loophole allowing them to treat most of their investment-management compensation as capital gain instead of ordinary income—vastly lowering their taxes. Historically, when different forms of income have been taxed at different rates, lawyers and accountants have found ways to create tax shelters that make one type of income look like another type to take advantage of the lower rate—this is just one example." [2] Basically, the wealthy file their incomes as capital assets, which fall under capital gains, giving them that extremely lower interest. The Progressive Tax system is not fairly distributed, and is not just. The historically low rate of capital gains has made the federal income tax system less progressive while increasing the budget deficit. [2] This contention alone shows how unjust Progressive taxes really are, and how people like Warren Buffet or Steve Jobs pay less in progressive taxes then their secretaries do. All in all, not giving each his due. REFUTATIONS C1. My opponent tries arguing that since most people are "born into wealth" they should be taxed more, because they usually maintain this wealth, thus making progressive income taxes just. This is an example of how Progressive Income taxes work in general, but I really don't see how this contention really strengthens my opponent's argument that PIT are just. If anything, it just helps my argument, because more and more people are easily becoming wealthy (see opponent's C1 sources) by being born into it, making more people who will elude PIT through capital gains. Also, I would like to point out that his statistics show those who are in the lower quintiles to remain there over the years; this is most likely because they know if they reach a higher income, they will have to pay that to the government through PIT, showing PIT to be demotivating for the average citizen to achieve higher success. C2. Pro's second point is that the wealthy owe more back to the system, because they have more at stake and are only able to achieve their wealth through the government protecting them. I again agree with this statement, but my contention about capital gains shows that the wealthy are not properly giving back to the system as they should be, because PIT allows them to elude paying through Capital Gains. Again, not a relevant point. C3. This point again falls invalid because it is merely in thought that it would provide free services for every member of society. Instead, those without capital gains, but with higher incomes, must pay and provide these free services for, in most cases, their bosses, or just those who make up a small portion of taxpayers who evade PIT. Basically, my opponent has again helped my case by showing that these taxes are paid to help the wealthy, who don't pay them in the amount that is just. |Conclusion| So far my opponent has only given examples of how Progressive income taxes should have worked on paper, but we can see in practice, it is not just, nor does it work. Through my contentions, and the help of my opponent's, we see those who don't/ aren't able to have larger Capital Gains paying the standards for PIT, while the richest and most powerful business owners find it all too easy to maintain over 2/3 of their income through capital gains, giving them a huge tax break. The poorer are basically paying for the richer...now we must refer back to the definition provided by my opponent; Giving each his due (Aristotle). We all see this is not giving each his due. Also, let's see if my opponent's thesis has held up throughout all this. Progressive income tax is just because it fairly distributes rights and responsibilities to every member of society. We see the rich evading these rights and responsibilities, and allowing those not as fortunate as them to make up for it. Pro's thesis is not met, and all his points fall. Thank You. Sources 1. Dictionary of Financial Terms. Copyright ï¿½ 2008 Lightbulb Press, Inc. 2. http://www.americanprogress.org... 3. http://www.irs.gov....