Flat Tax is Good for the Economy

I'll begin on my case.Contention 1: Flat Tax does everything a tax reform needs to do.1. The first main thing is reduction of tax rates, but it is nowhere close to most of my opponent's inccorect math. We can firstly observe that there are two main tax rates out there. That of a 40% tax rate for that of the "rich" and a 30% for the Middle Class. The Herritage Foundation has suggested that of a flat tax rate of 28%. Under this system that would mean that taxes for EVERYONE would be reduced and hence people would be freer to spend their money on the free market and stimulate the economy that way. [1] To further this, the flat taxation system would end up keeping the Earned Income Tax Credit system, or EITC, which both Liberals and Conservatives support as this reduces poverty rates, especially for single mothers and single parents. [2]2. The recent studdies have shown that this New Flat Tax system would create economic growth. They've shown that there will be 0.143 percentage points increase to our nations economy. [3] One of the key things here for this growth is that it eliminates double taxation on the current system which hampers economic developement. Senator Hatch has shown (in the graph bellow) that the effects of this double taxation (Capital Gains Tax) is harming the economy and destroying our GDP growth as a nation as we are loosing almost $1 trillion. Study done by the Tax Foundation found that, "the desired capital stock is extremely sensitive to its expected after-tax return. The Tax Foundation model predicts that after a several year adjustment period, the capital stock would be 16.9 percent less than otherwise, work hours would be about 1.25 percent less, and GDP would be 6.3 percent lower than otherwise. Because tax collections depend on the size of the economy, these anti-growth effects would be expected to have a negative feedback on tax collections. When our model takes the smaller economy into account, it estimates that ending the rate cap on long-term capital gains and qualified dividends would actually reduce federal revenues by $122 billion." [4] s://danieljmitchell.files.wordpress.com...; alt="Tax Foundation Double Taxation Dynamic Chart" /> 3. Finially it would completely reduce the complication behind this taxation system and have that of three deductions. Under the current system there are tons of legal and finiancial issues that need to be solved and only that of the Flat tax can do so. Herritage Foundation writter and researcher, JD Foster stated that, "The New Flat Tax offers tremendous simplification for individuals and businesses; it provides much greater transparency so that taxpayers can be more confident the taxes they pay are in line with those of their neighbors, and so taxpayers can be more informed about the true costs of government." [5] My opponent tries to refute this in his 4th contention, but yet he fails to back this up with valid evidence. He fails to realize that there can only be three deductions under this new sytem as shown by the Heritage Foundation and they are as follows, Higher Education, Charity Contrabutions, and Morgage Interest Deducations, that's it. Contention 2: Russian Example.A similiar tax system has been implamented in Russia, but here's the kicker. The tax rate was already at 28%, but the Russians lowered it to 13%. The IMF viewed Russia and they found that due to the low tax rates that more people paid their taxes and this resulted in more income for the government. [6] Another key thing is that in Russia it provided more income then what they had under that of the Progressive Tax system. Upon doing research they also found that jobs were more accessable and the jobs market was thriving. [7] In the end they found an increase of tax compliance, so more revenue and most importantly there was an increase in productivity since people got to keep more of their earnings. [8] Sources1. (http://www.heritage.org...) 2. (http://www.cbpp.org...) 3. (http://www.frbsf.org...) 4. (http://taxfoundation.org...)5. (http://www.heritage.org...)6. (https://www.imf.org...) 7. (http://ftp.iza.org...) 8. (http://www.voxeu.org...)