Resolved: The USFG ought to tax the rich more

Contention 1: Laffer's Curve Arthur Laffer came up with the argument commonly referred to as the Laffer Curve or Laffer’s Curve. The idea behind the relationship between tax rates and tax revenues is that changes in tax rates have two different effects on revenues. They are called the arithmetic effect on revenues and the economic effect on revenues. Laffer describes the arithmetic effect, “simply that if tax rates are lowered, tax revenues (per dollar of tax base) will be lowered by the amount of the decrease in the rate. The reverse is true for an increase in tax rates. ” [1] He then goes on to explain the second effect on revenues which is the economic effect. He explains the economic effect on revenue by saying: “The economic effect recognizes the positive impact that lower tax rates have on work, output, and employment--and thereby the tax base--by providing incentives to increase these activities. Raising tax rates has the opposite economic effect by penalizing participation in the taxed activities. ” [1] As we can see is demonstrated by these explanations, the arithmetic effect clearly works in the opposite direction to the economic one as a result of this when both of the tax rate changes are combined it is more difficult to predict the consequences of the change in tax rates on total tax revenues [2]. Laffer constructed the following figure (figure 1) to “graphically illustrate” the concept of Laffer’s Curve. It is important to note that the graph does not represent the exact levels of taxation corresponding to specific levels of revenues. He notes that there would be no tax revenue at a tax rate of 0% no matter how large the tax base is [1]. He also notes that on the opposite end of the spectrum the result that they would conclude from would be the same. At a tax rate of 100%, the government would collect no tax revenue because no one would willingly work for an after-tax wage of zero, as is evident, there would be no tax base. Between these two peaks, there are two tax rates. A high tax rate on a small tax base and a low tax rate on a large tax base. Contention 2: Tax Cuts in History History teaches an important lesson as it has shown that high taxation has hindered the US economy while on the flip side, tax cuts and lowering taxation on the rich has had major economic benefits as well as helping the average American. The World had begun to change during World War 1 when the world began to expierence key economic powers fight each other after the first failure of the Concert of Europe. Many people mistake the economic recession in 1920 on the retooling of US factories in the post-war era. This is completely false as taxation during the Wilson administration were at 73% [3]. Normally, the US would have recovered after the war due to the inflow of cash, but the factory owners had little money to spend on retooling which had left a great deal of people unemployed. When Harding took office he cut taxation down to 58% by 1923 and Cooledge brought it down to 25%. This massive cut in taxes created a great deal of open and aviable capital for the business who created more jobs and the economy expanded into an era known as the Roaring 20’s and unemployment was haved! s://lh5. googleusercontent. com. .. ; alt="" width="624" height="356" /> Another factor to measure this is by economic growth from the GDP. Under Wilson the growth rate was a mere 1.4% while under Harding and Cooledge it was over 4%. [4] Despite the lowering of taxes by these two presidents, they were undone by President FDR who raised taxes into the 90s. They remained that way until JFK came into power. Despite only cutting taxes by 20% down to 70%, this cut unemployment in half. To make things even better, GDP had expanded to a 5% growth rate, bouncing back from the recession. [5] The budget deficet was nearly dropped to 0 under these tax plans. s://lh6. googleusercontent. com. .. ; alt="" width="575" height="400" /> Finally we have Ronald Reagan, the fiscal conservative. Since the JFK administration, the tax rate stayed at 70%. Reagan tackled this issue, dropping tax rates down to 28%. Unemployment was, once again, cut in half as it fell from 10 to 5%. [6] The Real GDP per capita skyrocketted under Reagan as it was 8.6% under President Carter, it grew to 23.4% at the end of Reagan’s 8 year term. [7] During this time period millions multipled by 7 and the nation’s wealth grew. Contention 3: Ethics John Rawls's Veil of IgnoranceWe my first clarify a few things and the first task is to eliminate the bias behind this topic. Here we have to look at it through John Rawls Veil of Ignorance. Here one must look through Rawl's Veil of Ignorance. In order to do that one's creed, race, sex, religion, political views, and generation does not matter. This in in order to eliminate bias from the viewer in order to view his two principles of Difference and Equality. The Equality Principle is that the greatest extent of Liberty for everyone. The other states that it must benefit everyone, including the least advantaged, must be open to everyone, and your enemy chooses your position in that society or scenario. [8] In order to come behind this Veil must be a Rational Creature. Though this creates an interesting point of view since no person would have their taxes raised. This would create a system where jobs loss and high unemployment will cause people to go against this plan due to it's negitive affects. to continue, we can see that when you observe the fact that your opponent will decide your place in society then you can see that you would be the unemployed and worst affected by the plan. This plan creates a new kind of underlying societal class that leaves much to be desired. This situation fails the Veil of Ignorance and thus it is unethical. Social Costs PrinciplesThe Social Costs Prinicple, or also known as Externality, states that even if something negative comes out of a plan then it should be negated. [9] This is due to the fact that humanity is completely needed and should be cared for to the upmost care. The fact is, that when we observe this plan we can see that the high unemployment rates, job loss, and other negative effects, will cause a harm to humanity and should not occur. Due to the failure under the Social Costs Principle, this plan should not be enacted. Kant's Universal PrincipleKant's Universal Principle is exactly as it sounds. The principle is applied to everyone and if this fails to work for everyone then it fails as a plan and should not be enacted. [10] My opponent's plan even shows that this plan fails as the rich are being taxed more. This alone shows that the plan fails this test as not everyone's taxes are not being raised. It is also well known that people do not like their taxes being raised and that is a factor that needs to be accounted for in this debate. When we look at raising taxes on everyone we can see that there would be less revenue and less jobs avalable, as we've shown in earlier arguments. This plan fails the test of Universalization and is unethical. s://lh5. googleusercontent. com. .. ; alt="" width="468" height="468" /> Sources [1] (. http://www.heritage.org...) [2] (. http://www.balancedpolitics.org...) [3] (. http://www.visionandvalues.org...) [4] (. https://www.measuringworth.com...) [5] ibid [6] (. http://portalseven.com...) [7] (. http://bea.gov...) [8] (. http://plato.stanford.edu...) [9] Buchanan, James; Wm. Craig Stubblebine (November 1962). "Externality". Economica 29 (116): 371–384. 10. Kant, Immanuel. Groundwork of the Metaphysics of Morals. Cambridge University Press. 1998. pg 53.