Rand Paul Should Be The Next United States President

Introduction To start off this debate, I will be detailing the differences between Rand Paul’s and Bernie Sanders’ economic policies. I believe that the evidence will demonstrate that Rand Paul’s economic policies are superior in nearly every way. The two main topics I will be focusing on are trade policy and tax policy. Free Trade One of the most important policy positions Bernie Sanders holds is the limiting of international trade. He has demonstrated through his time in office that he is strongly against free trade, and supports a protectionist trade policy. He has voted against free trade agreements with Central America, Australia, Singapore, and Chile. (1) Rand Paul, on the other hand, is an avid supporter of free trade and all of the benefits that come along with it. As evidence, in 2011 he voted for free trade agreements with Colombia, Panama, and Korea. (2) The policy of free trade has been one of the most significant causes of economic growth and global prosperity. The principles of free trade are well understood and accepted by the vast majority of economists, and they are simple enough to explain. Free trade is beneficial because:1. It leads to a more efficient allocation of resources. The term used to describe the efficiency increases as a result of free trade is called the gains of trade. Below is a graph to help visualize how the gains of trade works. (3) Or another way to look at it, one can analyze how tariffs effect the supply of a product in the graph below. (4) 2. Free trade leads to increased innovation Opening up trade with countries full of unique individuals with their own ambitions, backgrounds, expertise, and ideas leads to increased competition and innovation that greatly benefit the advancement of technologies that benefit society. As the Heritage Foundation explains, “Free trade is the only type of truly fair trade because it offers consumers the most choices and the best opportunities to improve their standard of living. It fosters competition, spurring companies to innovate and develop better products and to bring more of their goods and services to market, keeping prices low and quality high in order to retain or increase their market share.” (5) 3. Free Trade Benefits the Consumer This is a very important point, as the cost of living for all Americans are directly affected by the prices of commodities. The reason why free trade benefits the consumer is because the efficiency gains and increased competition leads to lower prices of goods.(6) 4. Other benefits of Free trade include: (7) Enhances the domestic competitiveness Takes advantage of international trade technology Increase sales and profits Extend sales potential of the existing products Maintain cost competitiveness in your domestic market Enhance potential for expansion of your business Gains a global market share Reduce dependence on existing markets Stabilize seasonal market fluctuations As you can see, the benefits of free trade are abundant, and Bernie Sanders’ economic policy would be detrimental to the expansion of this very beneficial policy. Rand Paul is the clear choice when it comes to trade policy. Tax Policy There difference in philosophy between Sanders and Paul arre enormous.Sanders believes in a progressive taxation system that taxes the wealthy at a very high percentage of their income, while Paul supports a flat tax system that keeps taxes low for all citizens.Rand Paul is for less regulation while Sanders is for more.Here's why Paul’s flat tax plan would be better for the country than Sanders’ plan. Rand Paul’s tax plan (8): Single, flat tax rate: 17% Currently, many people, especially the wealthy, tend to spend a great deal of money and time avoiding taxes as it can allow them to keep more of the money they earned. The complexity of our tax system allows for people to find all kinds of ways around federal taxes, which can even make it cost effective to pay someone to reduce one’s tax burden. The incentive to find a way around taxes increases proportionally to the tax percentage the government demands. The higher the tax rate, the more incentive to find a way around it. When our tax code is nearly 74,000 pages long, there is room for a lot of loopholes that people can take advantage of. The image below shows how large the tax code has grown over time, and it will continue to get more complex over time at this current rate. (9) There is evidence that simplifying the tax code using the flat tax can be effective, and actually increase the government’s revenues. In 1996, Russia began having serious revenue problems, so the IMF suspended its program in the country. Russia was having an inflation issue, and the taxes were high enough that people were willing to find ways to avoid paying them. As a result, Russia decided to implement a 13% flat tax system and also removed their corporate tax rate completely. What followed baffled many people, as the tax revenue actually increased after the tax code was replaced. The flat tax is still in use in Russia today as it ended up being a successful way of generating revenue for the government. The image below shows how the tax revenue increased after the flat tax was implemented. (10) The simplification of the tax code would remove loop holes used by special interests to bring their tax rates down to below current levels. It would increase efficiency, encourage more investment, and leave more money in people’s pockets to spend in the economy. Business income: Businesses would be subject to the same 17% rate. Keeping a low tax rate on businesses is important for encouraging the startup of new businesses and keeping businesses here in the United States. Businesses have left the United States as a result of it being more cost effective to move elsewhere, due to the excessive taxation burden the government places on them. Investment income: Capital gains, dividends and interest would be tax free. Encouraging investment is a must for growing an economy. Taxes on investing removes the incentives to do so, which slows down growth. These taxes are something that Sanders is fond of. Economic Freedom Zones: For cities with enormous poverty problems, Rand Paul proposes to enact economic freedom zones, where taxes are cut sharply to encourage investment and development. This would greatly help poor people find jobs and work their way out of poverty. Sander’s tax plan is this: Tax carbon and methane emissions that cause global warming: Taxing carbon and methane emissions is one of the fastest ways to slow down economic growth. Currently, fossil fuels make up about 81% of the energy consumption, as can be seen in the image below. (11) Taxing carbon emissions would artificially increase the cost of energy usage in every from. This raises the cost of living for all citizens of the country, and would be especially burdensome on the poor. The fact that poor people use a higher percentage of their income on energy means that this carbon tax would effectively be a regressive tax on the nation’s poor individuals. And what are the benefits? There is no evidence that taxing emissions will have a significant effect on global climate change. Global warming is a massive problem that is indeed caused by fossil fuel usage, but there is no alternative that is as cost effective that would work today. Removing barriers to entry into the market by reduce regulations and red tape and creating a business friendly environment is a more practical method of removing our dependence on fossil fuel. Also, the fact that energy is a demand inelastic item means that people will still tend to buy the fuels even if they are more expensive. This graph helps visualize how gas will still be in use even if the price is risen through excessive taxes. (12) Raising income taxes on the Rich to 90% (13) This idea is far to the left of most politicians in this country, and would likely never get passed through congress any time soon. But the fact that he supports this type of tax without realizing there would be massive consequences is alarming. This tax would inhibit the ability of the wealthy to expand businesses, hire more people, and invest into the economy. It would decrease the incentive for wealthy people move to the US, stay in the United States, or increase their incomes. It’s something that would tank the US economy. Tax capital gains and dividends of the wealthiest 2 percent at the same rate as ordinary income Not only does Sanders want to tax the income of the rich at extreme levels, he also wants to tax the capital gains of these Americans at high levels. Problems with this include the following (14): Increasing the Capital Gains tax would encourage companies to pay dividends on profits rather than reinvesting their profits in factories, equipment and technologies that are the lifeblood of our economy. A high capital gains tax has the effect of slowing economic activity. Owners of assets will have a tendency to hold on rather than sell due to the large tax consequences of selling. Taxing the increase in value of capital is a double tax because the value is based on the future earnings that are expected to generate. Conclusion As I have limited time and space, I cannot dive into other important economic topics right now. To summarize my points this round: Rand Paul’s economic plan would lead to more free trade, less taxation, more investments, more job growth, business expansion, and overall economic prosperity. Bernie Sanders’ economic plan would lead to less international trade, higher taxes, less investment, less job growth, higher costs of living, business outsourcing, and overall economic stagnation. The facts and statistics have shown that free markets, low taxes, and less regulation leads to the most amount of economic growth and increases in the general welfare of the population. This is why the presidential candidate best suited for promoting a desirable economy is Rand Paul. Sources (All 14 sources can be found in link):http://www.multiurl.com...