Round 1:
Pro: The recent tax reform brings up questions about the validity of trickle-down economics. But lowering the income tax for corporations will be beneficial to our economy because corporations will have more money to spend after taxes. When faced with higher tax rates, businesses become uncertain if they’ll make ends meet. After all, what corporation will base its headquarters in a country that has a high-income tax rate when they can just move elsewhere? We’ve already seen so many corporations move elsewhere, and they take their business and their jobs with them.
Con: The Republican tax bill definitely allows for the corporations to end up with more money. It all comes down to how this money would be spent on them. Tech giants like Apple and Google have already released statements that they would invest this extra money in R&D rather than investing in creating jobs. And also considering the cost to move the operations from another country to a country like the U.S. where the labor is expensive cannot be justified. Though companies like Walmart have used the money to increase wages of employees, the big financial and technical giants, who are paying the highest amount of taxes, would be taking advantage of the situation to make more money. My question is, if it really was a ‘tax cut’ bill then why did the income tax rate for the minimum wage employees earning less than $20000 increase from 10 percent to 12 percent while the tax rate for companies paying millions of dollars decreases from 35 percent to 21 percent?
Round 2:
Pro: I completely agree with the fact that raising the income taxes lowers the wages because companies do not want to decrease their profit margin. But is it true vice versa? Tech companies like Microsoft or Apple or financial giants like JP Morgan and Wells Fargo do not run with the help of manpower. Even with the extra money, it is highly unlikely that such companies would work towards providing more jobs rather than investing it somewhere else. This tax bill will definitely bring more business into the United States but even after accounting for the revenue generated through this, the Joint Committee on Taxation projects an estimated loss of 1 trillion dollars over a period of 10 years. Adding to this loss, the new tax bill also abolishes the Estate tax and alternative minimum tax which were tax structures which applied to the wealthy 10-20 percent of this nation, increasing the overall fiscal deficit. This new bill is not a tax cut for everyone but it is definitely a bill which ensures a tax cut for the rich.
Con: While some corporations may choose to invest the extra income into areas such as R&D or infrastructure, Tax Foundation research shows that raising the income tax on corporations lowers workers’ wages. This in turn makes it harder for workers to provide for themselves and their families. In addition, investing in those areas may mean an increase in the number of jobs, thus lowering unemployment. This has happened in the past under Ronald Reagan’s leadership. By lowering the income tax rate by a little over 10 percent, the unemployment rate also lowered by roughly 2 percent. Though this new bill might not be a tax cut for everyone, it should benefit in the long run.
Con side debated by Sai Rajeev Devaragudi.
