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Resolved: The United States should abolish the capital gains tax.
This topic isn’t so much bad as it is boring. It’s also heavily weight to the Pro. But, let’s do what we have to do.
Abolish – This means to get rid of. Note that the resolution does not stipulate a replacement tax or policy.
Capital Gains Tax – This is a tax imposed on capital gains. A capital gain is money earned through the sale of a capital good, like stocks, property, or artwork.
Should – This is important because your framework has to explain how we determine what the U.S. government should do when it comes to tax policy.
1. Economic Productivity and Growth – When deciding tax policy, the government should focus on economic growth and productivity. Eliminating the capital gains tax has been shown to increase average household real income as well as economic growth. The tax should be eliminated because it encourages people to use their money, purchase/sell goods, and invest.
2. Societal Well Being – The purpose of taxes is to provide for the public good. Libraries, roads, hospitals, etc… all come from tax dollars. The capital gains tax is the least efficient in increasing this public good. The costs associated with its collection are so high that the benefit gained is marginal at best.
1. Reduction in Revenue – The government collects money from taxes, and it spends that money. If the capital gains tax is eliminated, that money has to come from somewhere. It either means we shrink the budget, or create a replacement tax. Neither of those options are great. It would hurt government income, and therefore, it should not be abolished.
2. Benefits Only the Wealthy – Poor and middle class people generally don’t make much from capital gains. People investing in stocks and things are usually wealthier. In fact, the data shows pretty clearly that the majority of people paying capital gains taxes are wealthier than most Americans. If you eliminate the tax, you don’t actually help people that we would rely on for economic growth, you just help the wealthy. So, there’s no point in eliminating it.
Hope that helps. Good luck!