CPs to Solve Competitiveness/Economy/stem advanced Manufacturing Networks cp
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- Tax reform is bad- it’s deficit-funded and creates another financial crisis- this study assumes all possible ways to fund
- Even with growth factored in, the CP costs 1$ trillion in lost revenue
- Tax reform is bad – it only helps the top 1% and cuts valuable programs
- Tax reform causes a “health-poverty trap” which dooms poor populations to death and continued inequality
- Tax reform boosts inequality and impacts poor people while boosting corporations
- 2AC — Doesn’t Solve Growth Tax reform can’t solve economic growth- increases deficit spending
Corporate Tax Reform Answers2AC — Education KeyAn educated workforce is the biggest internal link to competitiveness---our study prices in other important factorsDevaraj and Hicks 16 – Srikant Devaraj, research assistant professor at the Center for Business and Economic Research at Ball State University, PhD in economics, and Michael J. Hicks, director of the Center for Business and Economic Research at Ball State University, George & Frances Ball Distinguished Professor of Economics at the Miller College of Business at Ball State University, PhD in economics from the University of Tennessee, 2016 (“Advanced Manufacturing in the United States,” Conexus Indiana, June, Available Online at http://conexus.cberdata.org/files/Conexus2016-AdvMfg.pdf, Accessed 07-21-2017, HK) This study has evaluated the size, growth, and composition of advanced manufacturing in the United States over the past decade. We find that advanced manufacturing employment has grown, but that employment growth has been clustered in STEM and white-collar employment. Blue-collar employment in advanced manufacturing has either declined or remained unchanged since 2004. Examining the correlates of this growth, we find, as virtually every study before has found, that growth in advanced manufacturing is highly correlated with levels of educational attainment. While other factors such as tax and regulatory climate, availability of research universities surely matter; over the long run, a well-educated and ready workforce matters more than any other single factor in the health of advanced manufacturing firms. Examining Indiana, we find that the state leads the nation in the share of employment in advanced manufacturing with at least one out of every 12 workers employed in this area. The growth in this cluster has likely provided the bulk of manufacturing employment growth in Indiana over the past decade. Importantly in terms of the industrial mix, Indiana enjoys strong diversification, suggesting that advanced manufacturing will be less sensitive to cyclical changes than most states. There is one concern about advanced manufacturing in Indiana. Indiana’s educational attainment ranks no better than average for the skill areas in which advanced manufacturing depends. Continued growth and strength in advanced manufacturing will depend on how effectively the K-12 and higher education systems perform in transitioning students into potential employees for these sectors.
2AC — Tax Reform BadTax reform is bad- it’s deficit-funded and creates another financial crisis- this study assumes all possible ways to fundBlair 17— Hunter Blair, joined EPI in 2016 as a budget analyst, in which capacity he researches tax, budget, and hi policy. He attended New York University, where he majored in math and economics. Blair received his master’s in economics from Cornell University, 2017 (“Likeliest outcome of tax reform is a deficit-financed tax cut for the rich that will expire in a decade”, Economic Policy Institute, http://www.epi.org/blog/likeliest-outcome-of-tax-reform-is-a-deficit-financed-tax-cut-for-the-rich-that-will-expire-in-a-decade/, Accessed 07-26-2017 // GHS-JK) http://www.businessinsider.com/reason-middle-class-americans-should-hope-trump-fails-on-tax-reform-2017-4 Undeterred by their failure to repeal the Affordable Care Act (ACA), Republicans look set to move on to the next item in Paul Ryan’s “Better Way” agenda—tax reform. This post helps set the stage for the upcoming tax reform debate and explains why “tax reform” will in the end likely just become a deficit-financed tax cut for the rich and corporations that expires in 10 years—a decade of free money for groups that don’t really need it and a problem for policymakers to deal with in the future. Understanding why this deficit-financed, 10-year tax cut is the most likely outcome requires some understanding of the “budget reconciliation” process (apologies). Budget reconciliation allows the Republicans to avoid the Senate’s 60-vote threshold for a filibuster, and hence will almost surely be needed to pass any tax cut. To begin the reconciliation process, Congress first passes a budget resolution with topline spending numbers that includes reconciliation instructions. These instruct the relevant committees to make changes to mandatory spending or revenues in order to achieve some budgetary target—for instance, decreasing revenues or the deficit by so-many billion over a specified time period. Here, Republicans in Congress face a choice. They originally planned to use the fiscal year 2017 budget to repeal the ACA, and so wrote reconciliation instructions that were basically deficit neutral over the 10-year budget window. They could do this because, although repealing the ACA would mean large tax cuts for the top 1 percent, these could be paid-for with cuts to Medicaid and subsidies that helped people afford insurance in the ACA marketplace exchanges. If Republicans wanted revenue-neutral tax reform—perhaps following through on the popular mantra of “broaden the base, lower the rates”—they could simply repurpose those instructions. But this is unlikely to work for them. Last year’s “Better Way” tax reform proposal will likely form at least the skeleton of the upcoming Republican plan. The Tax Policy Center (TPC) estimates that this plan would increase federal debt by $3 trillion over just the first decade. This plan included the tax cuts that were part of ACA repeal, but the cuts to ACA Medicaid and premium subsidies which were supposed to help pay for them have for now been left behind in the failed attempt to repeal the ACA. So in order for their desired tax cuts to make it through the reconciliation process, the GOP will have to find another way to pay for them. They could just propose cutting Medicaid again, but that didn’t work for them before, so why would it work now? Or they could drop the repeal of the ACA’s taxes from the “Better Way” plan, making their plan $800 billion cheaper (and hence easier to pay for). But this would be a point of contention, since directing a lot of money towards the top 1 percent is a very desired feature in Republican tax plans, and it would still leave them about $2 trillion away from deficit neutral. So how could these cuts be made deficit-neutral? What we are likely to see are claims that the cost will be covered by economic growth. This isn’t true. TPC already used so called “dynamic scoring” to take into account the limited growth impacts of cutting taxes—their $3 trillion number includes these dynamic effects. More importantly, the Congressional Budget Office and Joint Committee on Taxation probably won’t agree that tax cuts will pay for themselves with faster growth either. It gets even worse for crafting a deficit-neutral version of the Better Way plan: TPC’s estimate already assumes a number of pay-fors that are far from a sure thing. First, the TPC estimate includes the “destination-based cash-flow tax” (DBCFT), sometimes referred to as the “border adjustment tax” (BAT), which would raise $1.2 trillion in revenue. Reliance on the DBCFT to finance the Better Way plan creates two main problems, one political and one budgetary. The budgetary problem is that if Republicans plan to use revenues from the DBCFT to pay for their tax cuts, they’ll need that revenue to come in not just for 10 years, but longer (remember, tax cuts passed through reconciliation can only remain permanent and not phase-out after 10 years if they are paid for in the long run, not just in the first decade). However, since the DBCFT taxes imports and gives rebates on exports, it only raises money so long as the United States runs large trade deficits. Are the official tax scorers willing to assume that the United States will run large trade deficits for more than a decade? The political problem is simply that it creates winners and losers. The economics are complicated and contested, but suffice it to say that exporters are convinced they’ll win and importers are convinced they’ll lose. And some key importers have a lot of sway. To put it really bluntly, the Koch brothers and Wal-Mart already hate this idea. Indeed, Wal-Mart’s home state Senator Tom Cotton (R-Ark.) already described it by saying “some ideas are so stupid only an intellectual could believe them.” Given the political headache that the DBCFT is, we’ll likely see it dropped as a revenue raiser. Besides the DBCFT, TPC’s estimates assume that the Republican tax plan will raise around $4 trillion from repealing itemized deductions (other than charitable and mortgage interest) and closing other tax expenditures. Take one example: TPC assumes the Better Way plan will eliminate the exclusion from capital gains taxes on sales of principal residences. That is, currently if you sell your house, you’re allowed to exclude the first $500,000 of capital gains from income taxes (if you’re married filing jointly). The TPC score assumes this (along with literally dozens of other potentially popular tax breaks) are eliminated. Sound realistic? So deficit-neutral tax reform is pretty hard, but there’s an easier option if your goal is to cut taxes for the rich—follow the lead of the 2001-03 Bush tax cuts and finance them with debt. To do this, Republicans would give up on the fiscal year 2017 budget and pass a fiscal year 2018 budget resolution which included reconciliation instructions telling the relevant committees to simply lose some revenue. To pass that resolution, they’re going to have to agree on topline spending numbers for 2018 (remember, they have already agreed for 2017). The fractious Republican caucus could make this awfully hard, however. Remember that about this time last year, the fiscal year 2017 budget resolution made it out of committee on a party-line vote, but then couldn’t be passed. Amazingly, it couldn’t reach a majority in the Republican-controlled House because the severe spending cuts were not severe enough. What will happen if President Trump insists on money for infrastructure being smuggled into the tax reform plan? However dubious we might think the Trump infrastructure plans to date have been, they do add, not subtract, to the budgetary cost of any package. Republicans managed to pass the 2017 budget resolution only after a carrot was added for the Freedom Caucus—starting the process for repealing the ACA. Now that the repeal of the ACA has been abandoned, it is not immediately clear that Republicans can reach the consensus they need on topline spending numbers to pass the fiscal year 2018 budget. Finally, even if they pass this hurdle, any deficit-increasing tax reform automatically expires in 10 years. This is because the Senate’s “Byrd Rule” forbids reconciliation bills from increasing the deficit outside the ten-year budget window. So if this year’s tax reform is debt financed, there will be a “sunset” provision that snaps back the tax cuts at the end of the budget window (just like the Bush tax cuts—though only the highest-end ones were eventually allowed to die permanently). The outcome of tax reform seems pretty clear: deficit-financed, regressive tax cuts that get crammed through the reconciliation process but expire in 10 years, creating another “fiscal cliff” for future policymakers to deal with. It could be worse—the Republicans could take another run at gutting Medicaid, for example—but it could certainly be better. Even with growth factored in, the CP costs 1$ trillion in lost revenueSchroeder 17— Robert Schroeder, reporter for MarketWatch in Washington, fiscal policy reporter, 2017 (“Trump’s 15% corporate tax rate could cost the government $2 trillion”, Market Watch, April 26th, http://www.marketwatch.com/story/trumps-15-corporate-tax-rate-could-cost-the-government-2-trillion-2017-04-25, Accessed 07-14-2017 // GHS-JK) If President Donald Trump does propose slashing the U.S. corporate tax rate to 15%, as reports have suggested, one estimate is that it could cost the government some $2 trillion in lost revenue. Trump is preparing to roll out what he’s called a “big tax reform and tax reduction” package on Wednesday, and one of the details that has leaked out is cutting the corporate rate to 15% from 35%. Businesses and politicians regularly decry the 35% rate, though corporations often pay effectively less in taxes via deductions and credits. Trump has told staff he wants a major tax cut to sell to Americans, and it was less important to him if the plan loses revenue, The Wall Street Journal reported Monday. Under the corporate plan, losing revenue is exactly what would happen, according to an analysis done by the Tax Foundation during the campaign. Trump’s 15% number matches his campaign proposal, and that rate would cost the federal government $2.1 trillion over 10 years, according to the foundation’s estimate. The estimate shrinks when accounting for growth that would result from tax cuts, but still comes in at just over $1 trillion over 10 years, the same estimate found. Tax reform is bad – it only helps the top 1% and cuts valuable programsLevitz 17 (Eric Levitz – journalist for the NY Mag, Master’s Degree in Writing from The Johns Hopkins University, Bachelor’s Degree; Article; 7/12/17; “Trump’s Tax Plan Would Be Bad for Those Who Don’t Own Yachts, Study Basically Finds”; http://nymag.com/daily/intelligencer/2017/07/trump-tax-plan-only-good-for-the-rich-study-basically-finds.html; accessed on 7/26/17) [DS] Looking exclusively at what the White House knows that it wants to do with the tax code, TPC finds Trump’s plan would increase the deficit by $7.8 trillion over ten years, with 60.9 percent of that lost revenue accruing to the top one percent of income earners. Neither of those figures are too surprising, given that the president’s plan includes the repeal of the estate tax, the alternative minimum tax, and Obamacare’s capital-gains tax on high-income households, along with a 25 percent cut in the rate on owner-operated businesses — all of which stand to deliver significant gains to the wealthy and almost no one else. (You can read more about the details of Trump’s proposed cuts here). So, Trump’s plan amounts to a blueprint for how the rich can raid the federal treasury. But at least the “all candy and no vegetables” version manages to toss a few dollars in hush money to the witnesses in the middle class. Once you begin to pair the regressive tax cuts with revenue boosters, however, ordinary Americans see their cut dwindle to a pittance — or else, become a net loss. The one major source of new revenue Mnuchin and Cohn proposed in April was the elimination of the deduction for state and local taxes — a reform that would (rather conveniently) fall hardest on relatively affluent households in blue states. During the 2016 campaign, the Trump campaign tossed out a few other schemes for raising revenue, including the repeal of the personal exemption; the abolition of the “head of household” filing status for single parents; the imposition of a capital-gains tax on certain wealthy estates; and limiting the tax cut on owner-operated businesses to companies that aren’t “large.” After adding all these measures to Trump’s plan, TPC saw a significant improvement on the deficit front. Instead of swelling the deficit by $7.8 trillion, the “responsible” version of Trump’s tax package would grow it by a mere $3.4 trillion — only a bit more expensive than the Iraq War! Alas, such fiscal probity comes at a cost. With the revenue raisers in place, 19 percent of households would actually see a tax increase under Trump’s plan. And that sacrifice won’t be equitably shared. The top one percent would enjoy 76.3 percent of the benefits from this version of reform, while the top 5 percent would lay claim to 94.8 percent. Meanwhile, nearly one-quarter of households in the middle quintile of the income ladder would see their tax burdens increase. Vox’s Dylan Matthews spotlights the insane inequity of the plan with this stat: Including the tax hikes, the overall plan would give the average family earning under $25,000 per year a $40 tax cut, or a 0.3 percent boost in after-tax income. The top 0.1 percent, earning above $3.4 million a year, would get an average tax cut of $937,700, or a 13.3 percent boost in after-tax income. Remember, even under this version of the plan, the White House is allowing itself to expand the deficit by more than $3 trillion. It’s far from clear that congressional Republicans are ready to rubber-stamp a deficit increase of that size. Which means that, if the White House is to stick by its official (profoundly regressive) priorities, then their actual plan is going to have to soak the non-rich a bit more. (Paul Ryan’s proposal for tax reform provides a good model for how to cut the middle class out of the bargain.) Perhaps, this has something to do with the administration’s decision not to sweat the details of its own plan. To be sure, much of the upper middle class would still derive some benefit from the cuts. But these gains might well pale in comparison to what such households stand to lose from an underfunded federal government. Already, the GOP is finding that its commitments to ever-higher military spending and ever-lower taxes can’t be reconciled without draconian cuts to popular safety-net programs and public services. The super rich can insulate themselves from such cuts. But the broad middle class mostly can’t. And they’re starting to realize that, even in right-leaning parts of the country. Last night in Oklahoma, a state currently suffering the consequences of conservative economic orthodoxy, two Democrats were elected to deep-red statehouse seats after pledging to reverse cuts to public-school funding. Republicans are unlikely to pass a tax-reform bill all that similar to the White House’s haphazard sketch. But every tax plan congressional Republicans have produced in recent years shares the Trump proposal’s top priority — relieving the economic anxiety of multimillionaires and billionaires. So long as that’s the case, it’s hard to see how Democrats can lose by sharpening their economic message around themes of class warfare. As Matt Yglesias argued Wednesday, if Team Blue can succeed in turning 2018 into a referendum on the one percent’s class war, they should end up with the larger army. 2AC — Inequality TurnTax reform causes a “health-poverty trap” which dooms poor populations to death and continued inequalityBor and Galea 17 (Jacob Bor – ScD, SM, is Assistant Professor and Peter T. Paul Career Development Professor in the Department of Global Health, Harvard School of Public Health, SD Harvard College, AB Harvard School of Public Health, SM/ScM, Sandro Galea – physician and an epidemiologist. He is the Robert A. Knox Professor and Dean at the Boston University School of Public Health Education University of Toronto, MD Harvard School of Public Health, MPH Columbia University School of Public Health, DPH; Article; 4/25/17; “The cost of economic inequality to the nation’s physical health”; https://www.bostonglobe.com/opinion/2017/04/25/the-cost-economic-inequality-nation-physical-health/JTsEP3XkNx3425ypbw4KRI/story.html; accessed on 7/26/17) [DS] After its unsuccessful push to reconfigure the US health care system, the Trump administration has signaled that it will turn its attention to tax reform. While the details of the administration’s plan are still unclear, President Trump has indicated in the past a willingness to embrace measures that would greatly favor the wealthy, including tax cuts for the rich and a repeal of the estate tax. This could not come at a worse time for lower-income Americans. According to the Center on Budget and Policy Priorities, the estate-tax repeal would increase the concentration of wealth at the top of the US economy. Due to the tax’s up-to $5.49 million gift exemption, repeal would benefit only the wealthiest o.2 percent of Americans who are in a position to leave such a sum to their heirs. This move would add to the already substantial wealth and income inequalities in this country, which have increased significantly since the late 1970s, and would do nothing to address the country’s real earnings crisis: the large reduction in incomes since 2000 for low- and middle-income Americans. In concert with tax cuts for the wealthy, Trump has proposed large cuts to safety-net programs that protect the health of lower-income Americans. In doing so, Trump’s tax plan and budget blueprint will deepen gaps in health and longevity between those who are thriving in our economy and those who are not. In a paper published recently in The Lancet, we reviewed the literature assessing changes in survival gaps between rich and poor Americans since 1980 and found that health gaps widened between 1980 and 2014. Characteristic of this trend, middle-income and high-income Americans have seen an increase of over two years of additional life expectancy since 2001, while the poorest 5 percent of Americans have seen no gains in survival. In some cases, such as among white women with low income or educational attainment, life expectancy even fell. The longevity gap is stark, with the richest 1 percent of Americans now living 10 to 15 years longer than the poorest 1 percent. If current trends continue, the life expectancy gap between the poorest and wealthiest 20 percent of Americans will grow by nearly a decade in a single generation — from 77 vs. 82 years for Americans born in 1930, to 76 vs. 89 years for those born in 1960. Two key trends may account for the widening gap in survival across income groups in this century: Poverty has deepened, and it has also become a stronger risk factor for early death. Since 2001, household earnings have decreased for Americans in the lower two-thirds of the income distribution, with the largest losses affecting those at the bottom — earnings decreased by 17 percent for men and women in households at the 25th income percentile. Americans at the top of the distribution had to contend with fewer losses or, in some cases, none at all. Compounding the challenge for low-income Americans is the steepening income-survival gradient. Simply put: The poor and non-college educated have been left out from the health gains enjoyed by middle- and upper-income Americans. On a number of health measures, conditions for the poor are deteriorating. Although as a society we have never had better information about causes of disease, better availability of healthy food, or better medical technologies, access to these and other health inputs is increasingly determined by ability to pay. Public subsidies have not kept pace, leading to widening differentials in access. Education, historically a door to economic opportunity and better health, is increasingly out of financial reach for many Americans. Rising economic insecurity has also contributed to an array of stress-related adverse coping behaviors that are harmful for health, including the persistence of smoking and the resurgence of opioid use. Poor health can also limit economic productivity, deplete household income, and create a negative feedback loop. The growing link between income and health may signal the emergence of a 21st century health-poverty trap. Tax reform boosts inequality and impacts poor people while boosting corporationsHopluch 17— Amanda Holpuch, a reporter at Guardian US in New York, 2017(Trump's tax proposal would push US below Greece on inequality index, The Guardian, July 16th, https://www.theguardian.com/inequality/2017/jul/17/trump-united-states-tax-reform-plan-greece-commitment-to-reducing-inequality-cri-index, Accessed 07-24-2017 // GHS-JK) Donald Trump’s tax reform plans would, if enacted, increase the gap between rich and poor Americans and see the US slip below Greece on a new global index of inequality. According to the Commitment to Reducing Inequality (CRI) index, developed by researchers at Oxfam and Development Finance International, the US already distinguishes itself among wealthy countries by doing “very badly” at addressing inequality. But it would fall a further six places from its ranking of 23rd overall if Trump’s tax reform effort is successful, with the US’s specific rating on tax policies plummeting 33 places from 26th to 59th – just below Peru, Chile and Sri Lanka. “When you already have countries like Portugal and Slovenia ranking higher than the United States on the overall index, we think that’s a concern considering the wealth of the US,” Paul O’Brien, Oxfam America’s vice-president for policy and campaigns, told the Guardian. If the White House passes its budget, which would slash social service spending and could leave millions of Americans without health insurance, the US would fall behind Greece, which is crippled by a debt crisis; Spain, which for 10 months in 2016 did not have a government; and Argentina, which has been plagued by high inflation, according to the report. O’Brien said global understanding of inequality has grown significantly in the past decade, but this awareness has not led to the creation of pervasive government policies. Compilers of the index spent a year looking at policies around taxation, social service spending and labor in 152 countries. “The reason we did this comparative index,” O’Brien said, “is in large part to challenge policymakers like President Trump to look to other economies and other societies, to give people smarter ways to give everyone an opportunity to lift themselves from poverty.” The US performance on the index is strikingly bad compared to other wealthy countries, including the 35 members of the Organization for Economic Cooperation and Development (OECD). These countries account for 63% of the world GDP. The US is ranked 21st among them in the inequality index, despite being the wealthiest country in the history of the world. Threaded through the new report are stark facts that explain some of the ways the US has earned its low ranking. In 2012, 43.3% of corporations in the US paid no federal income tax. US employers are required to provide zero days of paid maternity leave, while Sweden offers 480 days. The US federal minimum wage of $7.25 is well below the $10.60 an hour needed for a family of four to stay above the federal poverty line. The report makes clear that inequality in the US could get worse if efforts to reform tax and repeal the Affordable Care Act are successful. If, instead, Trump decided to attack inequality in the US, O’Brien said he would need to create a more progressive tax system that lessens the burden on the poorest people, improve labor laws, and “ensure that investments in healthcare, education and social protection gave all Americans an equal shot at the American dream”. 2AC — Doesn’t Solve GrowthTax reform can’t solve economic growth- increases deficit spendingWallace 17— Charles Wallace, a prize-winning financial journalist who covers trade issues, 2017 (“Why Trump's Tax Reform Plan Will Worsen The Trade Deficit”, Forbes, April 26th, https://www.forbes.com/sites/charleswallace1/2017/04/26/why-trumps-tax-reform-plan-will-hurt-the-trade-deficit/#3a5cda48a8cf, Accessed 07-18-2017 // GHS-JK) President Trump has been complaining about the trade deficit since he became a candidate. But his plan for tax reform is likely to make the problem only worse. Here’s why: a key element of Trump’s tax reform is lowering the corporate tax rate from the current 35% to 15%. The non-partisan Tax Policy Center looked at this proposal when Trump made it as a candidate and concluded that the reduction would cost the Treasury $3.5 trillion in the first decade and $15 trillion in the second. The proposed cuts are running into Republican opposition because they include no revenue increases to balance them. So one has to assume that they would simply add to the deficit. What happens when the country runs a bigger deficit? It has to borrow more money to pay for government spending, which means issuing bonds to the Chinese, Japanese and other governments and private investors. Bigger deficits usually mean that the Federal Reserve has to keep bumping up interest rates, a process that began in December 2015, to keep investors buying U.S. debt. Some estimates say that for each percentage point increase in the deficit, interest rates go up 25 basis points. So what’s the problem with that? Although not always true, recent economic history suggests that rising Fed rates would boost the value of the U.S. dollar over time. As this article from the 1980s recounts, when the dollar is very strong on international markets, companies find it hard to compete against foreign firms on world markets. The result? Exports slow down and imports increase. Directory: file -> view view -> Western Europe after wwii view -> Author study: paul fleischman view -> Qpa1 7ela study Guide view -> Arctic Oil/Gas Neg view -> November 1970 Approximately 150,000-500,000 deaths Bhola Cyclone Bangladesh view -> Grade Level: 6 Unit of Study: Caribbean glce view -> Citation: Duffield, Katy view -> Table of Contents Lesson # view -> Chinese Wind Energy Disad Download 0.72 Mb. Share with your friends:
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