Case: Temporary Exceptional Tax

David Hansen
NPTE 15

Plan: The United States should establish a temporary, exceptional tax policy on wealthy
Americans for the purposes of United States public debt redemption by establishing a
one-time 14 percent tax on approximately $2 trillion of unrepatriated foreign earnings for
the purpose of repaying state debt until State debt is repaid.

Advantage I: Corporate Taxation Good

Uniqueness
1 Corporations face low taxes now
-A 2012 Citizens for Tax Justice analysis of the financial reports of the Fortune 500 companies
shows that 285 of these corporations had accumulated more than $1.5 trillion in overseas profits
by the end of 2011, and there is evidence that a significant portion of these profits are located in
tax havens.
http://ctj.org/pdf/offshoreincome.pdf

-A 5-year study by the CTJ showed that from 2008-2012, 28 Fortune 500 companies paid zero
federal income tax over those 5 years. All of these corporations were profitable, for example GE
posted record earnings during that period.
http://www.reuters.com/article/2014/02/26/us-usa-tax-corporate-idUSBREA1P04Q20140226

2 Low corporate taxes represent a form of preference to corporate citizens Commented [1]: What does this mean?
-A 2015 report by the Institute on Taxation and Economic Policy shows that the poorest 20%of
households pay an effective tax rate of 10.9% in state and local taxes.

-The total amount of taxes paid by the American people is at a record high, but corporations
collectively are paying 26% less than they did six years ago
http://blogs.marketwatch.com/capitolreport/2013/11/04/americans-paying-more-in-taxes-
companies-less-heres-why/

-Low corporate taxes represent a system that rewards corporate profits over individual well-
being. The prominent discourse of the right is about corporations and profits first. The low tax
rates are part of a system that prefers corporate speech and creates a backdrop that makes
Roberts Citizens United decision politically justifiable.

-While corporations have a high set rate, loads of tax loopholes, like unrepatriated foreign
earnings, mean that corporations pay effectively low rates.

3 Preferencing corporations makes plutocracy inevitable

-Plutocracy is rule by the rich. Commented [2]: More warrants
Impacts
1 Plutocracy destroys value to life (alt cause/IL to K’s)
-Plutocracy means that corporations can determine the dollar value of life, meaning that
regulations or policies that could save lives become weighed against profits. This means that
any life can be become disposable at any point if ruling corporate powers determine it to be
profitable.

2 Plutocracy makes wars of expanisionism inevitable, causing extinction

-Profit becomes the deciding factor over military action. Corporations make decisions on
whether or not to invade through lobbying efforts and connections. They will say we need to
oust Saddam Hussein who had large amounts of oil, but leave Kim Jung Il.

-Haliburton was a driving force behind the Iraq War. Halliburton received $21b in contracts for
providing infrastructure to the US military plus access to new oil markets. The company used its
connections to Dick Cheney to push for the invasion which was incredibly profitable for
Halliburton.
http://www.motherjones.com/politics/2014/04/rand-paul-dick-cheney-exploited-911-iraq-
halliburton

-Wars of expansionism ignore treaties and global politics for profits. This means that retaliation
and Great Power Wars become inevitable because the United States will constantly invade
other countries for its own profit.

3 Plutocracy causes a suicide economy, destroying the environment and causing

extinction
-Neoliberal logic destroys the environment. In the same way we do calculus that considers
populations irrelevant, so do we with the environment. A suicide economy is an economy that
consumes what it relies on to function, eventually destroying itself. Corporations will continue to
pollute and exhaust resources until it’s impossible.
http://uir.unisa.ac.za/bitstream/handle/10500/570/dissertation.pdf?sequence=1

Solvency
1 Plan increases corporate taxes, reversing the hierarchical paradigm
-The money has already been identified. President Obama and the CTJ report cited above both
know which corporations are hiding money and where they are hiding. Obama suggested taxing
this money before but it was shot down by Republicans.

-The plan is a massive shift in policy. Lawmakers have been aware of off-shore accounts for
decades, but have done nothing. The plan takes action against corporate exceptionalism by
making their profits subject to the same taxes as individuals.

2 Plan reframes conversations about corporate power

-The plan means that conversations begin to happen about how we can regulate corporate
power. This spotlights the issue and forces a national conversation about corporate profits and
power.

-The plan sets a person-first precedent, where the government preferences individual well-being
over corporate profits by reallocating the money to states.

3 Plan checks plutocratic power

-The plan governs the plutocratic power structures as opposed to letting them govern us.
Government control of corporate wealth is a reversal of the status quo where corporations
govern corporate wealth.

-Taxing profits means that corporations have less money to spend on politicians, which directly
decreases their political power.

4 What unrepatriated foreign earnings are

-Profits that are held overseas for tax avoidance purposes.

Advantage II: States Need Cash

1 State budgets are low now
-State Budget Solutions' (SBS) fourth annual State Debt Study reveals that state governments
face a combined $5.1 trillion in debt. This is caused by low revenues from the recession as well
as corporations avoiding taxes.
http://www.statebudgetsolutions.org/publications/detail/state-budget-solutions-fourth-annual-
state-debt-report#ixzz3U0fD3Zuv

-Low oil prices mean that revenue to states is lower than expected for this year. States are able
to tax less, which means there is less money flowing into state coffers.
http://wtnh.com/2015/01/16/lower-gas-prices-widen-state-budget-deficit/

2 Low state budgets cause cuts in critical social services

-Arizona alone is cutting 15% of its spending on higher education.
http://www.huffingtonpost.com/2015/03/08/arizona-education-cuts_n_6819886.html

-Illinois is set to cut $6.7 from its social services budget, with nearly half of the money being
from pensions. The targets are the state’s most vulnerable residents: homeless youth, poor
families, the sick, immigrants, the disabled. The Medicaid cut is particularly cruel, since both
enrollment and expenditures have doubled between 2000 and 2011, an indication of the
enormous social need for health care.
http://www.wsws.org/en/articles/2015/02/20/illi-f20.html

-This is part of a national trend. 16 states are set to run a deficit from December projections.
Even states that aren’t going to run a deficit have major cuts to social services and are scared to
spend money because they are unsure about revenue increases.
http://www.washingtonpost.com/blogs/govbeat/wp/2014/12/12/even-amid-recovery-state-
budgets-bleed-red-ink/

3 Loss of social services undermines democracy

-The book Towards More Democracy in Social Services: Models and Culture of Welfare by
Gaby Flosser states that, “Future modes of welfare state security will be assessed according to
how well they are able to absorb contingency and guarantee innovations. [...] Structural and
cultural forces and presuppositions appear to be increasing in significance for the conduct of
individual lives and the purality of realized possibilities for the construction of communities
appears to to be increasing.” This means that modern democracy is only possible with strong
social services that allow for self-actualization.
https://books.google.com/books?id=Pb-
N3CgrmfMC&pg=PA3&lpg=PA3&dq=social+services+and+democracy&source=bl&ots=1fRps_l
Rkz&sig=_bxzfDnxx0v68IgNtEPZDHlAe00&hl=en&sa=X&ei=2UD_VNuHGc6HyATYjoLIDg&ved
=0CDgQ6AEwAw#v=onepage&q=social%20services%20and%20democracy&f=false

Impacts
1 Systemic poverty
-Lack of social services perpetuates the poverty cycle. Only the wealthy can afford education
education that is necessary for high-paying jobs and healthcare .

-Civic rights activist, Abu Jamal wrote, “As many people die because of relative poverty as
would be killed in a nuclear war that caused 232 million deaths; and every single year, two to
three times as many people die from poverty throughout the world as were killed by the Nazi
genocide of the Jews over a six-year period. This is, in effect, the equivalent of an ongoing,
unending, in fact accelerating, thermonuclear war, or genocide on the weak and poor every year
of every decade, throughout the world [...] much of that violence became internalized, turned
back on the Self, because, in a society based on the priority of wealth, those who own nothing
are taught to loathe themselves, as if something is inherently wrong with themselves, instead of
the social order that promotes this self-loathing.”

-As state Medicaid budgets are slashed, hundreds of thousands of low-income individuals will
be denied full benefits of the program, which will make it significantly more expensive for them
to purchase medicine and seek medical help. These people will therefore be at a significantly
heightened risk of disease, which could lead to hundreds of thousands of otherwise preventable
deaths.

2 Social services cuts become manifest forms of racism

-Cuts to social services become opportunities for politicians to manifest racism. The idea of a
“Welfare Queen” that dominated political discourse in Bush I era politics is an example of this.

-In almost all of the states affected by the pre-clearance clause, the majority of people who rely
on state social service programs for survival are ethnic or racial minorities, with over 70% of
state welfare recipients being from racial minority groups. As a result, state social services are
viewed as programs designed largely for minorities, and are generally fought for by candidates
representing the low-income minority districts.

-Racism creates the mindset that allows us to view entire peoples as sub-human. In this
instance, states denying minorities access to a vote or working do delude the value of their vote
relegates them to the status of second class citizen, which renders them an inferior group of
people. Once this is the case, groups in power are able to promote genocides against groups
they perceive to be inferior, since the lives they are taking have no inherent value anyway. This
mindset is also used to justify racist pricks in the South committing hate crimes against racial
minorities, since they view the lives of these individuals to be meaningless to begin with.

3 Kills millions

-Structural racism in domestic policies justifies racism abroad. The perpetuation of structural
racism leads to international policies that support that racism. These include things like ignoring
genocide in non-western countries, allowing US forces to torture Muslim enemy combatants,
and unfair food and medicine pricing with non-industrial nations. These policies result in the
death and dehumanization of hundreds of thousands.

Solvency
1 Plan provides states with needed capital
-The tax would be enacted until state debts are paid off. This means that states are confident
that they have enough revenue to pay for social services.

-Plan would provide states with about $280b per year to help pay off public debt.

2 Revenue to states reverses the downward spiral of state economies

-The plan reverses cuts to social services and education, which allows for solvency for the
poverty cycle. Subsidized higher education means that more people have access to it and
higher paying jobs.

-Increased access to welfare will, according to Flosser, lead to an increase in innovation

because people are less concerned with feeding themselves. This allows for self-actualization
and focus on developing oneself.

3 Support of states supports democracy

-Access to social services and education increases support for the state. This establishes a two-
way relationship where individuals are more willing to engage in the state and the democratic
process because they get tangible benefit from the state.