Do Tax Breaks Actually Help Society?

Video Lessons

Written by:

Warmer questions

  1. How many taxes do you pay?
  2. Which taxes are unnecessary? Why do people dislike paying tax?
  3. Do you think the government spends money wisely? How could it improve?

Reading section

Too rich for their own good?

Income inequality has become a huge problem in the U.S.A (and around the world), within the last few years. Rich people are getting wealthier while the rest of the people receive fewer benefits, and the worse aspect is that the breach is becoming bigger and bigger every day. The government is also looking for ways to change the official tax code, and these changes will possibly mean that the rich will be getting even richer and much more powerful than ever before. Such government plans, which will modify certain tax laws and leave others untouched, are literally looking to maintain and reinforce the status quo that the richer parts of society already possess in spite of the people and the working class in general. Behind the veil of legal improvements, Trump’s administration seeks more profit for the higher class and the plans that he wants to present to the Congress will not alleviate the needs of the less favored Americans.

While there seem to be some small benefits to these legal amendments, the truth is that most of those changes increase the rate of inequality, in terms of the amounts of deductions to pay. What is the real gain that comes with this new tax code? This legislation represents the prevailing advantages that the wealthy have over the “average joe” and their intentions to keep it that way.

Ideas to consider:

  1. Why are the wealthy so afraid to lose their wealth if they are so powerful already?
  2. Do you think there is still legislator who think and defend the rights of average citizens?
  3. Can a system like this be changed into a much fair and humane system?
  4. Do you think the people who promote these changes will stop there or will continue to improve their wealth no matter what?
  5. Why do people still remain so quiet about this?

Useful vocabulary

Using the words on the right, can you find the correct definitions?

Inequality Law that defines the rules that taxpayers follow in order to calculate and pay their taxes.
Income Tax deduction benefit you get according to your kind of income: earned income or unearned income.
Tax code Tax deduction benefit one gets if one has to pay a mortgage.
Charitable Deduction Monetary profit one receives from working, doing business or any productive activity.
Mortgage interest deduction The percentage of the value of a property to be paid as a tax.
Deduction A fixed amount of money paid regularly to a person for work.
Preferred rate for capital gains A steady rise in the level of prices.
Tax rate Amount of money taken from people in order to pay their taxes.
Inflation Disparity considered unfair according to its conditions.
Salary Tax deduction benefit one gets by donating towards an official religious organization.

If you’re having trouble, then have a look at the answers below.

Answers

Inequality Disparity considered unfair according to its conditions.
Income Monetary profit one receives from working, doing business or any productive activity.
Tax code Law that defines the rules that taxpayers follow in order to calculate and pay their taxes.
Charitable Deduction Tax deduction benefit one gets by donating towards an official religious organization.
Mortgage interest deduction Tax deduction benefit one gets if one has to pay a mortgage.
Deduction Amount of money taken from people in order to pay their taxes.
Preferred rate for capital gains Tax deduction benefits you get according to your kind of income: earned income or unearned income.
Tax rate The percentage of the value of a property to be paid as a tax.
Inflation a steady rise in the level of prices.
Salary a fixed amount of money paid regularly to a person for work.

 

Video for discussion

The following video is produced by Vox and discusses how tax cuts/breaks help the richest in society. Although the video is focussed on America many of the concepts can be transferred to many other countries.

First, have a read of the questions below for the video above. Have a guess to what the answers might be, it doesn’t matter if you don’t know but just guess. This is a good way to help you prepare for what type of answer you will be listening for. Then watch the video and find the answers to the questions below.

Video comprehension questions:

a) What is the one biggest problem that Americans have? Why?
b) Why does the Trump administration want to change the tax code?
c) Why is the charitable deduction not fair?
d) Why is the charitable deduction so expensive and unproductive?
e) What happened in the 1980s to the top tax rate in the US?
f) Why is tax credit such a good idea?
g) How much money does the Mortgage interest deduction cost to the US? Why is that awful?
h) According to the system, what produces deductions? Give examples.
i) Why does Warren Buffet pay fewer taxes than his personal secretary?
j) What did the presidents before Trump do to make the economy grow more?

If you’re finding it difficult to answer the questions, then have a look at the answers below.

ANSWERS

a) Income inequality, because richer people get richer at the expense of regular people.
b) To make sure wealthier people maintain their status and get even more money.
c) Because people who make more money get a higher deduction if they donate the same as a regular income person.
d) Because the country spends more than 70 billion dollars a year on it and doesn’t use that money to invest in school programs and grants.
e) It decreased significantly towards the earnings of wealthier individuals.
f) Because it will reduce the amount of money you owe equally to everyone according to their donations.
g) It costs a $100 billion per year and that money could be used to benefit the people directly.
h) Everything can produce deductions, like the food you buy or even the money you save.
i) Because he obtains unearned income while his secretary makes earned income.
j) Charge more money in taxes to the wealthier individuals of the country.

 

The pros of tax breaks on the wealthy

  1. It allows the rich to invest more in their businesses by paying less in tax. Their investment will allow companies to grow and wages to increase.
  2. The government already taxes people too much, a tax break will reduce their burden.
  3. The rich are the biggest payers of tax in a country and it is not fair for them to pay the majority of tax.
  4. The rich tend to spend more than other people. If they have more money they are then more likely to spend it.
  5. Governments already waste money. Giving them more money will only encourage waste.
  6. Increasing tax on the wealthy does not encourage them to work harder or to invest more to innovate.
  7. Increasing tax on a single group of people is very divisive.

The cons of tax breaks on the wealthy

  1. The more money the government has it can be used on improving infrastructure, healthcare, defense and many more social necessities.
  2. It can be used to redistribute money so that society is approximately moving together in how much wealth they have.
  3. The richest people in the world are dramatically wealthy. They cannot possibly spend or invest all of their wealth. Money is simply being hoarded.
  4. If there is not a tax on the rich, poorer people in society will be (and also feel) left out of the productivity gains in a country. They will not feel invested (in an economic sense) in their country).

Potential debating topics about tax breaks and wealth inequality

  1. Everyone should pay the exact same amount in taxes no matter how much they make because we are all ‘equal’.
  2. People should be able to have a final word on the things that the Congress or even the president might want to change.
  3. Tax should only be forced towards the wealthiest individuals.
  4. Richer people earn more because they work more than regular people, so of course, they should have more tax benefits.
  5. The government should spend less money on these tax benefits and invest that money in education, science, and health.
  6. Income inequality is not the biggest problem of the US: tax inequality is.
  7. These changes in the law are just “collateral effects” that should be tolerated for the greater good of the country.
  8. Rich people have businesses, enterprises and produce jobs, so in fact, they should benefit even more from the tax code modifications.
  9. Charitable deductions should not consider religious organizations as valid for donations, only charities.
  10. Regular people should just work “harder” to earn more money and therefore deserve more tax deduction benefits.

Conclusion

It’s your turn! Tax breaks certainly represent a controversial topic that everyone should get into because it has an influence on our life quality. Trump’s administration shows us how humans can become greedier even if they are already rich, but they also show us how important is to choose our leaders carefully and how we should work towards a more human and conscious system that helps us improve as a civilization.

Links for further reading

Tax breaks

Definition of tax breaks

From private school tax breaks to bigger inheritances, 7 ways rich people win big if tax reform passes

Tax Cuts Benefit the Ultra Rich, but Not the Merely Rich

Print Friendly, PDF & Email
Did you like this debates lesson? Help me continue to make great lessons by supporting this site through Patreon. Every donation will allow me to make more great materials.

Leave a Reply

Your email address will not be published. Required fields are marked *