Small businesses with fewer than 500 employees should be exempt from federal corporate income tax.

This debate resulted in a decisive victory for the Con side, primarily because the Pro position failed to overcome a fatal structural flaw in their proposal: the reality of how small businesses are currently taxed in the United States.

The Pro side opened with a standard, rhetorical appeal regarding the importance of small businesses as "job creators." However, Con immediately undercut this narrative by introducing the "pass-through" argument—noting that the vast majority of small businesses (LLCs, S-Corps, Sole Proprietorships) pay individual income tax, not corporate income tax. This technical reality check forced Pro into a defensive posture for the remainder of the debate.

Rather than refuting the technical mismatch, Pro pivoted in Round 3 to an argument of "behavioral economics," claiming the policy would incentivize small businesses to convert into C-Corporations to accumulate capital tax-free. While a creative recovery, Con dismantled this effectively by framing it as "social engineering" rather than genuine relief. Con successfully argued that a policy requiring the local plumber or family restaurant to undergo complex corporate restructuring to receive any benefit is fundamentally flawed.

Furthermore, Con’s argument regarding "fragmentation"—that large corporations would break into shell companies to exploit the employee cap—went largely unanswered by Pro. Pro’s reliance on the potential for future economic shifts could not compete with Con’s concrete evidence regarding current tax structures and the inevitability of tax avoidance schemes. The widening score gap in Rounds 3 and 4 reflects Pro’s inability to escape the corner Con painted them into regarding the irrelevance of the Corporate Income Tax to 96% of American small businesses.