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US tax cuts, why a lot of people China is very excited?
Source: | Author:liuhao402 | Publish time: 2017-12-06 | 475 Views | Share:
The American people, who have been very impressed by Trump, mostly hold a positive attitude toward this tax relief plan, except for some well-benevolent regulators who have benefited from it. Whether a country's public policies are competitive or not is not worse than each other, but a constant improvement. After the global economy entered the post-crisis era, it has become a global consensus that how to reshape the international competitiveness of economic policies instead of printing money alone.


Trump's tax cuts were passed in the U.S. Senate, which is beyond the expectation of many. Because when this proposal was first put forward, the tax relief plan just made of only one page of A4 paper was laughed at by people from all walks of life, including the Chinese people. What is even more unexpected is that the people most affected by this program are actually not the American people, but some of China. Some Chinese have given a fierce attack on Trump's irresponsible tax cuts.


Trump's tax relief program involves many areas, the most important are as follows:


First, efforts will be made to reduce the income tax on U.S. companies from the current 35% to 15%. After reducing the burden on U.S. companies and basically keeping the same with European corporate income tax, this tax reduction measure has greatly changed the competitive disadvantage at the institutional level in the United States from the corporate income tax itself. In particular, the policy of the tax relief program on the return of U.S. manufacturing is clearly of great benefit.


Second, it substantially reduced the income tax for the profits of overseas American companies repatriated to the United States, from 35% to 7% -14.5%. This is a great incentive for a large number of U.S. overseas companies to repatriate their profits back to the United States. In order to avoid high taxes, the top 500 US companies hoard profits overseas, according to Business Insider reports, UBS statistics as of the fourth quarter of last year, US companies hoarding overseas profits as high as 2.4 trillion US dollars, of which the highest 30 companies overseas retained profits totaled 1.4 trillion US dollars. Before tax cuts, these profits would have to pay more than 600 billion U.S. dollars if repatriated to the United States.


Thirdly, in the aspect of personal income tax, apart from drastically increasing the personal tax deduction, it also reduced personal tax from seventh gear to fourth gear, at 12%, 25%, 35% and 39.6% respectively. This effect is obvious for low-income groups and high-income groups. The biggest benefit of reducing taxes is, of course, conducive to stimulating US spending. Of course, during this process, many U.S. rich have made it clear that they are not willing to pay tax cuts for themselves. Such a high awareness truly shames many tycoons in China who often think of ways to evade taxes.


For Trump's tax cuts, the most criticized more than three:


First, the United States now has a total debt of more than 20 trillion U.S. dollars. It owes much to its debt. What does it mean to reduce taxes and what to pay after tax cuts? This kind of thinking apparently belongs to the concern and concern for the people, with particular concern that the American people can not afford the money. Second, they think Trump's tax reduction measures are unfair competition. You reduce the tax so low that the tax burden is high How to do? You have a tax cut, a large amount of international capital has been attracted to the United States, and manufacturing industries have gone back. This is undoubtedly a substantive "injury" to other countries. Third, you question the effect of tax cuts. Many experts cited the explanation from the Code that the tax reduction actually failed to stimulate economic development. The most commonly cited example is the very little effect of the tax cuts in the Reagan era. Fourth, the benefits of this tax relief to the rich are far outweighed by the poor , The United States 1% of the rich will receive more than half of the benefits of tax cuts.


However, no matter how many reasons, I still feel incredible is why many people in China reacted fiercely, very excited, and denounced Trump irresponsible. On the other hand, the American people, most Americans who have been very impressed by Trump, mostly hold a positive attitude toward this tax relief plan, except for some who have also benefited the well-to-do rich. The Democratic Party in the United States also did not strongly obstruct this proposal of tax reduction, which shows that tax reduction generally enjoys popular support. Enterprises, rich, ordinary people, have benefited from this tax relief program.


In fact, some people in China may not have to make any serious move to claim this as the largest tax reduction plan in the history of the United States. They think that the U.S. tax cuts will damage China's competitiveness. Whether a country's public policies are competitive or not is not worse than each other, but a constant improvement. Is there any tax reduction in the United States? Of course, the U.S. corporate income tax has been too high for Europe in the past, which is not conducive to the competitiveness of the United States and to 15%. The competitive disadvantage of China's corporate income tax comes out. The personal income tax, Increase the deduction, but also reduce the grade, the highest tax is 35%, while China's most expensive is 45%, and deductions have been criticized.


If we think that the U.S. tax cuts will attract some companies back to the United States, the correct approach should be to shape the competitiveness of their tax policies instead of criticizing the U.S. actions that will lead to "competitive tax cuts." In terms of international trends, which country is not tax? China has been tax-cutting for more than 10 years and every year, it emphasizes that tax cuts should be intensified. It can be said that after the global economy entered the post-crisis era, it has become a global consensus that how to reshape the international competitiveness of economic policies instead of merely printing banknotes. You do not cut taxes, others will cut, others get tax cuts to gain competitiveness, undoubtedly have competitive pressures on countries with overburdened taxes.


Well, let's dig our heart. For so many years, I have written a lot of articles on taxation. The core point of view is nothing more than the current tax revenue in China, whether it is the macro tax burden or the overall tax burden on enterprises, far surpassing that of many developed countries and their development Chinese home. Every time you talk about China's tax burden and tax pain index, you will come up with Forbes's global tax burden index many years ago. In this ranking, China ranks second in the world in terms of tax burden index.


Many people strongly disagree with this ranking because everyone thinks they should be number one instead of number two. In particular, the macro tax burden, I used to say, because China's tax is too complicated, if all the tax burden are calculated, the macro tax burden in China has already overtaken the United States and the United States. Most responsible scholars agree that China's macro tax burden should be between 37% and 40%. Many years ago, the World Bank's research shows that developing countries and developed countries have different "best macro tax burden levels." According to the conclusion of the World Bank, the best macro tax burden for low-income countries is about 13%; that for middle- and lower-income countries is about 20%; that for middle- and upper-income countries is about 23%; that for high-income countries is 30% about.


 




As a low-income country, macro-tax burden has long surpassed many high-income countries. Under such a high tax burden, it is not easy for enterprises to survive. What are the innovations and the transformation? I remember in 2011, a research report from Peking University's National Research Institute showed that 72.45% of SMEs in Jiangsu and Zhejiang in the past six months are expected to make no profit or a small loss in the next six months due to nearly half of their profits being invaded by taxes and fees. 6 months operating confidence is low; 3.29% is expected in the next 6 months may be a substantial loss or lockout, pessimistic about the future operation. In the case of a declining profit and a heavy tax burden, some SMEs can only give up their businesses and barely stick with industrial undertakings. Most of them rely on tax evasion and tax evasion. Many enterprises can survive, indeed rely on tax evasion for survival.


In this regard, it is undoubtedly the best choice for China to truly enjoy international competitiveness, tax cuts and a substantial tax cut. Whether it is to encourage manufacturing, encourage innovation, or encourage residents to spend, it is hard not to cut taxes. The debt burden of the United States is so heavy that there is still the courage to launch a tax relief program of this size. China's reluctant government debt risks are controllable and the ratio is appropriate, so why dare to come up with one of the most sincere tax cuts to enhance the international competitiveness of our tax policy? What?


For some people who attacked the U.S. tax cuts, a microblog we read yesterday that may have read millions may explain: "Why you should condemn the U.S. tax cuts because the United States should not cut taxes and the taxes themselves are not high. We are so high, We do not reduce, should not actually take to join in the fun! Do not scold you curse?
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