久久久无码人妻精品无码_6080YYY午夜理论片中无码_性无码专区_无码人妻品一区二区三区精99

Global EditionASIA 中文雙語Fran?ais
Opinion
Home / Opinion / Op-Ed Contributors

Trump's tax cut bill more of a political game

By He Weiwen | China Daily | Updated: 2017-12-20 08:51
Share
Share - WeChat

The year 2017 is coming to an end amid a couple of economic shocks. With the Conference Committee of the US Congress passing the bill for the Tax Cut and Jobs Act of 2017 on Dec 15, worries are mounting across the world on its possible ramifications, including global tax competition, capital flows into the United States, possible shift of manufacturing investment back to the US, and the rise of the dollar against other currencies, especially the renminbi.

However, looking at the serious economic implications and constraints, the bill doesn't appear as significant as described by US President Donald Trump and the Treasury Department.

First, the effect of corporate tax cut will be limited. The bill will reduce the corporate tax from a maximum of 35 percent to 21 percent. But the current actual corporate tax level is already very close to 21 percent, instead of the nominal 35 percent. Due to various tax incentives, rebates, credit and rational evasions, the actual total corporate tax levied in 2014 was $505.3 billion on a total pretax corporate income of $2,140.6 billion, or an average corporate tax rate of 23.6 percent. The rate increased to 24.0 percent in 2015 and then dropped to 22.7 percent last year.

During the third quarter of this year, the total annualized pretax corporate income was $2,215.0 billion, with a total tax of $476.4 billion levied-or an average corporate tax rate of 21.5 percent. To minimize the increase in federal budget deficit, the final version of the tax cut bill will most probably eliminate all the tax rebates and credit. In that eventuality, the corporate tax will release only limited money for additional investment.

Second, the main trouble in the US' capital investment is not a shortage of capital, but a shortage of demand. By the end of last month, the Dow Jones Industrial Average index had shot up 86.4 percent since the end of 2013. On the other hand, by October this year, the US industrial production index was just 6.1 percent higher than 2012, and the manufacturing production index was only 4.8 percent higher. Apparently, the largest share of the capital resources moved to the stock markets in search of higher profits. Limited tax cuts are unlikely to change the pattern.

Third, the tax bill is also less likely to bring about any phenomenal increase in consumption. Most of the personal income tax cuts will be for the rich, with the middle class getting only a "trickling benefit". A study shows that, according to the tax bill, the income of the richest 1 percent of the American population will increase by 8.3 percent on average, or $130,000 per family, while the poorest 95 percent's income will increase by only 1.2 percent. Since the very rich don't use the extra money on "mass" consumption, and the limited income increase for the middle class will not be enough for much higher consumption, the tax cut is less likely to result in a phenomenal rise in personal consumption.

Fourth, the increase in federal budget deficit will sooner or later result in the shelving of or a change in the tax cut regime. Even President Ronald Reagan, after having approved tax cuts in the 1980s when the federal government public debt was less than 30 percent of GDP, had to selectively hike taxes after public debt increased from $1 trillion to $3 trillion.

The US federal government public debt is already 103 percent of GDP, leaving little room for revenue cuts. The federal budget deficit in fiscal 2017 was $665.7 billion, or 3.5 percent of GDP, already above the baseline of 3 percent. And Kelvin Bradley, chairman of the House Ways and Means Committee, has estimated that the proposed tax cuts will add another $1.5 trillion to federal government debt over the next 10 years.

However, the US Treasury Department has presented a rosy picture, saying the tax cut-induced boost to GDP growth will generate more tax income for the federal government and finally balance out the budget. This is extremely questionable. Since corporate tax accounts for less than 10 percent of the federal government's fiscal income, the increase in its tax revenue, if any, will be far from enough to fill the gap. And personal income tax, the main source of budget revenue, by no means presents an optimistic picture. Because of the drastic cut in the tax imposed on the rich and the scrapping of the heritage tax (an important source of government revenue), a solid increase in tax revenue doesn't seem likely.

In such an event, the federal government will have to issue more Treasury bills to cover the budget deficit, or increase the social security contributions. In the former case, the extra money released by the proposed tax cuts will be sucked back into the Treasury Department to make ends meet. In the latter case, additional burdens will be imposed on the middle class, which will reduce their incomes. In any case, the effect of the tax cuts will be smaller.

Fifth, the trade deficit will tend to increase. Experiences from the tenures of former US presidents Ronald Reagan and George W. Bush show that the tax cuts did spur growth in the short term, but in the long run, they greatly increased the trade deficit. Following Bush's tax cut, the GDP growth rate accelerated from zero in 2001 to 4.4 percent in mid-2004. During the same period, the growth rate of US imports from Germany, too, accelerated from minus 12 percent to 22 percent, and that from Japan rose from minus 21 percent to 13 percent. This scenario conflicts with the Trump administration's central goal of trade balance. Therefore, the Trump administration is likely to launch trade protection measures more extensively, which in turn will drag down economic growth.

The economic benefits of the proposed tax cuts, to say the least, are doubtful. The University of Chicago conducted a survey of 38 leading economists, 37 of whom disagreed with the tax bill. We should therefore reserve our judgment on the benefits of the tax bill.

The tax bill, however, is very significant politically. The political priority of the Republican Party is to maintain majority in both houses of the Congress in the mid-term election in November 2018. Since the Republicans failed to totally scrap "Obamacare" (Patient Protection and Affordable Care Act), the only powerful tool they now have is the tax bill. The success of the bill will help the Republicans politically, at least in the next 11 months.

Moreover, the tax cut menu favors the rich, whom Trump represents. If the tax bill becomes law, the Trump administration could start redistributing national and social wealth more among the rich, and less among the poor and middle class.

Trump won the presidential election on the promise of helping the poor. But he is doing just the opposite. His pro-rich measures will have serious consequences for his presidency in the long run, because the further widening of the social income gap will become an almost insurmountable problem for him.

The author is senior fellow at the Center for China and Globalization.

Most Viewed in 24 Hours
Top
BACK TO THE TOP
English
Copyright 1994 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US
久久久无码人妻精品无码_6080YYY午夜理论片中无码_性无码专区_无码人妻品一区二区三区精99

    欧美三级午夜理伦三级富婆| 波多野结衣xxxx| 久久久一本二本三本| 蜜臀av免费观看| 免费观看亚洲视频| 北条麻妃av高潮尖叫在线观看| 奇米精品一区二区三区| 性chinese极品按摩| 轻点好疼好大好爽视频| 奇米影视四色在线| 真实国产乱子伦对白视频| 牛夜精品久久久久久久| 成年丰满熟妇午夜免费视频 | 国产一级大片免费看| 成年人视频观看| 欧美视频亚洲图片| av片中文字幕| 免费观看中文字幕| 日本一本二本在线观看| 色一情一乱一乱一区91| 天天影视综合色| 分分操这里只有精品| 三日本三级少妇三级99| 国产3p露脸普通话对白| 天堂av8在线| 欧美一级视频免费看| 一本二本三本亚洲码| 国产极品美女高潮无套久久久| 欧美午夜aaaaaa免费视频| 国产精品一线二线三线| 国产成人亚洲综合无码| 小早川怜子一区二区三区| 好男人www社区| 亚洲人成无码网站久久99热国产 | 国产免费色视频| 少妇激情一区二区三区| 三级网在线观看| 在线观看国产中文字幕| 国产又粗又爽又黄的视频| 久久99爱视频| 成人午夜免费在线视频| 男同互操gay射视频在线看| 国产又粗又长又爽又黄的视频| 欧美三级理论片| 天天插天天操天天射| 男人女人黄一级| 日本激情视频在线| 美女网站色免费| 三上悠亚在线一区二区| 国产福利在线免费| 狠狠躁狠狠躁视频专区| 国产精品亚洲a| 亚洲熟妇av一区二区三区| 91免费黄视频| 久久久久久av无码免费网站下载| 欧美日韩午夜爽爽| 欧美激情第一区| 国产又黄又爽免费视频| 韩国黄色一级大片| 影音先锋男人的网站| 国产精品视频二| 在线观看成人免费| 91视频成人免费| 欧美 日韩 国产 在线观看| 欧美少妇一区二区三区| 一区二区三区一级片| 欧美日韩中文字幕在线播放| 91香蕉视频导航| 成人亚洲视频在线观看| 亚洲黄色小视频在线观看| 99精品视频国产| 日本wwwcom| 亚洲一级片av| 五月天婷婷亚洲| 亚洲一二三不卡| 91亚洲精品久久久蜜桃借种| 一级黄色片在线免费观看| av在线网址导航| 400部精品国偷自产在线观看| 男人天堂手机在线视频| 国产又黄又爽免费视频| 国产美女主播在线| 狠狠爱免费视频| 自拍偷拍一区二区三区四区| 欧洲美女亚洲激情| 一级黄色免费在线观看| 日本五级黄色片| 日本国产中文字幕| 国内性生活视频| 亚洲色图38p| 亚洲五月激情网| 人人妻人人澡人人爽欧美一区| 国产主播在线看| 亚洲制服中文字幕| 久久综合九色综合88i| 少妇高清精品毛片在线视频 | 国产成人一区二区三区别| 国产精品欧美激情在线观看| 国产精品视频一区二区三区四区五区| 国产免费人做人爱午夜视频| 视频一区二区视频| 2022亚洲天堂| 香蕉视频色在线观看| 日韩精品在线观看av| 成 人 黄 色 小说网站 s色| 日韩精品在线视频免费观看| 欧美精品一区二区三区免费播放| 亚洲人视频在线| 精品国产一二三四区| youjizz.com亚洲| 免费观看成人在线视频| 91pony九色| 欧美做暖暖视频| avav在线看| 国产在线无码精品| 任你操这里只有精品| 51xx午夜影福利| 国产超碰在线播放| 97超碰在线人人| 向日葵污视频在线观看| 国内自拍中文字幕| 黑森林精品导航| 亚洲国产精品久久久久婷蜜芽| 亚洲欧美一二三| 亚洲欧美另类动漫| 日本网站免费在线观看| 丰满女人性猛交| 日本va中文字幕| 日本丰满少妇黄大片在线观看| 99精品视频播放| 蜜臀在线免费观看| 伊人国产在线视频| 尤物av无码色av无码| 8x8x成人免费视频| 欧美激情精品久久久久久小说| 天堂8在线天堂资源bt| 中文字幕视频三区| av片中文字幕| 黄色免费观看视频网站| 91精品国产吴梦梦| 男人插女人下面免费视频| 亚洲熟女乱色一区二区三区| 黄色录像特级片| 欧美日韩一级在线| 国产色一区二区三区| 艳母动漫在线观看| 黑森林精品导航| 日韩福利视频在线| 无码人妻h动漫| www一区二区www免费| 国产成年人在线观看| 老太脱裤子让老头玩xxxxx| 午夜av中文字幕| 成人免费观看视频在线观看| 国产欧美日韩网站| 污污视频网站在线| 黄色三级视频片| 91国视频在线| 色偷偷中文字幕| 国产高清999| 国产在线视频三区| 精品国产无码在线| 一道本在线免费视频| 国产99久久九九精品无码| 男女激情无遮挡| 能在线观看的av| 国产福利一区视频| 亚洲久久中文字幕| 亚洲欧美自偷自拍另类| 国产三级三级看三级| 日韩欧美xxxx| 女人和拘做爰正片视频| 无码人妻丰满熟妇区毛片| 成人三级视频在线播放| 动漫av网站免费观看| 欧美韩国日本在线| 欧美精品第三页| 视频二区在线播放| 日韩成人精品视频在线观看| 国产福利在线免费| 污视频网址在线观看| 欧美日韩视频免费| 婷婷无套内射影院| 91成人在线观看喷潮教学| 久久久999视频| 老熟妇仑乱视频一区二区| 免费日韩中文字幕| www.99r| 视频免费1区二区三区| 手机av在线网| 尤物网站在线看| 好吊色这里只有精品| 懂色av粉嫩av蜜臀av| 99久久久精品视频| 日本成人在线免费视频| www.午夜色| 欧美做受777cos| 131美女爱做视频| 邪恶网站在线观看| avove在线观看|