The day before, the United States Tax Reform Act was amended several times by both houses, or will gradually implement. Since he took office, Trump has withdrawn from the TPP, the Paris agreement, the UNESCO and other initiatives, which have been dazzling but very few. How can tax cuts in the United States be affected by tax cuts or the biggest political results of Trump's office?

Positive and negative effects

Trump resorted to "sanbanfu" to promote economic growth in the United States: tax cuts, infrastructure investment and trade protection. According to the tax reform act, the enterprise income tax will be reduced from 35% to 20%, and the individual tax will be reduced from 7 to 4. The most direct benefit of tax reduction is the reduction of personal tax, which can promote consumption growth. The two is to reduce corporate income tax, which can stimulate investment in enterprises, thereby increasing employment and promoting economic growth.

However, the tax cut is Trump to promote a "medicine" out of the economic growth in the United States, but is the three drug "," disease "of the United States will bear? The most direct negative effect of tax reduction is to bring huge financial deficits. The US government, which is already struggling, will face more financial cliff problems. Tax cuts are not implemented, Trump himself admitted that the government shutdown is in sight. In order to prevent the government from being closed because of the dystocia of the expenditure bill, he urgently passed the transitional spending bill to ensure that the United States government was able to operate normally until December 22nd.

At present, the debt burden of the United States is more than 20 trillion dollars. The tax reduction bill will continue to accumulate debts and increase the fiscal deficit, which is worse than that on the basis of fiscal cliff. It is estimated that the US fiscal deficit could therefore push up to 6.1%, exceeded the international warning line two times, 20 trillion dollar debt as the fiscal cliff lake, the greater the plot.

The United States and the current tax cuts the active fiscal policy in parallel is the tight monetary policy, the Fed is out of intensive as previous round of quantitative easing monetary policy and the interest rate and reduced form, rapid rise in interest rates will in turn lower corporate investment, resulting in crowding out effect on investment, which greatly reduced the effect of tax cuts.

Multiple impact on China's manufacturing industry

Tax reform in the United States may not be as powerful as expected, but the impact on our manufacturing industry is still worth vigilant.

First of all, the personal income tax reform will greatly reduce the middle-class population over the tax burden, not only conducive to increase their income, the more wealth into re education skills upgrading, but also conducive to attracting more international high end talents into the United States, the advantage of talent competition of the American manufacturing industry will to further enhance, which would delay the conversion of China's manufacturing industry to a certain extent in the process of advantage.

Second, part of the middle and high end industries may accelerate outward transfer. Since Trump took office, the United States government has introduced a number of preferential policies to attract global manufacturing enterprises in the United States. For more than a year, Samsung, LG, Intel and apple in the United States have factories, Haier, Hisense, Fuyao and other high-end manufacturing enterprises in our country have also increased their investment in the United states. The new American enterprise income tax rate will be lower than the world's major industrial countries, and the attraction of the domestic high-end manufacturing enterprises will be further enhanced. In addition, in the field of advanced manufacturing, which is actively laid out in the new generation of information technology, intelligent equipment and new materials, foreign investment is an important driving force for the rapid development of the driving industry. The US collects lower remittance tax on overseas assets and replaces the overseas assets and facilities with the lower tax rate for non cash assets, which will inevitably impact the high-end manufacturing industry in China.

Thirdly, the growth of foreign capital in manufacturing industry will be further slowed down or even negative growth will appear. In 1~7 month of 2017, the actual use of foreign capital in China's manufacturing industry was 20 billion 480 million US dollars, which was down by 5.7% over the same period. Once the new tax reform program is landing, the ability of the us to attract foreign investment will increase significantly, which will directly weaken the ability of our manufacturing industry to attract foreign capital, and the growth rate of foreign capital utilization will further slow down or even suffer negative growth. For example, the United States overseas profits for multinational companies to lower the tax rate, to prevent the outflow of domestic capital, will reduce us in our willingness to invest in a certain extent; disposable overseas profits attracive remittance tax incentive in American multinational companies will profit to accelerate the transfer to the United States, reducing the willingness to invest in our country.

Calmly face the reform of tax and fee

In fact, before Trump came to power, China had actively promoted various tax cuts and reduced fees. The comprehensive upgrading of business transformation has brought industrial upgrading, structural optimization and entrepreneurial innovation. It has promoted the development space of the export-oriented economy and promoted the deep participation of Chinese enterprises in international specialization and division of labor and cooperation, which has brought long-term multiplier effect to the economy. In spite of this, we also need to respond objectively to the US tax cuts.

We will deepen the reform of the tax and fee system and reduce the burden of industrial enterprises in an all-round way. To implement a package of tax reform measures and to establish a preferential tax policy system for industrial enterprises. First, we should consider the needs of national financial expenditure and enterprise transformation and development, simplify the grade of VAT tax rate, and study the highest tax rate of VAT. Two, according to the follow-up progress of the US new tax reform plan and the possible global tax competition, we should make a plan for adjusting the enterprise income tax policy according to the progress of the domestic tax system reform. Three, we should comprehensively evaluate the implementation effects of all kinds of related preferential policies such as value-added tax and corporate income tax, and adjust or stop inefficient and ineffective policies, so as to allow room for tax cuts. Four is to continue to implement Sheqi fee list management, intensify efforts to clean up the administrative fees, clean up and standardize the intermediary service organizations, and all kinds of user fees, reduce service charges Sheqi management. Five, we should deepen the reform of social security system, speed up the overall planning of pension and the continuation of old-age insurance in different places, rationally use the supplementary pension of state assets, and guide social security funds into the market, so as to fill the gap of social security costs and appropriately reduce the burden of corporate social security.

The innovation of financial and tax policy supports the way to promote the industry to move towards the middle and high end. We should give full play to the guiding role of fiscal and tax policies, encourage local high-end manufacturing enterprises to stay at home, and constantly enhance core strengths in R & D, design, key technologies, quality, brand and service. First, we should implement and improve the first (set) major technology and equipment incentive policies, and improve the incentive and restraint mechanisms for developing and using units in product innovation, value-added services and demonstration applications. The two is to expand the fixed assets accelerated depreciation policy to all industrial enterprises, expand the scope of the R & D cost by 75% and deduct the scope of the policy from the small and medium-sized enterprises of science and technology to all small and medium-sized enterprises, and guide the transformation and upgrading of enterprises. The three is to innovate the way of using special funds, such as China's manufacturing 2025, strategic emerging industries and service industry development, highlighting performance oriented and improving the efficiency of fiscal funds. On the basis of this, we should strive to expand the scale of special funds in a timely manner. The four is to invest in a large scale, a long profit cycle and a strategic industry related to the lifeblood of the national economy. We should extend the corporate income tax loss and make up for the longest years and enhance the competitiveness of enterprises. The five is to improve the specialization and normalization level of government investment funds in emerging industries, advanced manufacturing, integrated circuit industry, small and medium-sized enterprises and other areas, increase investment returns, and leverage more social capital to support specific areas.

We should optimize the policy of foreign investment and promote the high level of the manufacturing industry to open to the outside world. We should speed up the reform of "putting the tube into service" to create a rule of law, internationalization and facilitation of foreign investment environment, and encourage overseas investors to expand investment in China and raise the level of foreign capital utilization. First, the negative list of foreign investment has been carried out in the national trade zone as soon as possible, so as to further enhance the transparency, standardization and fairness of the policy. The two is to further expand the scope of market access to the outside world and improve the service level of foreign investment. The three is to allow foreign invested enterprises to gain free access to normal profits in China and boost the confidence of foreign investment. The four is to reinvest the profits obtained from the territory of our country and comply with the relevant regulations. The deferred tax policy will not be collected for the time being

 This article is reproduced from China Industrial and economic information net