After the US House of Representatives and the Senate successively passed their respective versions of the tax reform bill, the two houses of Congress began consultations on the final version of the tax reform on the 4th. If the largest tax reform bill in the United States in 30 years can be passed, it will be the biggest achievement of US President Trump in the past year. The spillover effect of "Trump tax reform" has become a global topic this past weekend.

After the House of Representatives passed the tax reduction bill last month, the Senate narrowly passed its own version of the tax reform bill with a vote of 5 1 49 on the 2nd.

Since the 4th, the two houses of Congress will hold arduous consultations to eliminate the differences between the tax reform versions of the two houses. At present, there are great differences between the two editions in many details, such as the adjustment of individual income tax level, the starting time of corporate tax reduction, and the relevant provisions of tax deduction.

The unified version reached after consultation will be submitted to the two houses for voting, and both houses will vote before it can be submitted to the president for signature into law. The new tax reform legislation is expected to be completed before Christmas at the earliest, and the possibility of delay until early next year is not ruled out.

In this regard, the financial market responded quickly. On the 4th, the US dollar index opened sharply higher, and crude oil and gold fell in succession.

Data Map: On August 1 1 day, in a golf club in New Jersey, USA, US President Trump spoke to reporters. Xinhua net fa

Depth analysis

The US tax reform may have a greater impact on the mid-term congressional elections next year, but the impact on the global economy should not be over-interpreted.

On the one hand, * * * and the Party have put tax reform on the agenda since they won the Senate and the House of Representatives in the late Obama administration. The so-called largest tax reform since the Reagan administration basically reflects the traditional policy proposition of * * * and the Party. * * * and the party can say that the tax reform has consolidated the basic disk of conservatives.

On the other hand, the "care" of this tax reform for large enterprises and high-income classes may make the middle and lower classes angry. According to the analysis of the Tax Policy Center of Washington think tank, most of the income from tax reduction will be obtained by high-income families, which may aggravate the polarization between the rich and the poor and social contradictions in the United States. In addition, Trump's popularity among American liberal voters is relatively high. This time, the Senate Democrats rarely voted against it. This means that tax reform may aggravate the "pendulum effect" and stimulate voters who support the Democratic Party to vote.

Economically, the impact of tax reform should not be overestimated. According to the analysis of independent analysis institutions of different parties, the short-term pulling effect of the tax reform on the economy will not exceed 0.1percentage point at most, and in the long run, the debt increase will be detrimental to economic growth. It is still difficult to say whether the reduction of corporate tax rate will change the current investment behavior of enterprises.

First comment

Although it is still difficult to determine how much it will boost the economy, the US tax cuts may aggravate the global competitive tax cuts.

International tax loopholes enable multinational companies to avoid tax crazily. Competitive tax reduction may worsen the financial situation of governments, and competing for tax base may lead to double taxation, supply chain distortion and other problems. Therefore, the tax issue is not only an internal affair of a country, but also a multilateral issue requiring international cooperation.

In the era of economic globalization, especially with the rapid development of the more mobile digital economy, the coordination of international taxation has become increasingly serious. The United States should not join the global competitive tax cuts, but should become a key force leading the global tax coordination.

Background link

The purpose of this US tax reform is to make the US corporate tax rate more competitive than other countries by simplifying the tax law, encouraging enterprises to increase investment and stimulating residents' consumption. The main contents include the following three aspects:

First, in terms of personal income tax, the House version simplified the federal personal income tax rate from 7 to 4, and the highest federal personal income tax rate remained unchanged at 39.6%; The Senate version still maintains the federal personal income tax rate of 7 grades, but the highest federal personal income tax rate has dropped to 38.5%.

Second, the enterprise income tax will be greatly reduced from 35% to 20%. In addition, the US$ 2.6 trillion of profits currently hoarded overseas by multinational companies for tax avoidance can be legally remitted back to the United States by paying14% in one lump sum.

Third, change the current global taxation system into a territorial taxation system, and exempt the dividend income tax of overseas subsidiaries. At the same time, however, this tax reform has increased the "execution tax" by 20% for multinational enterprises, so as to restrict these enterprises from avoiding taxes through internal transactions with branches outside the United States.

We are concerned about the impact of their reform on our country.