In recent years, for the reform of the manufacturing industry, both China and the United States have been vigorously carrying out the reform.

U.S.: Recently, the "massive tax cut" that has been mentioned frequently since Trump stepped into office recently ushered in the latest developments. On December 2, the U.S. Senate passed Trump's tax reform act, the largest U.S. tax relief program in 30 years. For the U.S. manufacturing industry, an "epic-class" good has moved closer and closer.
 
China: Although the tax relief plan is also mentioned, for Chinese enterprises, it is always felt that the thunderstorm is rather small. On the contrary, the impact of the "environmental storm" is even more real. In fact, one of the purposes of environmental remediation is to speed up the backward production capacity in the manufacturing industry so that it can regain its orderly and healthy competition.
 
In Xiaobian view, the two completely different ways, but the real purpose is to enhance the international competitiveness of their manufacturing industry, and this "tug of war", who will maximize the benefits it? The following brief analysis.

What will the U.S. "tax reduction policy" bring?

In the U.S. tax reduction policy, the biggest bright spot is the one-time reduction of the corporate tax rate from 35% to 20%. The implementation of this plan has triggered global boiling. What I mean in terms of such a tax relief program in the end.
 
1, the U.S. government revenue will really reduce it?
 
The answer is of course NO.
 
People's Daily said the tax relief plan will lead the U.S. government to reduce its fiscal revenue by 2 trillion to 6 trillion U.S. dollars in the next 10 years. This statement can only be based on the fact that the size of the U.S. economy and the profitability of enterprises do not change.

Laffer's economic common sense tells us that the relationship between tax rate and tax is not simply a linear relationship between the shift, but the limit under the constraints of the curve.
 
If the tax rate is not high, the tax scale will indeed increase with the tax rate. However, once the tax rate reaches the limit, the cost of the business will increase, the profit will fall, and even the problems of survival and development will arise. As a result, the tax base will inevitably start to increase with the tax rate The decline, the tax scale will also decline.

Laffer curve theory, it is the so-called supply-side reform of the most important theoretical basis. Such a massive tax cut by the U.S. government can basically be sure that it will surely make the future U.S. a tax haven.
 
The future of global high-quality companies will flock to the United States, the United States own business will be a large number of evacuation from overseas, return home. The total economic output of the United States is bound to rise by a large scale. As the economy grows in size, the total profits of enterprises and the total amount of personal income also increase greatly, and the total amount of tax increases inevitably on a large scale.

Therefore, in the future, the U.S. government's fiscal revenue will not only be reduced, but will increase on a large scale.

2, the United States future economic situation will be how?
 
People's Daily said the tax reform will overall increase the U.S. gross domestic product by 6.9 to 8.2 percentage points and add 2 million new jobs. Although this statement is conservative, but basically reliable.
 
As I have said many times, on a global scale, the regulation of the monetary policy on the economy has been completely nullified. The negative interest rate in Europe simply can not save the European economy. China's monetary policy will only cause economic chaos. This is the proof.
 
Under the prevalence of global universality, only by increasing people's income, raising the level of consumption and stimulating domestic demand and foreign demand can the economy be saved.
 
With such a large-scale tax cut by the United States, the profitability of enterprises will increase. Only when profit-making enterprises have risen, will they be able to develop new technologies, invest in new projects and expand their total output to boost employment.
 
Therefore, both the GDP growth rate and the employment level will undoubtedly have a more substantial increase. I am afraid to say what the future economic situation in the United States will be. However, it is certain that it will be better on the existing basis.

Vigorous "environmental war" behind the purpose of what is the reason?

Needless to say environmental protection, I believe that after this year, you are very impressed with the textile business owner. Many enterprises therefore closed, cut-off, production cuts, everywhere is complaining about the wailing everywhere, many small business owners go bankrupt overnight, local government is also a contradiction, it will directly affect the GDP, affecting tax revenue, maybe employment, maybe Will bring about social instability.
 
Why is the Central Government still going to attack this way?
 
1. Clear the spoilers of economic development - dirty and messy informal enterprises
 
In the early stage of reform and opening up, this type of enterprises undoubtedly played a significant role in economic development. They solved a lot of jobs, contributed a lot of taxes, and contributed a great deal of GDP. To this day, domestic enterprises need Transformation and upgrading, or else in the entire international market is not competitive at all.
 
However, the transformation and upgrading companies need to invest a lot of money, these funds come from? By lending? Borrowing is only a temporary measure, in the final analysis also requires businesses have huge profits, with profits to promote the transformation and upgrading. However, the current situation is that the profits of the entire production-oriented enterprises are not high, mainly due to the low sales price.
 
Why the sales price of the product is not high profit is very low? Mainly because of the existence of many market players. A formal enterprise need to pay taxes, need to invest in expensive environmental equipment costs, employees need to pay full insurance, high R & D costs, good working environment costs, safety costs, in order to ensure product quality and service have to have Expensive management costs, so the cost of formal enterprises is high.
 
And an informal business or workshops do not have these costs, even if there are few pitiful, such enterprises because the cost is relatively low cost for formal enterprises so much, so they can get sales at a low price, and regular In order to obtain the sales volume of an enterprise, it can only lower the price, which leads to the low sale price and low profit of the regular enterprise. So this phenomenon is extremely unfair to the formal enterprise. So there will be formal enterprises will also find ways to reduce operating costs, there have been tax avoidance, environmental protection equipment does not use, etc., will also find ways to reduce raw material costs, management costs, because only such a regular business as well Living space.
 
Therefore, at the present stage of economic development, the Central Government is also in a desperate need to cut off those irregular enterprises or gradually transform all enterprises into formal enterprises. At the same time, it can also eliminate some surplus production capacity and backward production capacity. Only in this way can we enhance the profits of enterprises so that enterprises have more funds invested in research and development, transformation and upgrading, and more benefits to employees. Only in this way can the entire domestic economy enter a virtuous circle. Let our business in the entire international market have real competitiveness.

2. Improve the employment environment of enterprises
 
For all enterprises is the most lack of talent, to develop a good talent companies need to spend many years, need a wide range of training and training, but also need to invest a lot of money, but often well-trained personnel Was hired by other small businesses for their high salaries because small businesses did not devote much time and money to developing their talent and digging people was the simplest, fastest, and lowest cost way possible. This also results in the unwillingness of formal enterprises to cultivate more talents. This is also an extremely unfair phenomenon.
 
For employers, we all feel now employees are very impetuous, always emotional, leave without permission, even if you do not want to quit well, people are more and more difficult to manage. Why does this happen? Mainly because there are too many informal businesses in the community, I left here to find work everywhere.
 
Therefore, the Central Government can only reluctantly deal with this phenomenon by reducing the number of informal enterprises and changing the missing persons. Although the disposal of a large number of informal enterprises and the reduction of jobs at the same time may also bring local turmoil to society, this is a no solution because only such enterprises can sink their heart and mind to train more talents, So that employees are not so impetuous, the economy can get better and more healthy development. Like the war of liberation, there were many people who sacrificed for the establishment of a new China, and only to end this pain in order to establish a sound and healthy market economy.
 
Xiao Biankan Kan: Due to the very different means, the policy of the praised voice is different. The tug-of-war between manufacturing industries in China and the United States has just begun. Who will ultimately bring the real economy of the country to the next level? It is still too early to fix its conclusion. Let us wait and see.