Massive Tax Cuts In The United States Affect Major Or Profoundly Changing Global Economic Trajectory.

Trump is worthy of being a net red, taking the lead position in minutes.

He broke some routines of American traditional politicians, and completed a counterplan against a "special" president from a "unreliable" president, and launched a record large tax cut plan in the US, which lowered the corporate income tax from 35% to 15%.

The importance of Trump's tax cuts not only affects the American people, but also profoundly changes the trajectory of the global economy.

At present, the interpretation of Trump's tax reduction scheme is rather negative and even considered to be a big conspiracy.

From the perspective of national competition and policy game, we must continue to fight tax wars after the currency war. The Trump tax cuts may lead to global tax cuts or competition.

The depreciation of the currency and the massive influx of global businesses and capital into the United States are external financial risks that the emerging market has to pay attention to.

However, such a far-reaching and far-reaching policy on massive tax cuts in the United States should not be a blind eye.

Let's take a look at the historical experience. The last large-scale tax reduction plan in the United States was also made by the Republican Party, in the 80s when Reagan was in power.

At that time, the United States experienced Keynes doctrine after World War II, artificially stimulated demand, experienced the oil crisis of the 70s of last century, the US economy was stagflated, effective demand was insufficient, and inflation was high.

At that time, representatives of the supply school pioneers Mundel, laver and Kemp advocated tax cuts to promote economic growth.

Reagan used massive tax cuts and tight money supply to tackle the problem of stagflation. The tax reduction brought about a period of over 20 years of economic prosperity. The US internet bubble burst from 1982 to 1999. The spillover effect of the US economy led to the economic takeoff of the four Asian dragons and the global economic growth.

In 1984, the US economic growth reached the fastest growth rate in 50 years, with inflation excluding 6.8%.

At that time, the chairman of the Federal Reserve was Volcker, pursuing tight monetary policy and controlling inflation. The global economy entered a golden era of low inflation and high growth.

The Reagan School of supply has abandoned the demand side stimulus of Keynes doctrine, but it can hardly keep up because the fiscal deficit is increasing.

At the last moment, the US economy grew strongly, and when Clinton came to the US, the US fiscal surplus had already been realized.

Trump's tax cuts are also facing the lack of effective demand in the global economy and excess capacity. The only difference is that inflation pressure is very small.

Trump not only made massive tax cuts on the supply side, increased savings and purchasing power, increased effective demand, but also expanded demand side and pushed trillions of dollars in infrastructure investment and renewal plans.

But this time, the difference is that the United States has huge debt problems. The key is how long Trump can stay.

From another point of view,

The catfish effect of tax cuts may bring a new wave of global structural reform.

Structural reform is the consensus reached by the G20 summit in Hangzhou.

Since the global financial crisis in 2008, the major global economies, including the United States, have adopted a large amount of liquidity to prevent the spread of the economic crisis.

Although the US quantitative easing has brought economic recovery and the bull market of the Dow Jones index for a period of 8 years, it has also brought about problems such as the polarization between the rich and the poor, the debt crisis and the difficult trend of economic recovery. It is necessary to promote structural reform and expand effective supply.

Although the US tax reduction plan has some negative impacts on the economies of various countries in the short term, it will promote structural reforms in many countries in the medium to long term.

Pressure has become the driving force of reform, the tax burden of enterprises has been reduced, and the income of residents has increased. It will make the cake of the global economy bigger, and it is a medium and long-term impetus to global economic growth.

China is also carrying out tax reduction and supply side structural reforms to increase taxes and increase taxes. China's tax reduction is mainly to reduce business tax, while the US tax reduction is mainly to reduce income tax. Unlike the United States, the structural reform and the strategy of "one belt and one road" will further open up the economy.

After the global financial crisis, the debt of every country has increased substantially. Structural reform will provide impetus for the endogenous growth of the global economy, and residents will continue to increase their savings and businesses.

After the economic growth has entered a virtuous circle, the debt problem will gradually be solved. The key to the tax reduction is to persist.

From this perspective, the US tax cuts are positive for global economic growth, and the US economy is likely to regain strong growth.

Trump, who has always been cautious, is confident that the US Dow Jones index will reach 100 thousand points. A shares should not be too pessimistic.

However, Trump is the biggest challenge for us to pursue the priority of the United States, unwilling to ride other people's free cars and carry out trade protection.

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