Xinhua recently published a commentary after the U.S. Senate passed its version of the Trump Tax Cut bill. The commentary started with expressing doubt as to whether the U.S. House and Senate will be able to consolidate their two bills into one in time for Christmas because there are “big gaps on many details.” The commentary suggested that no one should overreact to the Trump Tax Cut since Obama had already started the tax reform before Trump took office and that the U.S. middle class and below could get “angry” about the new Tax Cut that mostly benefits the wealthy. This could mobilize the base of the Democratic Party to vote. So it is questionable how big the long-term impact will really be. However, the commentator expressed the strong belief that the U.S. tax cut could really intensify a wave of “tax cut competition” across the globe, which will worsen the financial situation of many nations. The United States should not be the one to trigger double-taxation and disruption to global supply-chains. Instead, the United States should be the leader of international tax coordination.
Source: Xinhua, December 4, 2017