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People’s Daily Comments: Will Trump’s tax reform be effective?

By Peng Fei (People's Daily Online)    15:56, August 24, 2017

(file photo)

Renowned American economist Joseph Stiglitz recently criticized President Trump’s tax cut policy, saying, “Donald Trump is counting on this package to make America great again. It won’t, because it never has.” In Stiglitz’s opinion, cutting taxes will benefit rich and large companies at the expense of ordinary people and small companies.

President Trump’s tax cut policy is not new. During the Reagan Administration, the former president’s neoliberal economic policy featuring tax cuts and deregulation was all the rage. Even though it did to a certain extent alleviate some pressing problems, its negative effects cannot be ignored, including decreased income of workers, intensified rich-poor polarization, and shrinking social welfare. From this perspective, the effectiveness of Trump’s tax plan remains to be seen.

In fact, many public policies are the result of bargaining and compromising among different interest groups. Just as what Stiglitz says, if someone benefits from the policy, there must be another party suffering some losses. Therefore, whether to or how to cut taxes cannot be determined by ideology or personal preference. Tax policy should maximize the public interest after a balance among different groups has been achieved. But for now, it is hard to tell if Trump did just that.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Du Xiaofei, Bianji)

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