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Growth Needs Stock Market Boom And Tax Cuts (Continued)

2008/10/18 11:23:00 24

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Growth Needs Stock Market Boom And Tax Cuts.

"Construction finance" has been seen as the superiority of China's finance. After years of public finance objectives, the color of financial construction is still strong, which has submerged the public nature of finance.

However, not only the overall efficiency of government investment is lower than that of corporate investment, but also government investment spending will squeeze private investment, especially private enterprises.

Besides increasing disposable income, we should also enhance residents' optimistic expectations.

At present, it is particularly necessary and important to maintain the stability and prosperity of the capital market.

China's hundreds of millions of urban residents are the backbone of consumption. They invest most of their income in the stock market and expect to increase their value in order to increase their future consumption. However, the sharp decline of the stock market has ruthlessly eroded many years' income.

In this sense, the stock market needs to take the courage and determination of the US and Europe to deal with the financial tsunami, because protecting the residents' property income is to ensure China's economic growth.

Increasing investment in enterprises is the most typical way to reduce taxes.

After the financial crisis, the United States has made massive tax cuts and tax rebates several times.

Although both interest rate cuts and tax cuts have the effect of reducing the cost of enterprises, the effect of China's rate cut is obviously lower than that of tax cuts, because the enterprises that can get loans are mainly large state-owned enterprises.

Because of this, they are not sensitive to small changes in interest rates.

Private enterprises are much more sensitive to changes in interest rates. However, too high a threshold will allow private enterprises to borrow money, and interest rate changes will not be related to them.

Tax reduction is different, and its impact on all enterprises is parallel. When the economic situation is not good, reducing taxes increases the profit after tax, so that the profits of enterprises will not drop too much, which will help enterprises to preserve their strength.

More importantly, when the economy is down, we should shoulder the difficulties together.

If one side is aggravated by business difficulties, the other side will continue to increase taxes, which will further crack down on the confidence of enterprises.

The US rescue measures are worth learning. First, we have to act quickly, and the two is to exert great efforts.

Some may think that this scale is still not enough, but it seems to have done its best for the struggling US finance.

The financial crisis is fierce, but governance is relatively simple technically, but once the real economy is out of order, it will be more difficult to manage it.

China's last deflation began in 1997 and did not go out of its shadow until 2003.

Therefore, it is necessary to prepare for the rainy day. Now that we have reached a broad consensus to solve the chronic diseases of "size and non", the pformation of value-added tax and the adjustment of fiscal expenditure structure, it is time to take effective action.

(Jia Xiao)