US tax overhaul's lure could be deceptive

Chinese scholars said market expectations should remain objective on Washington's approval of a tax overhaul and they expect its benefits targeting special groups in the United States will be limited.

Despite the PR effect marking the US as an attractive business location, the nominal 15 percentage point reduction of the corporate tax rate may only mean a real decrease of 2 percentage points in tax payments, according to the US Congressional Budget Office, because the tax base has simultaneously been enlarged, said Liu Shangxi, head of Chinese Academy of Fiscal Sciences.

Investors will carefully calculate the real effects before making any decision to shift capital to the US just for tax avoidance, taking into consideration factors such as the market potential, infrastructure construction and other business favorable conditions, he said.