China seems to be doing a thing or two that make more sense than anything our government is doing. For one, instead of heavily subsidizing their auto industry, the Chinese decided to cut their auto retail taxes in half. As a result, Chinese auto sales in February were up 25% over the year before.
China also figured out how to get more investment. It has talked in the past about imposing a capital gains tax, but has never done so. Short term or long term. As a result, China's investment and stock market are up, while ours are down — just like Taiwan's is ever since they imposed a capital gains tax. China also noticed the real estate market was chilled by increased real estate taxes.
Bottom line: China has figured out cutting taxes is the way to stimulate the economy, and imposing taxes is a good way to kill economic growth. About all this, Don Surber notes that
50 years ago, President Eisenhower dreamed of the day when China would abandon communism in favor of capitalism.That dream is coming true.
Little did he know that we would be doing the reverse.
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