The Heated Debate over U.S. New Tax Law: Wealth Distribution and Industrial Restructuring amid Political-Business Game

In 2025, a seismic upheaval swept through the U.S. tax landscape. The "Big and Beautiful" Tax and Spending Bill signed by the Trump administration, coupled with the significant adjustments to tax standards for the 2026 tax year by the Internal Revenue Service (IRS), propelled the United States into the deep waters of global tax system reform. This transformation has not only sparked intense debates between the political and business circles but also laid bare the deep-seated contradictions among wealth distribution, industrial competitiveness, and national fiscal needs.

I. Wealth Distribution: The Ultimate Showdown between Equity and Efficiency

The core controversy surrounding the "Big and Beautiful" Bill lies in its impact on wealth distribution. The bill makes permanent the tax cuts implemented during Trump's first term, while simultaneously slashing nearly $1 trillion in welfare programs such as Medicaid and food assistance, leading to a multi-trillion-dollar expansion of the national debt. This combination of "tax cuts + welfare cuts" has triggered a strong backlash among the public. The latest polls show that 63% of Americans view the bill as a "boon for the rich" rather than the "victory for the working class" claimed by the Republican Party.

The contradictions in wealth distribution within the bill are vividly reflected in its tax rate structure. Although the top marginal tax rate of 37% remains unchanged, the income thresholds for this rate have been significantly raised. In 2026, this rate will only apply to single taxpayers with an annual income exceeding 640,000,whilemarriedcouplesfilingjointlywillneedanannualincomeexceeding760,000 to be subject to this rate. Meanwhile, although middle- and low-income groups benefit from the increase in standard deductions, the cuts in welfare programs such as Medicaid offset some of the tax cut effects. Nobel laureate in economics Joseph Stiglitz bluntly stated, "This design allows the ultra-rich to continue enjoying low tax rates while ordinary families bear the cost of fiscal adjustments."

The wealth distribution controversy at the corporate level is equally intense. The bill abolishes the clean energy tax credits introduced during the Biden administration and instead increases funding for defense and border security. Companies like Tesla have warned that rising tariff costs and the cancellation of subsidies will force them to relocate production lines overseas. This "protecting the old while abandoning the new" industrial policy has been criticized by the Democratic Party as "trading future debt for current votes."

II. Industrial Competitiveness: The Dual Challenges of Low Tax Rates and Rule Restructuring

The original intention behind the reform of U.S. corporate income tax was to enhance global competitiveness. The 2017 Tax Cuts and Jobs Act reduced the corporate tax rate from 35% to 21%, making the U.S. tax rate more attractive on a global scale. However, this unilateral tax cut strategy is now facing challenges from the restructuring of international rules.

The "Global Minimum Corporate Tax Rate of 15%" rule led by the Organization for Economic Cooperation and Development (OECD) has compelled the United States to adjust its tax system in 2025. The new tax law requires multinational corporations to disclose more information about their overseas profits and introduces the "Global Anti-Base Erosion Rules" to prevent profit shifting. This combination of "domestic tax cuts + international compliance" has subjected companies to dual compliance costs. A financial director of a tech giant revealed, "We need to maintain our low tax rate advantage while meeting the OECD's information disclosure requirements, which has increased our tax compliance costs by at least 20%."

The contradictions in industrial policy are particularly prominent in the manufacturing revival plan. Although the bill provides research and development tax credits, the cancellation of clean energy subsidies has led to a decline in investment in the photovoltaic industry. A CEO of a solar energy company stated, "For every solar panel we produce, we have to pay an additional 3% in tariffs, and the cancellation of subsidies has reduced our project return on investment from 18% to 12%." This policy flip-flopping has put the United States at risk of being overtaken by China and the European Union in the new energy sector.

III. National Finance: The Balancing Act between Deficit Expansion and Debt Sustainability

The fragility of U.S. finances has been laid bare under the new tax law. Although the 2026 tax standard adjustments cover more than 60 provisions, the permanent elimination of personal exemptions and the continuation of itemized deduction limits mean that fiscal revenue growth will rely heavily on high-income groups. However, the tax avoidance methods of the ultra-rich are becoming increasingly sophisticated. A 2024 IRS report shows that among the 250 largest companies in the United States, 17 have not paid corporate income tax for three consecutive years, including well-known companies such as General Electric and Boeing.

Debt sustainability has become a core concern for policymakers. The bill is projected to increase the national debt by $4.5 trillion over the next decade. The combination of increased defense spending and the cancellation of clean energy subsidies has been criticized by economists as "trading future debt for current votes." The Federal Reserve has warned, "If the proportion of national debt to GDP continues to climb, the credit of the U.S. dollar and its status as a global reserve currency will be threatened."

IV. From Zero-Sum Game to Rule Restructuring

In this tax law transformation, a clear trend has emerged: simple tax cuts or welfare cuts can no longer meet the needs of the digital economy era. Cases such as the European Union's cancellation of tariff exemptions for Ukrainian agricultural products and the signing of a free trade agreement between the United Kingdom and India indicate that the core of future tax law competition will shift to "rule-making power"—whoever can build a more transparent, inclusive, and technology-trend-aligned tax system will gain the upper hand in the restructuring of the global industrial chain.

For U.S. companies, this presents both challenges and opportunities. The case of Rayneo Innovation attracting 70% female users on Kickstarter through personalized services proves that by deeply binding to specific scenarios and achieving technological breakthroughs to build differentiated advantages, companies can carve out new niches amid the competition among giants. Moreover, the accelerated implementation of the principle of taxation by law in China provides stable institutional guarantees for such innovation.

The ultimate goal of tax law reform should not be a weapon for zero-sum games but a lever to promote inclusive global economic growth. Only when policymakers can transcend short-term interests and find a balance point among tax equity, industrial upgrading, and social well-being will true winners emerge.