TY  - JOUR
AU  - Sinn,Hans-Werner
TI  - Can Direct and Indirect Taxes Be Added for International Comparisons of Competitiveness?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3263
PY  - 1991
Y2  - March 1991
UR  - http://www.nber.org/papers/w3263
L1  - http://www.nber.org/papers/w3263.pdf
N1  - Author contact info:
Hans-Werner Sinn
Ifo Institute -
Leibniz Institute for Economic Research
at University of Munich
Poschingerstr. 5
81679 Munich
GERMANY
Tel: 49-89-21802748
Fax: 49-89-397303;49-89-8506434 (home)
E-Mail: sinn@ifo.de
AB  - While it is usually argued that direct and indirect taxes should be added for meaningful international comparisons of country competitiveness, this paper argues that the opposite may be true. It is possible that a country with a high value-added tax needs a high capital income tax to maintain its international competitiveness and vice verca. Which view is correct depends on which combination of the origin, destination, source and residence principles' prevail and whether or not accelerated depreciation is allowed. Using a Heckscher-Ohlin model with international capital movements the paper studies the relevant alternatives in detail.
ER  -