THE IMPACT OF TAXES ON TRADE COMPETITIVENESS

Stacie Beck and Alexis Chaves ()
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Alexis Chaves: Bureau of Economic Analysis

No 11-09, Working Papers from University of Delaware, Department of Economics

Abstract: Few macroeconomic studies exist on the effects of taxes on international trade. Our hypothesis is that higher tax rates raise a country’s production costs, leading to a decrease in exports in the long run. With panel data for 25 OECD countries, we use average effective tax rates on consumption, labor income and capital income to examine their impact on bilateral trade. We find that that all three types of taxes reduce the flow of international trade.

Keywords: tax ratio; average effective tax rate; international trade (search for similar items in EconPapers)
JEL-codes: C23 F10 H20 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2011
New Economics Papers: this item is included in nep-acc, nep-cse, nep-int and nep-pbe
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Citations: View citations in EconPapers (8)

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