THE ROLE OF THE VALUE ADDED TAX IN INTERNATIONAL TRADE
Abstract
The thesis develops an explicit international trade model which is utilized to determine the effects of value added taxation on the international terms of trade. In its most advanced stage, the model is a two-country, three-good model where the third good is nontraded and nontaxed, a situation analogous to the current treatment of services. The conclusion in this situation is a deterioration in a nation's terms of trade will result from the imposition of a value added tax or further increase in the rates of an already existing tax. The thesis examines the implications of this result for international tax harmonization efforts; both in the European Community which relies heavily on the value added tax for this purpose and for a proposed federal value added tax in the United States.
Degree
Ph.D.
Subject Area
Finance
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