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Tax Harmonization in Europe and U.S. Business

1 min readBy: TF Staff

Download Research Publication No. 16, Part 1 Download Research Publication No. 16, Part 2

Research Publication No. 16

Foreword The European Economic Community member countries, West Germany, France, Italy, Belgium, the Netherlands, and Luxembourg, are scheduled to adopt a common value-added taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. system by January 1, 1970. The value-added tax has been discussed in a previous Tax Foundation publication, “Federal Non-Income Taxes.”

The purpose of the present study is to analyze the effect European tax harmonization is expected to have on U.S. business. The Unites States, which for over thirty years has been working to reduce barriers to international trade, faces a particularly difficult problem of non-tariffTariffs are taxes imposed by one country on goods or services imported from another country. Tariffs are trade barriers that raise prices and reduce available quantities of goods and services for U.S. businesses and consumers. barriers in the form of European border taxes. The border tax issue requires detailed work and discussion in the choice of U.S. policies that might effectively offset trade distortions resulting from European tax harmonization.

Dr. Guenter Schindler, Senior Research Analyst, had primary responsibility for drafting this study.