The Impact on Investment of Replacing a Retail Sales Tax With a Value-Added Tax: Evidence From Canadian Experience
Over a decade ago, several Canadian provinces replaced their retail sales taxes with value-added taxes. This paper estimates the effects of this tax substitution on business investment in these provinces. Consistent with standard investment theory, we find that the reform led to significant increases in machinery and equipment investment, at least in the short run. This evidence suggests that such a reform in a U.S. state with a similar retail sales tax may also be expected to result in increases, possibly substantial, in its capital stock.
Volume (Year): 62 (2009)
Issue (Month): 4 (December)
|Contact details of provider:|| Postal: 529 14th Street NW Suite 750, Washington DC 20045|
Web page: https://www.ntanet.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Besley, Timothy J. & Rosen, Harvey S., 1999.
"Sales Taxes and Prices: An Empirical Analysis,"
National Tax Journal,
National Tax Association, vol. 52(2), pages 157-178, June.
- Timothy J. Besley & Harvey S. Rosen, 1998. "Sales Taxes and Prices: An Empirical Analysis," NBER Working Papers 6667, National Bureau of Economic Research, Inc.
- Alan J. Auerbach & Kevin A. Hassett & Stephen D. Oliner, 1994. "Reassessing the Social Returns to Equipment Investment," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 789-802.
- Alan J. Auerbach & Kevin A. Hassett & Stephen D. Oliner, 1992. "Reassessing the social returns to equipment investment," Working Paper Series / Economic Activity Section 129, Board of Governors of the Federal Reserve System (U.S.).
- Alan J. Auerbach & Kevin A. Hassett & Stephen D. Oliner, 1993. "Reassessing the Social Returns to Equipment Investment," NBER Working Papers 4405, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:62:y:2009:i:4:p:591-609. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ann Crampton)
If references are entirely missing, you can add them using this form.