In the increasingly global economy, domestic tax policies have taken on
a new importance for international economics. This unique volume
compares the tax reform experiences of Canada and the United States, two
countries with the world's largest bilateral flow of trade and
investment.
With the signing of the U.S.-Canada Free Trade Agreement and the tax
reforms of the 1980s, there has been some harmonization of tax systems.
But geographic, cultural, and political characteristics shape distinct
national social policies that may impede harmonization. As the U.S. and
Canadian economies become even more integrated, differences in tax
systems will have important effects, in particular on the relative rates
of economic growth.
In this timely study, scholars from both countries show that, while the
United States and Canada exhibit similar corporate tax structures and
income tax systems, they have very different approaches to sales tax and
social security taxes. Despite these differences, the two countries
generate roughly the same amounts of revenue, produce similar costs of
capital, and produce comparable distributions of income.