Abstract:

In any market economy, the effect of taxation on the business environment is undeniable. However, it is difficult to quantify the overall impact of fiscal changes on companies. This study will attempt to reveal the way in which taxation has impacted the manufacturing sector. The manufacturing confidence indicator will act as a proxy for business confidence in the production sector and the tax burden will be used as a descriptor for the taxation system in each country. The conclusions are based on data collected for the period between 1975 and 2012, from Japan and the USA, both countries with solid manufacturing sectors in their industries.