Abstract

The article focuses on healing the rift between the U.S. and Europe as of 1973. The 'Year of Europe' continues to conceal two possibilities, each of which is fraught with incalculable consequences for the future. The age of U.S. industrial plant and equipment is roughly twice that of some of the major countries with whom they compete. Nearly 70 percent of Japan's machine tools are less than ten years old, less than 35 percent of U.S. And Japan's rate of investment has been twice the U.S. for the period 1968-70. But the rate of investment in a sense is a measure or function of the attitudes people and government have toward business and of the tax system that is devised on the basis of such attitudes. In most of the major competitor countries, such taxes as businesses pay are aimed not at punishing them but stimulating them. In most such countries, tax revenues are secured primarily from taxes on consumption and secondly from personal income taxes. Only a smaller share of revenue is obtained by taxing businesses which, in addition, operate under far more generous provisions for depreciating their capital than do their American counterparts.