Taxation and the quality of entrepreneurship

@article{Asoni2014TaxationAT,
  title={Taxation and the quality of entrepreneurship},
  author={Andrea Asoni and Tino Sanandaji},
  journal={Journal of Economics},
  year={2014},
  volume={113},
  pages={101-123}
}
We study the effect of taxation on entrepreneurship, investigating how taxes affect both the number of start-ups and their average quality. We show theoretically that even with risk neutral agents and no tax evasion progressive taxes can increase entrepreneurial entry, while reducing average firm quality. So called “success taxes” encourage start-ups with lower value business ideas by reducing the option value of pursuing better projects. This suggests that the most common measure used in the… 
View on Springer
ifn.se
17 Citations
Background Citations
1

17 Citations

Citation Type

Citation Type

The effects of income taxation on entrepreneurial investment: A puzzle?
We investigate how personal income taxes affect the portfolio share of personal wealth that entrepreneurs invest in their own business. In a portfolio choice model that allows for tax sheltering, we…
Effectiveness of tax reform on entrepreneurship
Purpose - The purpose of this paper is to investigate the effects of tax reform on entrepreneurship in South Africa using repeated cross-sectional data from the World Bank.…
How should taxes be designed to encourage entrepreneurship?
This paper examines how tax policy should be designed to best encourage entrepreneurial activity in start-up firms. We begin by describing several presumed market failures affecting entrepreneurial…
Entrepreneurship, Tax Evasion and Corruption in Europe
Owner-Level Taxes and Business Activity
In some classes of models, taxes at the owner level are “neutral” and have no effect on firm activity. However, this tax neutrality is sensitive to assumptions and no longer holds in more complex…
Owner-Level Taxes and Business Activity Magnus Henrekson and Tino Sanandaji Owner-Level Taxes and Business Activity
In some classes of models, taxes at the owner level are “neutral” and have no effect on firm activity. However, this tax neutrality is sensitive to assumptions and no longer holds in more complex…
Tax Evasion, Tax Morale, and the Case for Growth
This chapter examines tax evasion as a widespread phenomenon. We investigate tax evasion in relation to both the shadow economy related to tax corruption and entrepreneurship. Further, we study the…
Income Taxation, Entrepreneurship, and Incorporation Status of Self-Employment
This paper splits self-employment, which has mostly been used as a proxy for entrepreneurship, into two different entrepreneur types with incorporated and unincorporated businesses. This split sheds…
A cointegration analysis of tax evasion, corruption and entrepreneurship in OECD countries
This paper explores the long-run relationship among tax evasion, corruption and different stages of entrepreneurial activities for 31 OECD countries based on a series of annual data during the peri...
Entrepreneurship, Institutions and Economic Dynamism: Lessons from a Comparison of the United States and Sweden
The purpose of this research endeavor—in the form of eight articles—published in this Special Issue of Industrial and Corporate Change is to further our understanding of the extent, character and…
...
...

References

SHOWING 1-10 OF 44 REFERENCES
Taxes and entrepreneurial risk-taking: Theory and evidence for the U.S. ☆
Income Taxes and Entrepreneurs' Use of Labor
We investigate the effect of entrepreneurs' personal taxes on their use of labor, analyze the tax returns of sole proprietors before and after the Tax Reform Act of 1986, and determine how the…
Taxation and entrepreneurship in a welfare state
Does tax policy affect the rate of self-employment in a modern welfare state? This question is analyzed empirically based on Swedish data for the entire postwar period. Available tax data indicate…
Entrepreneurs, Income Taxes, and Investment
This paper investigates the effect of entrepreneurs' personal income tax situations on their capital investment decisions. We examine the income tax returns of a sample of sole proprietors before and…
Tax Policy and Entrepreneurship
Summary Citing the potential benefits of a more entrepreneurial labor market, governments and economic actors around the world have instituted programs to help foster entrepreneurship. There is a…
Personal Income Taxes and the Growth of Small Firms
This paper investigates the effect of entrepreneurs' personal income tax situations on the growth rates of their enterprises. We analyze the personal income tax returns of a large number of sole…
Entrepreneurship and the theory of taxation
A review of the literature on firm taxation reveals that the economics of entrepreneurship has not sufficiently been taken into consideration. We discuss how this affects conclusions derived from…
Tax Neutrality: Illusion or Reality? The Case of Entrepreneurship
This paper shows that taxes which are understood to be neutral with respect to the marginal investment decisions may be distortionary with respect to entrepreneurial decisions. In particular, we…
Entrepreneurship and Institutions
In this paper entrepreneurs are defined as agents who bring about economic change by combining their own effort with other factors of production in search of economic rents. The institutional setup…
Tax Policy and Firm Entry and Exit Dynamics: Evidence from OECD Countries
In this paper we study the effects of reforms to corporate and personal income taxation on the rate of firm entry and exit using industry data for 19 OECD countries from 1998 to 2005. Using a…
...
...