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The effect of capital gains taxation on small business transfers and start-ups

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  • Cho, Myeonghwan

Abstract

This paper studies the effect of capital gains taxation on small business transfers and business start-ups. We consider a model in which agents have different abilities to manage businesses and derive an agent's optimal choices as an owner or non-owner of a small business. Agents' optimal choices depend on their abilities. We also find that capital gains taxation has a negative effect on small business transfers but can encourage small business start-ups.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 36 (2014)
Issue (Month): C ()
Pages: 447-454

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Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:447-454

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Capital gains taxation; Business start-up; Lock-in effect;

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