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Tax structure and entrepreneurship

  • Mina Baliamoune-Lutz
  • Pierre Garello

    ()

Using macro-level panel data, we examine the effects of taxation and tax progressivity on entrepreneurship in a large group of European countries. We address two main questions. First, we try to explore whether tax increases discourage entrepreneurial activity, focusing on new self-employment (nascent entrepreneurship). Second, we investigate the impact of tax progressivity on entrepreneurship, again focusing on new self-employment. We find that tax progressivity at higher-than-average incomes has a robust negative effect on nascent entrepreneurship. We discuss the policy implications of our results. Copyright Springer Science+Business Media New York 2014

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File URL: http://hdl.handle.net/10.1007/s11187-013-9469-9
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Article provided by Springer in its journal Small Business Economics.

Volume (Year): 42 (2014)
Issue (Month): 1 (January)
Pages: 165-190

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Handle: RePEc:kap:sbusec:v:42:y:2014:i:1:p:165-190
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