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Tax Structure and Entrepreneurship

  • Mina Baliamoune-Lutz

    ()

    (Department of Economics, University of North Florida)

  • Pierre Garello

    ()

    (CERGAM-CAE, Aix-Marseille Université)

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 objectives. First, we try to explore whether tax increases discourage entrepreneurial activity, distinguishing between the effects on existing self-employment and new self-employment (nascent entrepreneurship). Second, we investigate the impact of tax progressivity on entrepreneurship, focusing in particular on the impact on new self-employment. We find that tax progressivity at higher-than-average incomes has a robust negative effect on nascent entrepreneurship. We discuss on the policy implications of our results.

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File URL: http://junon.u-3mrs.fr/afa10w21/RePEc/cgm/wpaper/DR_94_1112.Garello.pdf
File Function: First version, 2011
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Paper provided by Aix-Marseille Université, CERGAM in its series CAE Working Papers with number 94.

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Length: 42 pages
Date of creation: Jul 2011
Date of revision:
Publication status: Published in Small Business Economics, February 2013, pages 1-26
Handle: RePEc:cgm:wpaper:94
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