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Tax Structure And Entrepreneurship

  • Mina Baliamoune-Lutz

    ()

    (IREF - Chercheur Indépendant)

  • Pierre Garello

    ()

    (IREF - Chercheur Indépendant)

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, focusing on new self-employment (nascent entrepreneurship). Second, we investigate the impact of tax progressivity on entrepreneurship, again focusing 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 the policy implications of our results.

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Date of creation: 01 Dec 2011
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Handle: RePEc:hal:journl:halshs-00706942
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