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Small Business, Innovation, and Tax Policy: A Review

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  • Gale, William
  • Brown, Samuel

Abstract

Small businesses occupy an iconic place in American public policy debates. This paper discusses interactions between the federal tax code, small business, and the economy. We summarize the characteristics of small businesses, identify the tax provisions that most affect small businesses, and review evidence on the impact of tax and other policies on entrepreneurial activity. We also examine evidence suggesting that it is young firms, not small ones, where job growth and innovation tend to occur. Policies that aim to stimulate young and innovative firms are likely to prove different than policies that subsidize small businesses.

Suggested Citation

  • Gale, William & Brown, Samuel, 2013. "Small Business, Innovation, and Tax Policy: A Review," MPRA Paper 57384, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57384
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    References listed on IDEAS

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    Cited by:

    1. William Gale & Samuel Brown, 2013. "Small Business, Innovation, and Tax Policy: A Review," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(4), pages 871-892, December.
    2. Bergner, Sören Martin & Bräutigam, Rainer & Evers, Maria Theresia & Spengel, Christoph, 2017. "The use of SME tax incentives in the European Union," ZEW Discussion Papers 17-006, ZEW - Leibniz Centre for European Economic Research.
    3. Catherine Fazio & Jorge Guzman & Scott Stern, 2020. "The Impact of State-Level Research and Development Tax Credits on the Quantity and Quality of Entrepreneurship," Economic Development Quarterly, , vol. 34(2), pages 188-208, May.
    4. Wang Dongling & Kelvin C.K. Lam, 2018. "Whether the Innovation Policy Will Really Improve Enterprise’s Innovation Performance— Mediating Role of Ambidextrous Learning," International Business Research, Canadian Center of Science and Education, vol. 11(9), pages 96-107, September.
    5. Christian Imboden & John Voorheis & Caroline Weber, 2023. "Self-Employment Income Reporting on Surveys," Working Papers 23-19, Center for Economic Studies, U.S. Census Bureau.
    6. Can, Ege & Fossen, Frank M., 2023. "Income Taxation and Hours Worked in Different Types of Entrepreneurship," IZA Discussion Papers 16683, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    entrepreneurship; tax policy; innovation; small business;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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