Taxes and the Choice of Organizational Form by Entrepreneurs in Sweden

49 Pages Posted: 27 May 2012 Last revised: 16 Aug 2014

See all articles by Karin Edmark

Karin Edmark

Research Institute of Industrial Economics

Roger H. Gordon

University of California, San Diego (UCSD) - Department of Economics; Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: September 1, 2013

Abstract

This paper makes use of individual data for 2004 to 2008 on owners of closely-held businesses in Sweden to estimate the role of both tax and non-tax determinants in the choice to be a closely-held corporation vs. a proprietorship. While lower-income individuals face relatively neutral incentives, higher income households face strong tax incentives to be corporate. The data suggest a strong response to these tax incentives. Many conventional non-tax determinants are confirmed in the data as well.

Keywords: self-employment, entrepreneurship, taxation of closely-held businesses, business organizational form

JEL Classification: G32, H25, G38

Suggested Citation

Edmark, Karin and Gordon, Roger H., Taxes and the Choice of Organizational Form by Entrepreneurs in Sweden (September 1, 2013). IFN Working Paper No. 982. Available at SSRN: https://ssrn.com/abstract=2066467 or http://dx.doi.org/10.2139/ssrn.2066467

Karin Edmark (Contact Author)

Research Institute of Industrial Economics ( email )

Box 55665
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se\karine

Roger H. Gordon

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States
858-534-4828 (Phone)
858-534-7040 (Fax)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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