Taxes and the Choice of Organizational Form by Entrepreneurs in Sweden
49 Pages Posted: 27 May 2012 Last revised: 16 Aug 2014
Date Written: September 1, 2013
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: Suggested Citation