Tax Structure and Entrepreneurship

IREF Working paper N° 1/2011

43 Pages Posted: 29 May 2012

See all articles by Mina Baliamoune-Lutz

Mina Baliamoune-Lutz

University of North Florida ; Economic Research Forum; Policy Center for the New South

Pierre Garello

Aix-Marseille University

Date Written: December 1, 2011

Abstract

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.

Keywords: tax progressivity, nascent entrepreneurship, european firms

JEL Classification: H22, L26, O43

Suggested Citation

Baliamoune-Lutz, Mina and Garello, Pierre, Tax Structure and Entrepreneurship (December 1, 2011). IREF Working paper N° 1/2011, Available at SSRN: https://ssrn.com/abstract=2068495 or http://dx.doi.org/10.2139/ssrn.2068495

Mina Baliamoune-Lutz (Contact Author)

University of North Florida ( email )

1 UNF Drive
Jacksonville, FL 32224-2645
United States

HOME PAGE: http://www.unf.edu/

Economic Research Forum ( email )

21 Al-Sad Al-Aaly Street
Dokki, Giza
Cairo
Egypt

HOME PAGE: http://erf.org.eg/

Policy Center for the New South ( email )

Campus of Mohammed VI Polytechnic University
Rabat, Rabat-Sale
Morocco

HOME PAGE: http://https://www.policycenter.ma/

Pierre Garello

Aix-Marseille University ( email )

15-19 Allée Claude Forbin
Aix-en-Provence, cedex 1, 13267
France

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