The Rise of Private Foundations as Owners of Swedish Industry: The Role of Tax Incentives 1862–2018

75 Pages Posted: 10 Jul 2019 Last revised: 12 Sep 2019

See all articles by Dan Johansson

Dan Johansson

Örebro University School of Business

Mikael Stenkula

Research Institute of Industrial Economics (IFN)

Niklas Wykman

Örebro University

Date Written: November 6, 2018

Abstract

The tax system has at times favoured firm control through private foundations, which has been argued to inhibit high-impact entrepreneurship and economic growth. However, research has been hampered due to a lack of systematic historical tax data. The purpose of this study is threefold. First, we describe the evolution of tax rules for private foundations in Sweden between 1862 and 2018. Second, we calculate the marginal effective tax rate on capital income. Third, we examine the incentives to use private foundations as a means for corporate control by comparing the taxation of private foundations and of high-impact entrepreneurs. Tax incentives help explain why economically significant private foundations were founded between World War I and the 1960s.

Keywords: family firms; foundations; high-impact entrepreneurship; owner; taxation

JEL Classification: D31; H32; K34; L26; N23; O43; P12; P14

Suggested Citation

Johansson, Dan and Stenkula, Mikael and Wykman, Niklas, The Rise of Private Foundations as Owners of Swedish Industry: The Role of Tax Incentives 1862–2018 (November 6, 2018). IFN Working Paper No. 1245. Available at SSRN: https://ssrn.com/abstract=3279580 or http://dx.doi.org/10.2139/ssrn.3279580

Dan Johansson

Örebro University School of Business ( email )

School of Business
Örebro, SE-70182
Sweden

Mikael Stenkula (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

P.O. Box 55665
Stockholm, 102 15
Sweden

Niklas Wykman

Örebro University ( email )

Fakultetsgatan 1
SE-701 82
Örebro, 70210
Sweden

Register to save articles to
your library

Register

Paper statistics

Downloads
3
Abstract Views
52
PlumX Metrics