Taxes and Entrepreneurial Endurance: Evidence from the Self-Employed
Year: 2002
Type: article
Study design: Observational Study
Abstract: Do taxes drive entrepreneurs out of business? This paper uses panel data on self-employed workers to examine whether differential income and payroll taxes affect their decisions to continue operating or to close their doors and take wage-and-salary jobs. I exploit statutory variations in the tax treatment of wage and self-employment income using data from the Panel Study of Income Dynamics. Taking into account the endogeneity of individuallevel tax rates, I find that higher relative marginal tax rates on self-employment income do not necessarily increase the probability of exit.
Source: National Tax Journal
Author: Donald Bruce
Language: English
Topic: Economic and Fiscal Studies
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1508792136