Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 15, 2016 erstellt
Beschreibung:
Drawing on administrative panel data covering the full population of business owners in the UK, I study the effects of differential tax liabilities across organizational forms on business entry and on income shifting. I find that a 10% increase in savings from incorporation leads to a 1.7% increase in the number of new business owners. However, higher entrepreneurial entry is offset by income shifting – increasing the hazard rate of incorporation of the existing self-employed by up to 2.3% for a 10% increase in tax savings. I show that despite large tax savings from incorporation (exceeding 10 pp in some years), a substantial proportion of business owners fail to incorporate, suggesting that income shifting through incorporation is not the primary avoidance channel for the self-employed