TY  - JOUR
AU  - Keuschnigg,Christian
AU  - Nielsen,Soren Bo
TI  - Tax Policy, Venture Capital, and Entrepreneurship
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7976
PY  - 2000
Y2  - October 2000
UR  - http://www.nber.org/papers/w7976
L1  - http://www.nber.org/papers/w7976.pdf
N1  - Author contact info:
Christian Keuschnigg
University of St.Gallen, FGN-HSG
Varnbuelstrasse 19
CH-9000 St. Gallen
Switzerland
Tel: +41-71-224-3085
Fax: +41-71-224-2874
E-Mail: Christian.Keuschnigg@unisg.ch

Soren Bo Nielsen
Copenhagen Business School
E-Mail: sbn.eco@cbs.dk
AB  - The paper studies the effects of tax policy on venture capital activity.  Entrepreneurs pursue a single high risk project each but have no own resources. Financiers provide equity finance. They must structure the entrepreneur's profit share and base salary to assure their incentives for full effort. In addition to providing equity finance, venture capitalists assist with valuable business advice to enhance survival rates. Within a general equilibrium framework with a traditional and an entrepreneurial sector, the paper investigates the effects of taxes on the equilibrium level of entrepreneurship and managerial advice. It considers dierential wage and capital income taxes, a comprehensive income tax, incomplete loss offset, progressive taxation as well as investment and output subsidies to the entrepreneurial sector.
ER  -