TY  - JOUR
AU  - Gordon,Roger H.
AU  - Cullen,Julie Berry
TI  - Taxes and Entrepreneurial Activity: Theory and Evidence for the U.S.
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9015
PY  - 2002
Y2  - June 2002
UR  - http://www.nber.org/papers/w9015
L1  - http://www.nber.org/papers/w9015.pdf
N1  - Author contact info:
Roger H. Gordon
Department of Economics 0508
University of California, San Diego
9500 Gilman Drive, Dept. 0508
La Jolla, CA 92093
Tel: 858/534-4828
Fax: 858/534-7040
E-Mail: rogordon@ucsd.edu

Julie Berry Cullen
Department of Economics - 0508
University of California, San Diego
9500 Gilman Drive
La Jolla, CA 92093-0508
Tel: 858/822-2056
Fax: 858/534-7040
E-Mail: jbcullen@ucsd.edu
AB  - Entrepreneurial activity is presumed to generate important spillovers, potentially justifying tax subsidies.  How does the tax law affect individual incentives?  How much of an impact has it had in practice?  We first show theoretically that taxes can affect the incentives to be an entrepreneur due simply to differences in tax rates on business vs. wage and salary income, due to differences in the tax treatment of losses vs. profits through a progressive rate structure and through the option to incorporate, and due to risk-sharing with the government.  We then provide empirical evidence using U.S. individual tax return data that these aspects of the tax law have had large effects on actual behavior.
ER  -