Tax incentives and the choice of organisational form of small businesses. Identification through a differentiated payroll tax schedule

Andrea Papini

No 2018-07, ISER Working Paper Series from Institute for Social and Economic Research

Abstract: The Norwegian dual income tax system gave incentives for business owners to incorporate and take advantage of the lower tax on capital income. The tax reform of 2006, which was designed to eliminate these incentives, is used to discuss effects of taxation on the choice of organisational form. The interplay between the tax reform and the pre-existing system of geographically differentiated payroll tax rates generates heterogeneity in the tax treatment, which is exploited in a difference-in-differences empirical strategy. Estimation results based on a large administrative dataset suggest that organisational choice is influenced by taxes: a 1 percentage point reduction in the payroll tax results in 1 percent increase in incorporation rate.

Date: 2018-05-31
New Economics Papers: this item is included in nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published

Downloads: (external link)
https://www.iser.essex.ac.uk/wp-content/uploads/fi ... ers/iser/2018-07.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ese:iserwp:2018-07

Ordering information: This working paper can be ordered from
Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
https://www.iser.essex.ac.uk/publications/

Access Statistics for this paper

More papers in ISER Working Paper Series from Institute for Social and Economic Research Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK. Contact information at EDIRC.
Bibliographic data for series maintained by Jonathan Nears ().