AN EMPIRICAL MODEL OF TAX CONVEXITY AND SELF-EMPLOYMENT

• 成果类型: Article
• 署名作者: Wen, Jean-Francois; Gordon, Daniel V.
• 署名单位: University of Calgary; Universitetet i Stavanger
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00388
• 发表日期: 2014-07
• 页码: 471-482
• 关键词: entrepreneurial risk-taking; UNITED-STATES; income-tax; GROWTH; redistribution; progression; taxation; aversion; canada; POLICY

摘要

Do progressive marginal income tax rates discourage self-employment? We assume risk neutrality to construct an implicit surtax on stochastic income relative to steady income, arising from a convex tax schedule. It is computed as part of a structural probit model with earnings equations and a tax simulator. The tax convexity variable and the net-of-tax income difference between self-and paid employment have the predicted signs and high levels of statistical significance for the probability of self-employment. A simulated flat tax reform suggests the tax effects are small.