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Nordic dual income taxation of entrepreneurs

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Author Info
Vesa Kanniainen ()
Seppo Kari ()
Jouko Ylä-Liedenpohja ()

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Abstract

The paper shows how entrepreneurial taxes interact with the career choice of individuals, the quality of entrepreneurs, and their investment behavior. It is particularly relevant to differentiate the early effects on start-up enterprises with substantial uncertainty from the tax effects on mature firms where the uncertainty is resolved. Conditions are derived for the Nordic dual income tax to be neutral and they are found to be stringent. Profit expectations matter. The Nordic dual encourages (discourages) the establishment of new enterprises by entrepreneurs who anticipate high (low) profitability. Copyright Springer Science+Business Media, LLC 2007

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File URL: http://hdl.handle.net/10.1007/s10797-007-9023-2
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Publisher Info
Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 14 (2007)
Issue (Month): 4 (August)
Pages: 407-426
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:itaxpf:v:14:y:2007:i:4:p:407-426

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Web page: http://www.springerlink.com/link.asp?id=102915

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Related research
Keywords: Dual income taxation; Enterprise taxes; H25;

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References listed on IDEAS
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  3. Erik Fjaerli & Diderik Lund, 2001. "The choice between owner's wages and dividends under the dual income tax," Finnish Economic Papers, Finnish Economic Association, vol. 14(2), pages 104-119, Autumn. [Downloadable!]
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  15. Vesa Kanniainen & Seppo Kari & Jouko Ylä-Liedenpohja, 2005. "The Start-Up and Growth Stages in Enterprise Formation: The New View of Dividend Taxation Reconsidered," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  21. Peter Birch Sorensen, 2003. "Neutral Taxation of Shareholder Income: A Norwegian Tax Reform Proposal," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  28. Matti Virén, 2006. "Fiscal Policy in the 1920s and 1930s. How much different it is from the post war period's policies," Discussion Papers 402, Government Institute for Economic Research Finland (VATT). [Downloadable!]
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ville Mälkönen, 2008. "Optimal Public Procurement Contracts Under a Soft Budget Constraint," Discussion Papers 464, Government Institute for Economic Research Finland (VATT). [Downloadable!]
  2. Marja Riihelä & Risto Sullström & Ilpo Suoniemi, 2008. "Tax Progressivity and Recent Evolution of the Finnish Income Inequality," Discussion Papers 460, Government Institute for Economic Research Finland (VATT). [Downloadable!]
  3. Seppo Kari & Hanna Karikallio, 2007. "Tax Treatment of Dividends and Capital Gains and the Dividend Decision Under Dual Income Tax," Discussion Papers 416, Government Institute for Economic Research Finland (VATT). [Downloadable!]
    Other versions:
  4. Henrekson, Magnus & Sanandaji, Tino, 2008. "Entrepreneurship and the Theory of Taxation," Working Paper Series 732, Research Institute of Industrial Economics, revised 19 Aug 2009. [Downloadable!]
  5. Thor O. Thoresen and Annette Alstadsæter, 2008. "Shifts in organizational form under a dual income tax system," Discussion Papers 529, Research Department of Statistics Norway. [Downloadable!]
    Other versions:
  6. Elina Berghäll, 2008. "Revealing Agglomeration Economies with Stochastic Frontier Modelling in the Finnish ICT Industry," Discussion Papers 435, Government Institute for Economic Research Finland (VATT). [Downloadable!]
  7. Ossi Korkeamäki & Tomi Kyyrä, 2008. "A Distributional Analysis of Displacement Costs in an Economic Depression and Recovery," Discussion Papers 465, Government Institute for Economic Research Finland (VATT). [Downloadable!]
  8. Seppo Kari & Hietala & Harri, 2006. "Investment Incentives in Closely Held Corporations and Finland's 2005 Tax Reform," Discussion Papers 392, Government Institute for Economic Research Finland (VATT). [Downloadable!]
    Other versions:
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