Abstract
Do taxes drive entrepreneurs out of business? This pa- per uses panel data on self-employed workers to examine whether differential income and payroll taxes affect their decisions to con- tinue operating or to close their doors and take wage-and-salary jobs. I exploit statutory variations in the tax treatment of wage and self-employment income using data from the Panel Study of In- come Dynamics. Taking into account the endogeneity of individual- level tax rates, I find that higher relative marginal tax rates on self-employment income do not necessarily increase the probabil- ity of exit.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
