Tax Policy and Entrepreneurship

Abstract

Summary Citing the potential benefits of a more entrepreneurial labor market, governments and economic actors around the world have instituted programs to help foster entrepreneurship. There is a vast array of potential policy tools available and utilized to varying degrees across countries to help stimulate small business growth. Given the importance of taxation it is not surprising that the interplay between tax policy and entrepreneurial activity has received a great deal of attention in the economics literature. However, because this topic overlaps several areas of economic research, much of the work that has been done is fragmented. This paper pulls together the various strains of research to illustrate the current state of knowledge regarding the impacts of taxation on entrepreneurship and to identify areas in which additional research is particularly warranted.