Taxation, innovation and entrepreneurship Hans Gersbach, Ulrich Schetter and Maik T. Schneider
By: Gersbach, Hans
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Contributor(s): Schetter, Ulrich | Schneider, Maik T.
Material type: 
ArticlePublisher: 2019Subject(s): INNOVACIÓN | EMPRENDEDORES | CREACION DE EMPRESAS | IMPUESTOS | MODELOS ECONOMETRICOS
In:
The Economic Journal v. 129, n. 620, May 2019, p.1731-1781Summary: We explore optimal and politically feasible growth policies consisting of basic research investments and taxation. We show that the impact of basic research on the general economy rationalises a taxation pecking order with high labour taxes and low profit taxes. This scheme induces a significant proportion of agents to become entrepreneurs, thereby rationalising substantial investments in basic research fostering their innovation prospects. These entrepreneurial economies, however, may make a majority of workers worse off, giving rise to a conflict between efficiency and equality. We discuss ways of mitigating this conflict, and thus strengthening political support for growth policies.
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| Artículos | IEF | IEF | OP 282/2019/620-2 (Browse shelf) | Available | OP 282/2019/620-2 |
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| OP 282/2019/619 The Economic Journal | OP 282/2019/620 The Economic Journal | OP 282/2019/620-1 Can fixed-term contracts put low skilled youth on a better career path? | OP 282/2019/620-2 Taxation, innovation and entrepreneurship | OP 282/2019/620-3 Nonprofit tax exemptions, for-profit competition and spillovers to community services | OP 282/2019/620-4 Distributional implications of joint tax evasion | OP 282/2019/621 The Economic Journal |
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We explore optimal and politically feasible growth policies consisting of basic research investments and taxation. We show that the impact of basic research on the general economy rationalises a taxation pecking order with high labour taxes and low profit taxes. This scheme induces a significant proportion of agents to become entrepreneurs, thereby rationalising substantial investments in basic research fostering their innovation prospects. These entrepreneurial economies, however, may make a majority of workers worse off, giving rise to a conflict between efficiency and equality. We discuss ways of mitigating this conflict, and thus strengthening political support for growth policies.
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