Taxation, Innovation, and Entrepreneurship

Hans Gersbach; Ulrich Schetter; Maik Schneider

doi:10.1111/ecoj.12588

Taxation, Innovation, and Entrepreneurship

Hans Gersbach, Ulrich Schetter, Maik Schneider

Research output: Contribution to journal › Article › peer-review

15 Citations (SciVal)

252 Downloads (Pure)

Abstract

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.

Original language	English
Pages (from-to)	1731-1781
Number of pages	51
Journal	The Economic journal
Volume	129
Issue number	620
Early online date	11 Jul 2018
DOIs	https://doi.org/10.1111/ecoj.12588
Publication status	Published - 1 May 2019

Access to Document

10.1111/ecoj.12588

Gersbach_Schetter_Schneider_Taxation_Innovation_Entrepreneurship_Revision2_Nov2017_MS20151204
This is a pre-copyedited, author-produced version of an article accepted for publication in The Economic Journal following peer review. The version of record Hans Gersbach, Ulrich Schetter, Maik T Schneider, Taxation, Innovation and Entrepreneurship, The Economic Journal, Volume 129, Issue 620, May 2019, Pages 1731–1781, is available online at: https://doi.org/10.1111/ecoj.12588.
Accepted author manuscript, 849 KB

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2534047

Artificial Intelligence -- Economic Impacts of Technological Uncertainty
Schaefer, A. (PI) & Schneider, M. (PI)
1/01/19 → …
Project: Other

Cite this

@article{15fc5a071b9a4e2eb2259650c748fdd4,

title = "Taxation, Innovation, and Entrepreneurship",

abstract = "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.",

author = "Hans Gersbach and Ulrich Schetter and Maik Schneider",

year = "2019",

month = may,

day = "1",

doi = "10.1111/ecoj.12588",

language = "English",

volume = "129",

pages = "1731--1781",

journal = "The Economic journal",

issn = "0013-0133",

publisher = "Wiley-Blackwell",

number = "620",

}

TY - JOUR

T1 - Taxation, Innovation, and Entrepreneurship

AU - Gersbach, Hans

AU - Schetter, Ulrich

AU - Schneider, Maik

PY - 2019/5/1

Y1 - 2019/5/1

N2 - 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.

AB - 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.

U2 - 10.1111/ecoj.12588

DO - 10.1111/ecoj.12588

M3 - Article

SN - 0013-0133

VL - 129

SP - 1731

EP - 1781

JO - The Economic journal

JF - The Economic journal

IS - 620

ER -

Taxation, Innovation, and Entrepreneurship

Abstract

Access to Document

Fingerprint

Projects

Artificial Intelligence -- Economic Impacts of Technological Uncertainty

Cite this