Tax Issues Business Resource Materials

Entrepreneurship Law Editorial Team


Robin Barlow & Jack S. Connell Jr., The Single Business Tax, in Michigan’s Fiscal and Economic Structure (Harvey E. Brazer & Deborah S. Laren eds., 1982).

Abstract (from publisher): Michigan's Fiscal and Economic Structure is the earliest of the national tax studies. The University of Michigan initiated the comprehensive study, which included comparative analyses and reviews of both revenues and expenditures with special attention given to school finance and intergovernmental fiscal relations.


Product Description (from Amazon): Federal, state and local taxes represent a major cost of doing business in the United States, and this is particularly true for small businesses. The array of federal taxes that small businesses face includes income taxes (individual and corporate), social security and Medicare employment taxes, excise taxes, and unemployment compensation taxes. This book explores the federal tax burden on small firms and its effects on their performance and rates of formation and growth.  


Max Chafkin, Ja, Socialism, 33 Inc., Feb. 2011 at 39.

Abstract:  The article offers a look at how entrepreneurs become successful in Norway despite having to pay high taxes. Since Norway is a socialist country, business is transparent, militantly egalitarian, and heavily taxed. Wiggo Dalmo is one entrepreneur who gained success in the country despite paying nearly 50 percent of his income to the federal government. According to Dalmo, the tax system in Norway is fair and they treat paying taxes as buying a product. Since he likes the government's service, he believes that he is paying a fair price.

Valerio Filoso, The Corporate Income Tax: An Entrepreneurial Perspective, 13(1) Q. J. Austrian Econ. 99 (2010).

Abstract (from author): While corporate income taxation is a major issue in the debate over international finance, economic theory has no clear stance on who bears its burden. On balance, economists seem still more prone to accept that taxing profits does not affect corporations' outcomes. This paper makes three cases for non-neutrality. First, since corporate income taxation is asymmetric between profit and loss, the tax rate may change the ranking of alternative investments. Secondly, the imperfect observability of the use of internal resources makes pure economic profits very difficult to detect. Thirdly, when the pervasive role of entrepreneurship is fully taken into account, corporate income taxation appears clearly as a direct tax on market adjustments and successful speculation.

Judith Freeman & Claire Crawford, Small Business Taxation (Oxford Legal Studies Research Paper No. 25/2011), available at

Abstract: This paper, commissioned by the Institute for Fiscal Studies for the Mirrlees Review on Reforming the [UK] Tax System for the 21st Century, discusses the taxation of small, owner-managed businesses. It focuses on the difficulties created by taxing different legal forms of business-employees, the self-employed, unincorporated traders, partnerships and incorporated firms- in different ways. The chapter argues that the aim should be to align effective tax rates (including national insurance (social security) contributions) for these groups after taking into account capital investment and suggests ways of achieving this. In addition the authors reject the case for blanket tax incentives for small businesses, although they accept the case for specific reliefs, if they can be targeted effectively, where there is a market failure or to assist with compliance costs.

Douglas Holtz-Eakin et al., Entrepreneurial Decisions and Liquidity Constraints, 25 RAND J. Econ. 334 (1994).

Abstract (from authors): Examines sole proprietorships and the extent to which the decision to become an entrepreneur is influenced by inheritance size - i.e., access to capital. A group of approximately 3,000 people were identified through US Internal Revenue Service data, including estate tax returns to identify those who had received inheritances in 1982 or 1983, and personal income tax returns for 1981 and 1985, to further focus on which of the initial group did not have Schedule C business income in 1981. During the 1981-1985 period, 20% of the wage earners became sole proprietors, as defined by filing of a Schedule C business income tax form in 1985, but not in 1981. Analysis by inheritance size and individual characteristics finds that the size of the inheritance has a significant impact both on an individual's decision to become an entrepreneur and on the amount of capital used in the new enterprise. As well, the probability of becoming an entrepreneur generally decreases with age and with the number of children an individual has. This research provides a unique dataset to complement earlier research that examines liquidity constraints for corporations.

Stewart S. Karlinsky & William J. Greene, Small Business Income Tax Incentives: The U.S. and Other Industrial Nations, 11 Int'l Tax J. 215 (1985).

Susan C. Morse, Startup Ltd.: Tax Planning and Initial Incorporation Location, 14 Fla. Tax Rev. 319 (2013).

Abstract (adapted from author): This article analyzes the incorporation decisions of relatively new, US-based private business enterprises with global ambitions. Such startup firms generally organize as US corporations. The article identifies explanatory factors including limited tax benefits of non-US incorporation, legal benefits of US incorporation, startups’ liquidity and other resource constraints, and investor preferences.

Online Resources, Small Business Tax Center

Small Business Jobs Act of 2010, at

From the website: On Sept. 27, 2010, President Obama signed into law the Small Business Jobs Act, the most significant piece of small business legislation in over a decade. The new law is providing critical resources to help small businesses continue to drive economic recovery and create jobs. The new law extended the successful SBA enhanced loan provisions while offering billions more in lending support, tax cuts, and other opportunities for entrepreneurs and small business owners.”

Startup America, at

From the website : “Startup America” is a White House initiative to celebrate, inspire, and accelerate high-growth entrepreneurship throughout the nation. This coordinated public/private effort brings together an alliance of the country’s most innovative entrepreneurs, corporations, universities, foundations, and other leaders, working in concert with a wide range of federal agencies to dramatically increase the prevalence and success of America’s entrepreneurs.”

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