In this paper we use French income tax returns since 1994 to study the effects of fiscal incentives for self-employment and entrepreneurship. France is a good quasi-laboratory because of its unique variety of fiscal \u201cregimes\u201d for self-employment, which differ according to their financial incentives, their degrees of administrative simplicity, and the scope for misreporting income that they offer. Eligibility for the two simplified fiscal regimes, which have a low administrative burden, requires business revenues to remain below a given threshold. We show that a reform that expanded eligibility for a simplified regime led to an immediate switch of agents from other regimes, but no overall growth in self-employment. On the other hand, a reform which created a regime with more administrative simplicity led progressively to new entry by smaller than average businesses. The eligibility thresholds create a special type of \u201cnotches\u201d around which we observe significant bunching. The thresholds have moved a lot over time, and the bunching mass has moved with them, although progressively so, and faster when the threshold change was larger. We use the measured empirical bunching to estimate the value of administrative simplicity, a real income elasticity, and a misreporting elasticity. To do so, we exploit the many variations in policy parameters over time and their heterogeneous impacts on agents in different tax brackets and activity types. We find that there is a significant misreporting elasticity and a value for simplicity, without which the observed bunching is hard to rationalize.<\/p>","protected":false},"excerpt":{"rendered":"
In this paper we use French income tax returns since 1994 to study the effects of fiscal incentives for self-employment and entrepreneurship. France is a good quasi-laboratory because of its unique variety of fiscal \u201cregimes\u201d for self-employment, which differ according to their financial incentives, their degrees of administrative simplicity, and the scope for misreporting income […]<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":true},"thematique":[131],"type-de-publication":[],"class_list":["post-563","publication","type-publication","status-publish","hentry","thematique-taxation"],"acf":[],"yoast_head":"\n