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Self-employment: Influence of Tax Incentives and Income Underreporting
[journal article]
Abstract
The aim of the article is to answer the question whether the tax benefits that can be obtained by the self-employed in Poland influence the decision to start their own business. In the study, the EUROMOD microsimulation model is used to determine tax benefits from self-employment. The estimated tax ... view more
The aim of the article is to answer the question whether the tax benefits that can be obtained by the self-employed in Poland influence the decision to start their own business. In the study, the EUROMOD microsimulation model is used to determine tax benefits from self-employment. The estimated tax benefits are then used in a probit regression to explain the probability of self-employment. The survey is carried out for both original EU-SILC data and adjusted data, assuming that the income reported by the self-employed is underreported. The results of the survey based on the original data indicate that taxpayers make irrational decisions about taking up self-employment. This is because as the benefits of self-employment increase, the probability of self-employment decreases. After ad-justing the data on self-employed income with the underreported income, the results of the analysis lead to the opposite conclusion.... view less
Keywords
autonomy; taxation; Poland; setting up a business; income
Classification
Labor Market Research
Free Keywords
underreporting; EU-SILC 2013-2016
Document language
English
Publication Year
2021
Page/Pages
p. 171-188
Journal
Prague Economic Papers, 30 (2021) 2
DOI
https://doi.org/10.18267/j.pep.766
ISSN
2336-730X
Status
Published Version; peer reviewed
Licence
Creative Commons - Attribution-Noncommercial-No Derivative Works 4.0