Does Access to Housing Wealth Relax Liquidity Constraints for Entrepreneurs? Evidence from Sweden - Ratio

Does Access to Housing Wealth Relax Liquidity Constraints for Entrepreneurs? Evidence from Sweden - Ratio

Similar content

Digitalization and the Challenges to Finance Public Welfare: The Case of Sweden

Publication year

2025

Published in

Taxation in the Digital Era. Palgrave Macmillan, Cham.

Abstract

The chapter analyzes how digitalization and globalization challenge states’ ability to tax income and thereby finance public welfare. As work, consumption, and value creation increasingly take place without geographical presence, the link between tax bases and national jurisdictions weakens. This applies both to multinational firms and to individuals with greater opportunities for remote work.

With a focus on Sweden, the chapter discusses how a tax system characterized by high taxes on labor, lower taxation of capital, and a decentralized welfare model may be particularly vulnerable. It highlights the need for adjustments to the tax system in order to maintain legitimacy, efficiency, and the financing of the welfare state in a digital economy.

Taxation in the Digital Era: Economic, Legal, and Policy Challenges

Hansson, Å., & Wernberg, J

Publication year

2025

Published in

Palgrave Macmillan

Abstract

This open access edited volume discusses the impact of digitalization on taxation, using the Swedish welfare state model as a lens through which to examine the disruptive effect of new technologies on traditional tax models. Taking a multidisciplinary approach, it integrates perspectives from economics, law, audit, and public policy to shed light on contemporary challenges in taxation.

With Sweden as a central case study, the chapters in this book address broader concerns surrounding the impact of digital transformation on how states calculate and enforce tax, as well as the role of international coordination in reforming tax policy. The book covers many important topics such as financing public welfare, international attempts to combat issues concerning multinationals and consumption taxation, legitimacy and democratic implications, as well as how digitalization impacts firms’ and tax authorities’ tax administration. The effects of AI, automation and remote work are all considered, as well as how greater labor mobility is decreasing the emphasis on a geographical nexus for taxability and creating a need for urgent tax reform. Providing a diverse set of theoretical and policy considerations, this book will be essential reading for scholars, students and policymakers working in the spheres of tax law, the welfare state and public economics.

Working Paper No. 122. Income taxes and the probability to become self-employed

Publication year

2008

Published in

Ratio Working Paper

Abstract

It is widely recognized that entrepreneurial activity plays an important role in promoting new product innovation, discovering new markets, and replacing inefficient incumbents in a process called “creative destruction”, all of which enhance economic growth. Given the importance of entrepreneurship and small business enterprises it is not surprising that policy makers worldwide (and especially in Europe) try to stimulate entrepreneurial activity. One public policy, frequently discussed, is how to design tax policies that stimulate start-ups and entrepreneurship. Existing knowledge about taxes’ effect on entrepreneurial activity and start-ups is relatively limited, however. Existing empirical studies are primarily based on US data and have until recently used aggregated tax measures (e.g., average national tax rates) or hypothetical marginal tax rates and time-series or cross-section data. This study, however, uses a particular rich longitudinal micro-level dataset based on Swedish tax-return information, which makes it possible to track a cohort of individuals over time periods during which tax rate changes took place, and thereby isolate whether real-life individual decisions about self-employment are affected by changes in the tax rates they actually face. In addition, as the tax structure in Sweden is neutral as opposed to the US that encourages risk taking and tax-driven self-employment, studying the effect of income taxes on the probability to become self-employed based on Swedish data provides information about how taxes on self-employment affect self-employment. Contrary to earlier studies based on US data, I find both average and marginal tax rates to negatively impact the probability to become self-employed.