Small businesses are widely perceived to be the engines of growth and employment. That’s one reason why most self-employment income, dividends and capital gains are taxed at lower rates than wage income. The trouble is that most such businesses are no more and no less than the way in which people decide to earn their living and have little to do with entrepreneurship. Meanwhile, as new IFS research shows, the associated tax breaks can be expensive, distortionary and inequitable.
This article was published in Prospect Magazine and you can access the full version on their website.
Authors
Research Fellow London School of Economics
Kate is an IFS Research Fellow and an Assistant Professor at LSE, interested in public finance, industrial organisation and applied microeconomics.
Comment details
- Publisher
- Prospect Magazine
Suggested citation
Smith, K. (2019). Expensive, distortionary and inequitable: time to sort out the way we tax business owners [Comment] Prospect Magazine. Available at: https://ifs.org.uk/articles/expensive-distortionary-and-inequitable-time-sort-out-way-we-tax-business-owners (accessed: 28 March 2024).
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