This paper investigates the effect of entrepreneurs' personal income tax situations on their use of labor. We analyze the income tax returns of a large number of sole proprietors before and after the Tax Reform Act of 1986 and determine how the substantial reductions in marginal tax rates...

Very little is known about the relationship betweentax rates and business growth. The central question is whether firms with largedecreases in tax rates grow faster than those without those decreases. A studyof 31,034 tax returns from the Statistics of Income Individual Tax Files for1985 and...

This paper investigates the effect of entrepreneurs' personal income tax situations on their use of labor. We analyze the income tax returns of a large number of sole proprietors before and after the Tax Reform Act of 1986 and determine how the substantial reductions in marginal tax rates...