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- Henrekson, Magnus, et al.
(författare)
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The Rise and Decline of Industrial Foundations as Controlling Owners of Swedish Listed Firms : The Role of Tax Incentives
- 2020
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Ingår i: Scandinavian Economic History Review. - : Taylor & Francis Group. - 0358-5522 .- 1750-2837. ; 68:2, s. 170-191
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Tidskriftsartikel (refereegranskat)abstract
- Beginning in the interwar period, industrial foundations became a vehicle for the corporate control of large listed firms in Sweden, but in the 1990s they were replaced by wealthy individuals who either directly own controlling blocks or who own them through holding companies. We study potential explanations for this change and propose two taxation-related candidates: shifts in the relative effective taxation across owner types and the dismantling of the inheritance taxation that prevented the generational transfer of the ownership of large controlling blocks. Our analysis exploits newly computed marginal effective capital income tax rates across capital owners, accounting for all relevant factors, including rules governing tax exemptions. We show that the 1990–91 tax reform, abolition of the wealth tax for controlling owners in 1997, 2003 tax exemption of dividends and capital gains on listed stock for holding companies with a voting or equity share of at least 10 percent, and abolition of the inheritance and gift taxes in 2004 reversed the rules of the game. Recently, control has largely been wielded through direct ownership, and the role of foundations is rapidly declining. These findings point to the importance of tax incentives for the use of foundations as the control vehicles of listed firms.
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| 2. |
- Johansson, Dan, 1964-, et al.
(författare)
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The Taxation of Industrial Foundations in Sweden (1862–2018)
- 2020
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Ingår i: Nordic Tax Journal. - : De Gruyter Open. - 2246-1809. ; :1, s. 1-14
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Tidskriftsartikel (refereegranskat)abstract
- It has been argued that the Swedish tax system has favored firm control through industrial foundations, which should have inhibited entrepreneurship and economic growth. However, research has been hampered due to a lack of systematic historical tax data. The purpose of this study is to describe the evolution of tax rules for industrial foundations in Sweden between 1862 and 2018 and to calculate the marginal effective tax rate on capital income (METR). The results show that the METR for an equity financed investment is below 20 percent most of the time and occasionally peak at about 40 percent. Treating the requirement that industrial foundations have to donate the bulk of capital income (less capital gains) to charitable purposes as a tax, the METR seldom is below 50 percent when financing investments with new share issues, and often exceeds 100 percent.
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