Click here for the whole post (and a link to the report).Reducing marginal income tax rates on entrepreneurs increases entrepreneurial entry, decreases exit from entrepreneurship, and lengthens the duration of entrepreneurial ventures.
On of the central themes in finance is that taxes matter. A lower marginal tax rate means that after tax payoffs increase. Not surprisingly, this shifts investor/entrepeneur behavior at the margin. Given the increasing importance of entrepreneurial activity as an engine of economic growth, this is pretty important as a policy issue.
Don't you love it when real world data supports what theory says?