Working Paper No. 1245

The Rise of Private Foundations as Owners of Swedish Industry: The Role of Tax Incentives 1862–2018

Published: November 6, 2018Pages: 74Keywords: Family firms; Foundations; High-impact entrepreneurship; Owner; TaxationJEL-codes: D31; H32; K34; L26; N23; O43; P12; P14

The Rise of Private Foundations as Owners of Swedish Industry: The Role of Tax Incentives 1862–2018 Dan Johansson, Mikael Stenkula and Niklas Wykman


The tax system has at times favoured firm control through private foundations, which has been argued to inhibit high-impact entrepreneurship and economic growth. However, research has been hampered due to a lack of systematic historical tax data.

The purpose of this study is threefold. First, we describe the evolution of tax rules for private foundations in Sweden between 1862 and 2018. Second, we calculate the marginal effective tax rate on capital income. Third, we examine the incentives to use private foundations as a means for corporate control by comparing the taxation of private foundations and of high-impact entrepreneurs. Tax incentives help explain why economically significant private foundations were founded between World War I and the 1960s.​

Mikael Stenkula

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mikael.stenkula@ifn.se

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Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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