Abstract

We develop a theory of sweat equity—the value of business owners’ time and expenses to build customer bases, client lists, and other intangible assets. We discipline the theory using data from U.S. national accounts, business censuses, and brokered sales to estimate a value for sweat equity in the private business sector equal to 1.2 times U.S. GDP, which is about the same magnitude as the value of fixed assets in use in these businesses. For a typical owner, 26% of the sweat equity is transferable through inheritance or sale. The equity values are positively correlated with business incomes and standard measures of markups based on accounting data, but not with owners’ financial assets or standard measures of business total factor productivity. We use our theory to show that abstracting from sweat activity leads to a significant understatement of the effects of lowering business income tax rates on private business activity for both the extensive and intensive margins. Despite finding larger responses, our model’s implied tax elasticities of establishments and owner hours are in line with empirical estimates in the public finance literature. Allowing for financial constraints and superstar firms does not overturn our main findings.

中文翻译：

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美国私人企业的汗水股本*

摘要

我们建立了汗水公平的理论，即企业所有者建立客户群，客户名单和其他无形资产的时间和费用的价值。我们使用来自美国国民账户，商业普查和经纪人销售的数据对理论进行规范，以估计私营企业的汗水股权价值等于美国GDP的1.2倍，与使用中的固定资产价值大致相同在这些业务中。对于典型的所有者，汗水资产的26％可通过继承或出售来转让。权益值与业务收入和基于会计数据的加价标准度量值呈正相关，而与所有者的金融资产或业务全要素生产率的标准度量值无正相关。我们用我们的理论表明，从汗水活动中抽象导致对广泛和密集利润率的企业所得税税率降低对私人企业活动的影响的严重低估。尽管找到了更大的回应，但我们模型对机构和所有者工时的隐含税收弹性与公共财政文献中的经验估计相符。考虑到财务限制和超级巨星公司，并不能推翻我们的主要发现。