Owner-Level Taxes and Business Activity

In some classes of models, taxes at the owner level are "neutral" and have no effect on firm activity. However, this tax neutrality is sensitive to assumptions and no longer holds in more complex models. We review recent research that incorporates greater complexity in studying the link between taxes and business activity - particularly entrepreneurship. Dividend taxes on owners of large firms affect firm activity in models that include agency conflicts between owners and managers. Similarly, after incorporating entrepreneurs' occupational choice into the model, taxes are no longer neutral. By forsaking lucrative alternative careers, skilled entrepreneurs tend to have high opportunity costs, which make the choice of attempting to start a business of first order importance. Moreover, in models where it is assumed that capital flows across borders without cost, taxes on domestic business owners do not alter business activity because foreign capital seamlessly compensates for tax-induced declines in investments. This theoretical notion is contradicted by the strong "home bias" observed in business ownership, in particular for small firms and startups without easy access to international capital markets. Recent empirical work has emphasized that taxes have heterogeneous effects on mature firms, entrepreneurial startups, and owner-managed small firms. Lowering dividend taxes on firms with dispersed ownership has been shown to shift capital from mature firms into rapidly growing firms. Moreover, capital gains taxation tends to reduce the number of innovative startups and diminish venture capital activity, while high owner-level taxes encourage small business activity and non-entrepreneurial self-employment because such firms have more opportunities to avoid or evade taxes. To obtain efficient incentives in entrepreneurial startups, contractual terms are required that ex ante guarantee that all providers of critical inputs, especially equity constrained entrepreneurs, are entitled to a share of the resulting capital value firm. Unless properly designed, owner-level taxes prevent such ex ante contracting and thus lower the likelihood of eventual success

Evidence for globally shared, cross-reacting polymorphic epitopes in the pregnancy-associated malaria vaccine candidate VAR2CSA

Pregnancy-associated malaria (PAM) is characterized by the placental sequestration of Plasmodium falciparum-infected erythrocytes (IEs) with the ability to bind to chondroitin sulfate A (CSA). VAR2CSA is a leading candidate for a pregnancy malaria vaccine, but its large size (∼350 kDa) and extensive polymorphism may pose a challenge to vaccine development. In this study, rabbits were immunized with individual VAR2CSA Duffy binding-like (DBL) domains expressed in Pichia pastoris or var2csa plasmid DNA and sera were screened on different CSA-binding parasite lines. Rabbit antibodies to three recombinant proteins (DBL1, DBL3, and DBL6) and four plasmid DNAs (DBL1, DBL3, DBL5, and DBL6) reacted with homologous FCR3-CSA IEs. By comparison, antibodies to the DBL4 domain were unable to react with native VAR2CSA protein unless it was first partially proteolyzed with trypsin or chymotrypsin. To investigate the antigenic relationship of geographically diverse CSA-binding isolates, rabbit immune sera were screened on four heterologous CSA-binding lines from different continental origins. Antibodies did not target conserved epitopes exposed in all VAR2CSA alleles; however, antisera to several DBL domains cross-reacted on parasite isolates that had polymorphic loops in common with the homologous immunogen. This study demonstrates that VAR2CSA contains common polymorphic epitopes that are shared between geographically diverse CSA-binding lines