Corporate Social Responsibility and Strategic Tax Behavior
Reuven S. Avi-Yonah
University of Michigan Law School
U of Michigan Law & Economics, Olin Working Paper No. 06-008
U of Michigan Public Law Working Paper No. 69
This paper addresses two questions. First, from the perspective of the corporation, should the corporation cooperate and pay the corporate tax, or should it engage in "strategic" tax behavior designed to minimize or eliminate its corporate tax burden? Second, from the perspective of the state, should the state use the corporate tax just to raise revenue, or should it also try to use it as a regulatory tool to steer corporate behavior in directions that it deems beneficial to society? The paper argues that whatever our view of the nature of the corporation and of the legitimacy of corporate social responsibility, corporations should not be permitted to engage in strategic behavior that is designed solely to minimize their taxes, while the state should use the corporate tax as a regulatory tool.
Number of Pages in PDF File: 30
Keywords: corporate tax, corporate social responsibility
JEL Classification: H25, H26
Date posted: November 14, 2006
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