Corporate Social Responsibility and Strategic Tax Behavior

30 Pages Posted: 14 Nov 2006

Date Written: November 2006


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.

Keywords: corporate tax, corporate social responsibility

JEL Classification: H25, H26

Suggested Citation

Avi-Yonah, Reuven S., Corporate Social Responsibility and Strategic Tax Behavior (November 2006). U of Michigan Law & Economics, Olin Working Paper No. 06-008, U of Michigan Public Law Working Paper No. 69, Available at SSRN: or

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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