Reuven S. Avi-Yonah recently posted Just Say No: Corporate Taxation and Corporate Social Responsibility.

He poses the question whether corporations are obligated to engage in strategic transactions solely for the purpose of avoiding taxes.  His conclusion is basically that under any theory of the firm – aggregate, real entity, or artificial entity – corporations have an affirmative obligation not to engage in overly-aggressive tax planning.

His thesis is attractive, though I'm not sure it's entirely convincing.  He basically posits that taxes are the means by which we ensure a peaceful and civilized society, and no matter what theory of the firm one endorses, it is therefore proper for corporations to shoulder that burden.  The argument, however, would seem to encompass any form of strategic behavior – i.e., the argument would apply to all behaviors in which corporations can engage that evade the spirit of various regulations intended for the greater good of society.  If so, then it's not clear that the argument gets us very far in terms of determining the legitimate boundaries of corporate behavior.

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Photo of Ann Lipton Ann Lipton

Ann M. Lipton is Tulane Law School’s Michael M. Fleishman Professor in Business Law and Entrepreneurship and an affiliate of Tulane’s Murphy Institute.  An experienced securities and corporate litigator who has handled class actions involving some of the world’s largest companies, she joined …

Ann M. Lipton is Tulane Law School’s Michael M. Fleishman Professor in Business Law and Entrepreneurship and an affiliate of Tulane’s Murphy Institute.  An experienced securities and corporate litigator who has handled class actions involving some of the world’s largest companies, she joined the Tulane Law faculty in 2015 after two years as a visiting assistant professor at Duke University School of Law.

As a scholar, Lipton explores corporate governance, the relationships between corporations and investors, and the role of corporations in society. Read More