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The Economics of Corporate Tax Selfishness

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  • Slemrod, Joel

Abstract

This paper offers an economics perspective on tax evasion and abusive avoidance done by corporations. It first reviews what is known about the extent and nature of corporate tax noncompliance and the resources devoted to enforcement. It then addresses the supply side of aggressive corporate tax planning—the industrial organization of the tax shelter industry—as well as the demand for corporate tax evasion and abusive avoidance, focusing on how the standard Allingham–Sandmo approach to tax evasion needs to be modified when applied to public corporations. It then discusses the implications of a supply–and–demand approach for the analysis of the incidence and efficiency cost of corporate income taxation, and the very justification for a separate tax on corporation income. Along the way it addresses policy proposals aimed at increased disclosure of corporate tax activities to both the IRS and to the public.

Suggested Citation

  • Slemrod, Joel, 2004. "The Economics of Corporate Tax Selfishness," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(4), pages 877-899, December.
    • Handle: RePEc:ntj:journl:v:57:y:2004:i:4:p:877-99
    DOI: 10.17310/ntj.2004.4.06
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    1. Shackelford, Douglas A. & Shevlin, Terry, 2001. "Empirical tax research in accounting," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 321-387, September.
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    More about this item

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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