Corporate Tax Behavior Can Be Changed By Public Pressure [STUDY]

A couple of decades ago, the senior management of major corporations was often less than responsive to public pressures of various sorts. With a few exceptions where major media got involved, issues such as customer complaints or public outrage over corporate policy (labor exploitation, tax avoidance) could almost always be ignored with little or no significant consequences.

Public pressure in the second decade of the 21st century is a completely different kettle of fish. In today’s wired, social media-fueled world, a single customer complaint can become a firestorm of negative PR for a business. Corporate tax behavior, in particular, corporate tax evasion has become a hot button topics these days in many places worldwide. The recent huge public blow-back about large U.S. firms relocating their corporate headquarters abroad in tax inversion deals to reduce their tax burdens is an excellent example of how things have changed (of note, several planned tax inversion deals were cancelled after the brouhaha).