国际会计研究杂志

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Is Business Ethics the ‘Last Rampart’ Against Tax Aggressiveness?

Wegener M, Labelle

This study examines the relationship between business ethics and tax aggressiveness. Building on the conceptual model of corporate moral development, we hypothesize and find a negative association between the level of business ethics and tax aggressiveness. For our sample of U.S. firms, companies with a higher level of business ethics are less likely to be tax aggressive. Our results are robust to the use of two proxies for tax aggressiveness: the ‘mainstream’ effective-tax-rate measure and the unrecognized tax benefit, which have been identified as capturing the least and the most aggressive tax positions respectively. While we support our business ethics prediction in both our models, we also find a positive relationship between the quality of corporate governance (measured without ethical characteristics generally associated with good corporate governance) and tax aggressiveness. Our interpretation of these results is that, while ethical firms are concerned about paying their fair share of taxes, shareholders’ interest still comes first.