Taxed Avoidance: American Participation in Unsanctioned International Boycotts / James R. Hines, Jr..

Format:

Book

Author/Creator:

Hines, James R, Jr.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6116.

NBER working paper series no. w6116

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Taxed Avoidance

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1997.

Summary:

American firms are subject to tax and civil penalties for participating in international boycotts (other than those sanctioned by the U.S. government). These penalties apply primarily to American companies that cooperate with the Arab League's boycott of Israel. The effectiveness of U.S. antiboycott legislation is reflected in the fact that American firms comply with only 30 percent of the 10,000 boycott requests they receive annually. The cross-sectional pattern is informative: the U.S. tax penalty for boycott participation is an increasing function of foreign tax rates, and reported compliance rates vary inversely with tax rates. Tax rate differences of 10 percent are associated with 6 percent differences in rates of compliance with boycott requests. This evidence suggests that U.S. anti-boycott legislation significantly reduces the willingness of American firms to participate in the boycott of Israel, reducing boycott participation rates by as much as 15-30 percent.

Notes:

Print version record

July 1997.