Document Type

Article

Publication Date

2014

Abstract

This Article will address the question of whether publicly traded U.S. corporations owe a duty to their shareholders to minimize their corporate tax burden through any legal means, or if instead, strategic behaviors like aggressive tax-motivated transactions are inconsistent with corporate social responsibility (“CSR”). I believe the latter holds true, regardless of one’s view of the corporation. Under the “artificial entity” view, such behavior undermines the constitutive relationship between the corporation and the state. Under the “real view,” such behavior runs contrary to the normal obligation of citizens to comply with the law (even absent effective enforcement). And under the “aggregate view,” such behavior differs from other more-acceptable forms of shareholder profit-maximization, in that it weakens the ability of the state to carry out those functions that the corporation is barred from pursuing. To contextualize and exemplify this analysis, I present a case study of profit-shifting at Caterpillar Inc. (“CAT”).


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