Are tax boycotts a real thing?

Send us Fan MailScott and Jeff discuss tax boycotts. Some corporate mangers say they are careful with their tax planning because they don't want to make their customers mad--customers might not buy things from a company they perceive as overly aggressive with their taxes. In this episode, Scott and Jeff discuss a recent study by Jeff and co-authors Scott Asay (U Iowa), Jake Thornock (Brigham Young University), and Jaron Wilde (U Iowa) called "Tax Boycotts". We describe how the scorn of consumers might harm corporations that avoid taxes. Jeff and co-authors searched high and low for evidence of consumer boycotts related to tax avoidance and were unable to find any evidence. The conclusion is that, although managers might perceive one cost of tax planning is the potential for consumer boycotts, in fact the costs rarely materialize.