By Lacie Blankenship
With Tax Day (4/18) right around the corner, Americans are reminded of why taxes are such a hot topic. When you cast your ballot, do you consider taxation?
If you answered yes, you're not alone. It's no secret that voting and taxes are civic duties that typically go hand in hand; however, it might be news to you that the uncertainty brought on by elections impacts corporate tax behavior worldwide.
A new global study, soon appearing in print, by Richard H. Willis, Senior Associate Dean for the Faculty and Anne Marie and Thomas B. Walker, Jr., Professor of Accounting, finds that corporate tax avoidance (legal loopholes to reduce tax liability) increases during election years and reduces after the election. Moreover, the level of tax avoidance grows with the level of unpredictability surrounding the election (i.e., how close the election is).
