TY  - JOUR
AU  - Hines,James R., Jr.
TI  - Taxed Avoidance: American Participation in Unsanctioned International Boycotts
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6116
PY  - 1997
Y2  - July 1997
UR  - http://www.nber.org/papers/w6116
L1  - http://www.nber.org/papers/w6116.pdf
N1  - Author contact info:
James R. Hines
Department of Economics
University of Michigan
343 Lorch Hall
611 Tappan Street
Ann Arbor, MI  48109-1220
Tel: 734/764-2320
Fax: 734/764-2769
E-Mail: jrhines@umich.edu
M2  - featured in NBER digest on 1998-04-01
AB  - 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.
ER  -