Ethical Dilemmas In State And Local Tax Planning: Balancing Profit Maximization And Social Responsibility

Abstract

This research delves into the ethical dilemmas businesses face when attempting state and local tax planning, primarily concentrating on how these dilemmas impact their social responsibility commitments. By navigating through the complex interplay between seeking profit maximisation and adhering to ethical standards, this research aims to uncover the challenges and opportunities in aligning state and local tax planning strategies with corporate social responsibility (CSR) principles.

Employing a comprehensive review of existing literature, detailed case studies, and an analytical examination of current tax laws, this research adopts a multi-faceted approach to understand the ethical landscape of state and local tax planning. Through this methodology, the study aims to provide a holistic view of some moral dilemmas businesses face and the strategies they can implement to balance profitability and social accountability.

The study identifies diverse strategies different companies have adopted to navigate these ethical difficulties, demonstrating how most businesses successfully maintain their status of "good standing" in various states they operate in by complying with these states' tax regulations.

Drawing on the findings, the study proposes actionable recommendations for businesses aiming to refine their tax planning practices and minimise their taxes ethically. These recommendations underscore the importance of transparency, stakeholder engagement, and adherence to the spirit of the law as foundational elements of ethical tax planning.     Corporations comply with state and local tax planning to keep a "good standing" status with the jurisdictions in which they operate. This prevents any heavy fines, penalties, and lawsuits.