What is the Reaction Tax in business?

The Reaction Tax is the hidden cost businesses pay when they make decisions reactively — after problems have already occurred — rather than proactively, before they happen. Coined by PresciaIQ, the Reaction Tax includes the cost of emergency hiring, expedited orders, last-minute campaign pivots, unplanned overtime, and customer churn from service failures. Research suggests Australian SMBs lose 15–25% of annual revenue to reactive decision-making. PresciaIQ's predictive intelligence platform is designed to eliminate the Reaction Tax by surfacing decisions before the problem occurs — turning reactive businesses into proactive ones.