Firms of Endearment: How World-Class Companies Profit from Passion and Purpose

8. Society—The Ultimate Stakeholder

It is a given that no company likes to pay taxes. Many argue, with some logic, against taxing corporate profits at all because these profits ultimately flow to shareholders, who are then taxed on that income. We will not debate the merits of this argument. The reality is that corporations today are supposed to pay their fair share of taxes, and those that do not do so benefit at the expense of other companies and society at large.

The U.S. General Accounting Office recently reported that 61 percent of U.S. corporations paid no federal tax from 1996 through 2000. This seems astonishing given that these were economic boom years during which corporate profits rose rapidly. Many that did pay at least some tax sheltered ...