Accounting: Do socially responsible firms pay taxes?

Published: 7 October 2021

27 October. Professor Bruce G. Carruthers, Northwestern University

Professor Bruce G. Carruthers, Northwestern University

'Do Socially Responsible Firms Pay Taxes? CSR and Effective Tax Rates'
Wednesday 27 October, 1pm - 2.15pm (BST)
Zoom online seminar

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The social responsibilities of for-profit corporations have gained importance recently, and CSR has become both a goal and a set of guidelines for various corporate activities. CSR encompasses a number of dimensions, typically including environmental impact, treatment of employees, and relations to local communities. Here we consider the relationship between CSR and corporate taxes: do firms that are “good citizens” also pay higher taxes? Is it the social responsibility of firms to help pay for public services? Focusing on the percentile rank of effective tax rates, and using random effects panel regression of a data set of publicly-traded U.S. firms that includes measures of CSR and many financial variables, we find that the relationship between CSR and taxation is a complicated one that warrants further investigation. However, strong corporate governance, a typical component of CSR, is consistently associated with lower tax rates, suggesting that responsibility to shareholders conflicts with broader social responsibilities.


Bruce G. Carruthers is the John D. MacArthur Professor of Sociology at Northwestern University and Non-resident Long-term Fellow at the Swedish Collegium for Advanced Study. He received his PhD from the University of Chicago in 1991 and works in the areas of economic sociology, comparative-historical sociology, and the sociology of law, with research funding coming from the National Science Foundation, the American Bar Foundation, the Russell Sage Foundation, the Institute for New Economic Thinking, and the Tobin Project. He has written six books, the most recent forthcoming with Princeton University Press and entitled The Economy of Promises: Trust, Power, and Credit in America, as well as numerous articles. Carruthers has been a visiting fellow at the Russell Sage Foundation, the Radcliffe Institute for Advanced Study, the Wissenschaftskolleg zu Berlin, the Kluge Center at the Library of Congress, the Swedish Collegium for Advanced Study, and was the recipient of a Guggenheim fellowship. 

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First published: 7 October 2021

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