This paper hopes to establish whether there is a correlation between how much a firm pays in taxes and its public perception as a socially responsible organization. Obviously, most of the CSR ratings use a variety of factors but surprisingly not on the amount of taxes that a firm pays. One would think that a fundamental principle of a socially responsible firm would be to pay its “fair” share of taxes. Of course what “fair” means can involve a multitude of factors such as corporate tax rates but also incentives that governments give to firms so that they will locate in a country or region. However, in general one would expect that firms with high CSR scores would also pay a larger percentage of their income in taxes.
In order to establish whether this relationship exists, numerous statistical methodologies from analysis of variance to panel regressions were utilized. The results of this study will reveal whether the public does view tax paying as an admirable quality of a firm, or whether the public is generally unaware of how much companies pay in taxes and views a firm’s CSR reputation on its perceived “good” deeds.