If your friend bought a movie ticket, could you share it with him? It is accurate to say that trading music with others is stealing, which is why P2P users are being charged. If you like an artist, you should go out and support them by buying the CD. When you just rip your friend's copy of it you are hurting that artist.
Also, what is your source for record companies paying the artist 1%? I'm not discounting or crediting that number, but I'm just curious. Isn't the standard publishing rate something like 8.76 cents per song per album? What about mechanicals too? How does the money get split up among the intellectual property created within the band? What about the copyright of the actual recording?
Your quote about how record companies should start making us want to buy cds ... by paying their artists more may be conceived as contradictory. Maybe you meant something else and I am misinterpreting, but it seems like you are concerned with the welfare of the artist and wish not to screw them over like some record companies do. However, wouldn't not paying for the artist's record and instead ripping it from a friend hurt that artist?