I’m a little late on this one, news-wise, but someone mentioned to me over the weekend that U2 have moved a load of their business affairs to Holland To avoid paying tax back home.
I’ve always found this kind of tax exile behaviour pretty reprehensible. You choose where you live, and render unto caesar what is caesar’s. Taxation isn’t the great evil – it is, until someone comes up with something better, the least-worst way to redistribute the wealth a little, based on the assumption that no-one makes money on their own, we’re all beholden to eachother to some extent, and if you’ve got a shitload of money, there’s zero evidence that having an even bigger shitload of money will make you happier. In fact, the misery of bitterness over how ‘unfair’ it is to be taxed is likely to make you more miserable if you’ve got loads of money.
So, when a band famed for their campaigning stance on the insidiousness of certain aspects of global finance, to do something that so clearly directs wealth away from their country of birth, of residence, of nurture seems not only fiscally suspect, but displays a scant lack of gratitude…
I just asked BDB about this via MSN, and his comment was ‘it depends what you’re planning on doing with the money’, which seems to be the american ‘compassionate conservative’ argument against higher taxation – let people earn more, and choose where to donate it.
the problem is, free markets are never free, and we’ve already got a world where charity fund-raisers are paid daft amounts of money to access all that financial goodwill that is out there. When individuals take it on themselves to do the redistribution themselves, certain hot-button charities do incredibly well, and others fall apart, regardless of how vital their work is.
The role of governments in this is to redistribute based on need, not on how effectively an advertising campaign tugs at the heartstrings. Yes, central government can be deeply inefficient, beaurocratic, non-sensical etc. etc. but it is still the least-worst option.
Within this web of life, the rich do bear some of the responsibility for the poor – neither riches nor poverty exist in a vacuum, and sharing the love benefits everyone.
So shipping your business dealings off-shore strikes me as complicity in the worst two tier-ism of globalisation. The rich end up paying a much smaller percentage of their wealth in tax than the poor, so those trying to feed their kids on one crappy McWage are struggling, while U2 and the Stones get to keep a few more million a year… yeah, that sounds like compassionate conservativism to me. What a crock.
Anyway, has anyone seen a response from the U2 camp on this? I’m certainly open to the notion that there’s a reasonable excuse for this, but I’m buggered if I can tell what it’s going to be…
Yeh, there’s been lots of discussion about it on their discussion forum on their own website.
My understanding is that that Irish govt. have changed their tax rate from about 3 percent to 40 percent overnight (and no, that’s NOT a typo). So they’ve done what any sensible business would do.
And it’s a part of their business that’s been moved, not the whole shebang. They still live there, invest there, and pay their taxes there.
The Stones did it in the 70s because the Brit government didn’t realise that that level of higher-rate taxation economically doesn’t work – it just bankrupts people, and makes it harder to keep up earning enough. There’s a point at which it tips over and doesn’t generate the revenue that’s its supposed to, so it doesn’t mathematically work to just bump up the tax rates.
Sounds like the Irish government have got their sums wrong.
Also no-one actually knows how well off U2 really are. They’ve never had to take their managemenet to court or anything like that, so the figures are sketchy at best. Apparently, before All That You Can’t Leave Behind, they were not as well off as everyone thought they were. They should have been much richer than they actually were, but they’d been too philanthropic over the years, and so had nice house and cars, but that was about it.
I’ve never understood why people thinking its ok to criticise how other people spend their money, personally. It’s none of my business. I think Bono has taken up a much better role as a spokesperson, which is the right choice IMO – I don’t see it as his place to “lead by example”, and really no-one actually knows a thing about their real financial affairs as I suggested earlier, so I suspect that a lot of this is about the Guardian (which is where the story originated) finding their much-sought after vaccine for the “Bonophilia” that has been invading our shores of late.
Just my 2p.
Steve – I agree with you 100% on this. You have reflected my thoughts entirely – except with better articulation. The engraving on an external wall of the US Internal revenue HQ says that “Taxation is the price we pay for civilisationâ€. It might seem somewhat trite in these cynical days, and yet I do feel a strong resonance with the statement. It’s a great pity that so often cogent and thought-proving statements like that one might be devalued by people who think they emanate exclusively from the Armani-suited wide boys from Fifth (or is it Filth?) Avenue. Ho bloody hum. Anyway ….. more power to your blog Mr. L.
Mike,
What happened was that they removed a loophole whereby ‘Artists’ were exempt from personal tax. Their corporation tax is still pretty low. The section of the company that was moved is the one to do with Royalty payments, so shouldn’t, if I’ve read it right, be liable to personal tax on that level…
But anyway, it’s not a tax increase as such, just the removal of a loophole. One that the Dutch still maintain…
I totally agree about U2 not being required to lead by example, but if you stick your head over the parapet to such a visible degree, people are going to be very aware where there appears to be such a disconnect between what you seem to be asking others to do, but don’t appear to be doing yourself. I think that such questioning is probably in the long run good for the band – I think it’s good for all of us to be questioned once in a while. It’s also their prerogative to say ‘mind your own fucking business’.
It’s one of the reasons why I’m glad I’m a solo bassist, not a purveyor of finest quality overblown emotional stadium rock… I doubt I’ll ever even be VAT registered. ;o)
Oh, and BTW, Mike, it was really lovely to see you over the weekend, and meet Ivy – as I said to her lovely mum, she’s like an almost perfect genetic mashup of the two of you. :o) x
Interesting points Steve.
I’m aware of how it looks, and the possibility of them being open to the criticism of “hypocrites”, which is a fairly inevitable consequence of their choice. I suppose, though, that I think that they’ve always had the unfortunate baggage of having more expectations than most projected at them. They seem to be a locus for a lot of desire on the part of Christians particularly, and when they don’t live up to those expectations, they get shot down mercilessly.
I’m very wary of taking them too seriously. I like what they APPEAR to put across mostly, but with the full knowledge that that could just be my projections. At they end of the day, they could be devil worshippers for all I know.
And I agree…
The goal is not “soul”
..its VAT registration.
I was responding to the charge of hypocrisy really, rather than claiming tax avoidance was a good idea. Bono’s never really done the ‘give us your money’ thing, he’s always campaigned on trade and set up businesses, like Red, that benefit his ’causes’. I can understand why he doesn’t want to become a Lady Bounty figure.
Besides, all of us do this to some extent. Gift Aid? Anti-democratic tax avoidance really.