U2 being accused of robbing the poor

[Chief43]

I remember Bono asking for aid to be increased, not just restructured. In particular, he asked for an additional 1 percent in the U.S.

How was that supposed to be financed?

I blame all the problems in the world on the privatised health system in the US. They love their tax avoidance.

 

[doctorwho]

No, but you know what I mean. U2's income is largely royalties, it is their bread and butter, just like salary/wages is for you and me.

Actually, that isn't true.

In today's world, album sales may account for 1/8 (at best - and this is for a big hit album) of an artist's income.

The bulk of U2's revenue is from touring.

If you don't believe that, why else would the Rolling Stones release an album (sometimes good, sometimes a bit generic) and then tour? Their albums of late may sell 500K copies in the U.S., if that. But it gives them a reason to tour. The nostalgia factor combined with an incredibly strong back catalog allows them to sell out stadiums and arenas worldwide. This is the bulk of their income. In fact, some of the squabbles within the Stones have related to delays in touring to generate this income.

The same is true for U2. The bulk of their income is from touring. This income is not on royalties. U2 pays taxes on it.

I don't know all of U2's financial situation, neither does anyone else, other than their accountants. But people make far too many presumptions based on little information.

 

[BVS]

What is downright ridiculous is to think that aid can be increased by the scale Bono was suggesting, and that it wouldn't affect the common American tax payer in some way.

Oh, believe me there are things that are much more ridiculous in this thread...

but this discussion has gone stale, the amount of misinformation in here and in the article are staggering

 

[Chief43]

In essence Bono is doing an intentionally good thing from the position he has. Unlike the last US government which in the last decade of growth has started two wars, not made a move against restructuring the health system and loosened regulations on large corporations.

I bring up this point because it is only now in a time of recession that all governments, including the Irish are complaining about tax avoidance as a majority of people spent, spent, spent without looking at the consequences in the future.

U2 however, made sure they would be financially secure by minimising their taxes and having enough growth to fall back on in these harsh economic times so as to spend the money wherever they see fit. In most cases, international aid and charities. And if the Irish government gets their hands on this, foreign aid will be the last thing on their mind.

 

[ybab gnuthca]

Well let's see, the cost of our ridiculous war for starters? Take about .00000003% of that and that covers the $160mil the Yahoo article is griping about.

I knew this was going to be brought up.

1% of America's GNP is a LOT more than $160mil.

 

[biff]

In today's world, album sales may account for 1/8 (at best - and this is for a big hit album) of an artist's income.

The bulk of U2's revenue is from touring.

If you don't believe that, why else would the Rolling Stones release an album (sometimes good, sometimes a bit generic) and then tour? Their albums of late may sell 500K copies in the U.S., if that. But it gives them a reason to tour. The nostalgia factor combined with an incredibly strong back catalog allows them to sell out stadiums and arenas worldwide. This is the bulk of their income. In fact, some of the squabbles within the Stones have related to delays in touring to generate this income.

The same is true for U2. The bulk of their income is from touring. This income is not on royalties. U2 pays taxes on it.

I don't know all of U2's financial situation, neither does anyone else, other than their accountants. But people make far too many presumptions based on little information.

I was just about to point this out as well. They pay taxes on many, many sources of income, in many countries.

Here's a response from the band; I haven't seen this posted yet:

U2 reject tax avoidance claims

Belfast Telegraph, February 25, 2009



U2 have hit back at critics who have accused the band of setting up intricate foreign tax avoidance schemes to avoid paying high taxes in Ireland.

On the eve of their new album launch, the band's manager, Paul McGuinness, last night rejected accusations of hypocrisy and said Bono, Larry Mullen, Adam Clayton and the Edge were all "personal investors and employers" in Ireland.

Addressing the issue of their tax affairs for the first time, Mr. McGuinness said much of U2 paid different taxes in different countries.

He was speaking after a group of Third-World campaigners accused the band of hypocrisy over their tax affairs, claiming "tax avoidance" schemes in general impacted on the world's most impoverished countries.

The Debt and Development Coalition (DDCI), whose members include Concern, Trocaire, Oxfam and a string of Catholic missionary orders, yesterday attacked the band's use of a tax base in the Netherlands.

The DDCI confronted Finance Minister Brian Lenihan outside his offices yesterday and told him U2 was depriving the State of revenue needed for social services and aid to foreign countries.

But Mr. McGuinness last night insisted the band is "fully compliant" with Irish tax legislation. "U2 is a global business and it pays taxes globally," he said.

"At least 95pc of U2's business -- including record and ticket sales -- takes place outside of Ireland and as a result the band pays many different kinds of taxes all over the world.

"They continue to remain Ireland-based and are personal investors and employers in the country.

"Like any other business, U2 operates in a tax-efficient manner."
U2 moved their publishing arm to Holland in 2006 after the Government capped tax-free earnings for artists at €250,000. The band was one of the biggest beneficiaries of the royalties scheme.

Nessa Ni Chasaide, of the DDCI, told Mr Lenihan millions of euro were being lost through similar tax-avoidance schemes which she claimed kept cash, in the form of foreign aid, from the poorest people in society.

As a Bono impersonator sang U2 numbers in the background, Ms. Ni Chasaide told Mr. Lenihan that tax-avoidance schemes such as the one used by U2 had a detrimental effect on impoverished countries.

"There is nothing illegal about what they have done in taking advantage of more favourable tax laws but, given Bono has invested so much in promoting an end to poverty, we see a contradiction there."

She told Mr. Lenihan: "Impoverished countries lose millions every year because of tax avoidance and it's essential that our aid programme is not undermined by a lack of action by rich countries, including Ireland."

Mr. Lenihan said the Government had abolished the "Cinderella rule" where people could say they had not spent a day in Ireland if they left by midnight. "There is a problem with smaller countries that have set up deliberate tax havens and we are debating that at EU level."

 

[BVS]

Thanks Biff...

We needed a little dose of reality in here.

 

[ybab gnuthca]

Well, Paul McGuinness said nothing that disproved Chasaide's claim.

 

[Marien]

But Mr. McGuinness last night insisted the band is "fully compliant" with Irish tax legislation. "U2 is a global business and it pays taxes globally," he said.

"At least 95pc of U2's business -- including record and ticket sales -- takes place outside of Ireland and as a result the band pays many different kinds of taxes all over the world.

"They continue to remain Ireland-based and are personal investors and employers in the country.

"Like any other business, U2 operates in a tax-efficient manner."


In my opinion Mr. McGuinness explains it very well, 95% of U2 business is NOT generated in Ireland, the band complies with ALL their taxes obligations IN Ireland AND they pay taxes in other countries as well.
They pay taxes in all the countries they sell records and play live, so why should the publishing company be located in Ireland? especially when Ireland is giving exemptions from tax paying to some foreign technological industries such as Google or Yahoo, what have the Irish governments done with the EU structural founds? why, after 30 years, are the roads still not built? Why do they campaing against the new European treaty? The Celtic Tiger has squandered his income as a new rich and not only U2, all Europeans must pay for it, why?

 

[ybab gnuthca]

Her claim is that tax-avoidance hurts the poorest people of the world in general.

Paul McGuinness explained that U2 is a tax-efficient business (which is just a rephrasement of "tax-avoiding as far as possible").

 

[Marien]

I know what her claim is, what I say is:
1- why should U2 and other Irish artists pay more, when their money is not generated in Ireland and the Irish government is offering foreign companies, not reductions, but exemptions. Why do we have to admit this double moral?
2- what is the Irish government doing with the taxes? not only the Irish pay the money they are receiving, all Europeans are paying for the structural founds and there's nothing to be seen, in this case I'm not talking about U2's money, I'm talking about MY money.

 

[ybab gnuthca]

I know what her claim is, what I say is:
1- why should U2 and other Irish artists pay more, when their money is not generated in Ireland and the Irish government is offering foreign companies, not reductions, but exemptions. Why do we have to admit this double moral?
2- what is the Irish government doing with the taxes? not only the Irish pay the money they are receiving, all Europeans are paying for the structural founds and there's nothing to be seen, in this case I'm not talking about U2's money, I'm talking about MY money.

If we are to go into specific details regarding Irish tax policies and government spending, then you could probably find a million arguments why it is perfectly fair what U2 is doing from your point of view. Not liking the government or what it is doing is not a valid reason to not wanting to pay tax, though. Regardless of what you think of it, it is democratically elected.

I think we have to keep this focused on the issue - is it OK to ask people to pay more taxes while avoiding taxes yourself? Does tax avoidance in general hurt the poorest people of the world or not? Is running "tax efficient" businesses compatible with wanting to redistribute the wealth of the world?

 

[financeguy]

I think we have to keep this focused on the issue - is it OK to ask people to pay more taxes while avoiding taxes yourself? Does tax avoidance in general hurt the poorest people of the world or not? Is running "tax efficient" businesses compatible with wanting to redistribute the wealth of the world?

Exactly. This is the issue.

 

[financeguy]

Secondly, it's socialistic presumption implies that the fruits of people's labor belong by right to someone other than themselves (the state, the "impoverished world", etc.). It's one thing to give one's own money to charity of one's own free-will; it's quite another thing to have one's money confiscated by government force and given to someone else.

Jeez. The above is a political manifesto that is really above and beyond the thread, but as a matter of interest, how are things like schools, hospitals, roads and railways financed in your universe? A magic money tree, perhaps? An infinite perpetual money generating machine? Or could it be, perchance, taxation?

 

[VintagePunk]

I think we have to keep this focused on the issue - is it OK to ask people to pay more taxes while avoiding taxes yourself? Does tax avoidance in general hurt the poorest people of the world or not? Is running "tax efficient" businesses compatible with wanting to redistribute the wealth of the world?

Exactly. This is the issue.

So by virtue of this, what you're trying to say is that U2 should find the country with the highest tax rate on record royalties, that pays the highest percentage of African aid, and pay their taxes there? Would this make you happy, even if it wasn't Ireland?

Because Ireland isn't the issue, right? It's those poor, starving Africans that U2 are depriving.

 

[mofo_spacejunk]

you are all being unfair to u2.

bono and the gang are only in it for the love of making music.

how dare anyone suggest that they would look at ensuring they minimise the amount of taxes they paid - that would be illogical considering all the hard work bono does at trying to get governments (which means our taxes and U2's) to increase funds for such causes as reducing the AIDS pandemic in Africa.

 

[Rachel D.]

This is such a dumb argument. If Bono had never said a word about poverty, then no one would care about this. And who's to say that the government would even use their money specifically to help the poor? Does it come in at tax time with a note stuck to it saying, "Here's our taxes; please help impoverished people with it. Love, U2"? How much government waste could be eliminated to make up for the money that they aren't getting from U2? You'd think that the fate of poor people everywhere was hanging on whether or not the Irish government gets $100 million (or however much it was) from U2.

I think that people are just taking advantage of this to say that Bono is a hypocrite (it's a band decision, not just Bono) or just to bash U2 in general.

 

[Chief43]

This is such a dumb argument. If Bono had never said a word about poverty, then no one would care about this. And who's to say that the government would even use their money specifically to help the poor? Does it come in at tax time with a note stuck to it saying, "Here's our taxes; please help impoverished people with it. Love, U2"? How much government waste could be eliminated to make up for the money that they aren't getting from U2? You'd think that the fate of poor people everywhere was hanging on whether or not the Irish government gets $100 million (or however much it was) from U2.

I think that people are just taking advantage of this to say that Bono is a hypocrite (it's a band decision, not just Bono) or just to bash U2 in general.

I think this is the point that people are dismissing. U2 having their business in Ireland and paying more taxes does not mean that the Irish government would use this tax for foreign aid.

And U2 may be hypocrites. But aren't we all. What about all the environmentalists which travel around the world promoting a greener earth while all the time using oil as a transit to promote their ideas. I believe the bigger picture is what needs to be focused on and not the diminishing specific squaller. It's time to be realistic rather than antagonising.

 

[ybab gnuthca]

If Bono had never said a word about poverty, then no one would care about this.

Lol, yes. That is as true as it can be. And as it was mentioned earlier, if Bono was just like any other tax-avoiding rock star (who likes to AVOID talking about the taxes of other people), then par for the course!

But that's not quite the case, to say the least.

 

[ybab gnuthca]

So by virtue of this, what you're trying to say is that U2 should find the country with the highest tax rate on record royalties, that pays the highest percentage of African aid, and pay their taxes there? Would this make you happy, even if it wasn't Ireland?

Because Ireland isn't the issue, right? It's those poor, starving Africans that U2 are depriving.

No sorry, you don't get it.

 

[icculus]

I love the music of U2, but their business/work ethic is total shit. At the same time I have enormous respect for what Bono does.

 

[VintagePunk]

No sorry, you don't get it.

What don't I get? You said that the issue to focus on was that via their tax decisions, the poverty stricken of Africa are missing out on aid. Here's your exact quote:

I think we have to keep this focused on the issue - is it OK to ask people to pay more taxes while avoiding taxes yourself? Does tax avoidance in general hurt the poorest people of the world or not? Is running "tax efficient" businesses compatible with wanting to redistribute the wealth of the world?
Quote:

So tell me, what part of it am I not getting? In my hypothetical, they'd be paying higher taxes on income earned all over the world, and a higher percentage would be going to African aid. The only thing is, they'd be paying it in a country that's not Ireland.

I think this is the point that people are dismissing. U2 having their business in Ireland and paying more taxes does not mean that the Irish government would use this tax for foreign aid.

Of course it doesn't mean that, and Ireland probably wouldn't change their aid amounts in response to anything U2 does or does not do with regard to their taxes. I don't see how people can think that one follows the other. They're obviously equivocating, here. Do critics not know the full story? Do they not think people are capable of critical thinking? It's baffling.

 

[financeguy]

Interview with Bono in today's Irish Times. Like McGuinness already did, he sidesteps the point once again, while annointing himself as the victim. Pure Messiah complex.

Bono 'hurt' by criticism of U2 move to Netherlands to cut tax - The Irish Times - Fri, Feb 27, 2009

The cap of €250,000 on tax-free incomes for artists was introduced in 2006 by then minister for finance Brian Cowen. A tax exemption scheme for artists had originally been introduced in 1969 by the minister for finance at that time, Charles Haughey.

As a very high-grossing act through album sales, tour receipts and publishing/royalties income, the cap imposed in 2006 would have left the band with a multimillion tax bill.

Interesting extract from the article, don't know if it's accurate or not.

Seems to imply they were getting away with paying zero tax on their tour receipts as well, and not just royalties, is this correct?

 

[financeguy]

So tell me, what part of it am I not getting? In my hypothetical, they'd be paying higher taxes on income earned all over the world, and a higher percentage would be going to African aid. The only thing is, they'd be paying it in a country that's not Ireland.

They are reducing their tax bill by moving this income to Holland, accordingly they are not enabling a higher worldwide % going to African aid. Precisely the opposite is the case.

 

[BVS]

What would be the monetary difference between if their taxes went to Ireland and then Ireland contributed toward Africa relief and what they ended up donating out of their own pocket?

Ask yourself that...

 

[VintagePunk]

They are reducing their tax bill by moving this income to Holland, accordingly they are not enabling a higher worldwide % going to African aid. Precisely the opposite is the case.

I know. That's why I asked if my hypothetical would be better, if they paid in the country that taxes artists' royalties at the highest rates, a country that also had the highest rate of aid sent to Africa. So far no one has answered this. Because if the issue really is the poverty stricken Africans, the answer would obviously be yes.


The very, very obvious point I'm attempting to make is that to some, it's obviously not about African aid, it's about slamming a very wealthy and powerful band. Slamming a band for doing something completely legal. And what if the money that they gained by doing what they're doing in taxes, they paid that out in personal donations? Which I'd be willing to bet is the case, and more, probably.

So to pretend it's about Africa is ridiculous. Ireland's not losing a damn thing - it's money earned worldwide, a very, very tiny percentage of which was earned in Ireland. They still pay a hell of a lot of taxes there.

I don't see where this is anything but pettiness and utter jealousy. The fucking aid groups should be grateful for the attention that Bono has brought to their cause.

 

[BVS]

Come on VP, we know that's not what it's really about...

 

[VintagePunk]

Come on VP, we know that's not what it's really about...

I'm guess I'm just too dense to get it.

 

[ybab gnuthca]

What would be the monetary difference between if their taxes went to Ireland and then Ireland contributed toward Africa relief and what they ended up donating out of their own pocket?

Ask yourself that...

This is ludicrous. This is what ANY other person could say about any matter involving their tax and what it is used for. "I don't want to hand the government extra tax money to improve health care, because if I donated the money myself to some hospital or paid for someone's operation myself, I would be sure that 100% of my money went to healthcare!".

Sorry dude, that's not how living in a society works.

Bono asks for governments to force people to donate (via taxes) because he knows people won't be paying out out of their own pockets. And even if that wasn't the case, some kind of organising and collection of the donations would have to be made in order to make big scale investments. People don't trust private "charity" groups enough to handle that amount of money without corruption taking place.

 

[ybab gnuthca]

I know. That's why I asked if my hypothetical would be better, if they paid in the country that taxes artists' royalties at the highest rates, a country that also had the highest rate of aid sent to Africa. So far no one has answered this. Because if the issue really is the poverty stricken Africans, the answer would obviously be yes.


The very, very obvious point I'm attempting to make is that to some, it's obviously not about African aid, it's about slamming a very wealthy and powerful band. Slamming a band for doing something completely legal. And what if the money that they gained by doing what they're doing in taxes, they paid that out in personal donations? Which I'd be willing to bet is the case, and more, probably.

So to pretend it's about Africa is ridiculous. Ireland's not losing a damn thing - it's money earned worldwide, a very, very tiny percentage of which was earned in Ireland. They still pay a hell of a lot of taxes there.

I don't see where this is anything but pettiness and utter jealousy. The fucking aid groups should be grateful for the attention that Bono has brought to their cause.

Read these quotes by Chasaide

[...] told Mr. Lenihan that tax-avoidance schemes such as the one used by U2 had a detrimental effect on impoverished countries.

"There is nothing illegal about what they have done in taking advantage of more favourable tax laws but, given Bono has invested so much in promoting an end to poverty, we see a contradiction there."

She told Mr. Lenihan: "Impoverished countries lose millions every year because of tax avoidance and it's essential that our aid programme is not undermined by a lack of action by rich countries, including Ireland."


Is it really your honest believe that this woman is just petty and jealous?

As Bono is advocating a larger percentage of people's taxes to go to foreign aid, then yes, he would actually show a good example if he moved his business to a country that taxed artists' royalties at the highest rate and with the highest rate of aid sent to Africa. Doing his "perfectly legal" business moves in the opposite direction, and thereby rewarding the countries that live up to his own ideals. At least it would make sense.

When people asked him why, he could say: "Country X had a tax and foreign aid policy more concordant with my ideals and what I'd like other people to do".

Instead of just

"Um, ehm, we are a tax-efficient business!" (E.g. "We don't like taxes").

As of now, he's doing the opposite, and I can see why some people can't take him seriously.