Author Topic: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY  (Read 1772 times)

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Offline jenniferh aka jen

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One of those rare articles of a journalist defending the band

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LAS VEGAS REVIEW-JOURNAL
Any business that wants to stay in business has to be smart with its money — whether it’s a Fortune 500 company, a mom-and-pop shop, or arguably the biggest rock band on the planet. U2 and its philanthropic frontman, Bono, recognized that fact back in 2006, when for tax reasons the quartet moved a portion of its business out of its homeland of Ireland and to the Netherlands.

In the years since, U2 has taken some flak for that move. Last week’s launch of the band’s latest U.S. tour — which is in Phoenix tonight — provided its members with another opportunity to defend their sound tax decisions. As reported by Anita Singh of The Telegraph, Bono said wealthy people who do not take advantage of tax breaks are being “stupid in business.”

What makes the band’s decision even more sensible is that, as guitarist The Edge told Ms. Singh, the vast amount of its business is done outside of Ireland. Added Bono: “The smart people that we have working for us are trying to just be sensible about the way we’re taxed. … And we pay a fortune in tax, just so people know.”

Bono has brought worldwide recognition — and boatloads of his own cash — to important causes such as HIV/AIDS research and developing potable drinking water in Africa. But charitable efforts such as these often run counter to many people’s belief that limiting one’s tax burden is wrong, when in fact so many charitable efforts are possible because of reduced tax bills. “Because you’re good at philanthropy, I think, and because I’m an activist, people think you should be stupid in business. I don’t run with that,” Bono told Ms. Singh.

Beyond philanthropy, when U2 hits the road, the band becomes a massive jobs creator, with huge stage crews criss-crossing continents in a fleet of semis, and hundreds of locals employed at each sold-out tour stop. Again, without the band making sound financial decisions, that kind of economic impact can’t happen. (Note to U2: A sparkling new arena opens next year in Las Vegas and surely would welcome such commerce.)

The hand-wringing over U2’s tax decisions is driven by the idea that competition among states and countries to create favorable tax climates is bad. But instead of people asking why U2 isn’t keeping all its business in Ireland, they should ask why Ireland isn’t relaxing its corporate tax rate. And that same question is applicable in the United States, where agitators and activists frequently criticize businesses for choosing to headquarter in states or countries with better tax climates.

Many in government wear the ability to separate you from your money as a badge of pride — and hardly in the name of love. All they want is you — or rather, your taxable earnings. And if businesses and individuals allow it, governments will tax them until the end of the world — states will never find all the taxes they’re looking for. But if you create better tax policy for businesses and individuals, they will follow, and so will economic prosperity — making for a beautiful day.



Offline ZooClothes

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #1 on: May 23, 2015, 09:38:44 AM »
Nice. And the U2 song puns in the last paragraph made me chuckle.

Offline jenniferh aka jen

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #2 on: May 23, 2015, 11:24:56 AM »
It's a sound analysis and argument. I guess if people knew what percentage of income these guys paid in taxes versus their own, they would shut up.

Offline This Dave

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #3 on: May 23, 2015, 12:05:41 PM »
I hope we're still talking about this until the day we die.

meximofo

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #4 on: May 23, 2015, 12:08:31 PM »
Great article, cringe-worthy last paragraph with all the puns. The old concept of philanthropy and activism where you throw-away some money to feel good about yourself or throw a bucket of blood to feel like a rebel is obsolete. Bono calls himself a "factivist". The new type of philanthropy Bono, Bill Gates and others are doing is based on facts, the people benefited have to show results and keep track of every spending money, etc. It may not look as cool as some dudes trying to clean Sellafield hopelessly, but it gives way better results. Welcome to the 21st century.

Offline p8ru2

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #5 on: May 23, 2015, 06:42:26 PM »
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It's a sound analysis and argument. I guess if people knew what percentage of income these guys paid in taxes versus their own, they would shut up.

I think it's more: they pay more in tax dollars (total) than percentage & in more countries. Likely less % of income (like Buffett) than many average citizens but overall much more in total + more in total donations.  Regardless, its true that businesses want to be 'tax efficient' and it's much easier for wealthy individuals & big corporations to move wealth to countries that tax less. The average person can't do that - it's a whole different level. Wealthy individuals & corporations have more options, sometimes at the expense of other things ( local jobs, revenue to support social services, infrastructure, sometimes labour & human rights etc - although not U2 w/ the latter).  There's a reason Apple makes billions - it doesn't keep its money in the USA. 

Offline seashells

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #6 on: May 24, 2015, 09:34:22 AM »
The last paragraph could go in the obsessed fan thread (although it takes one to know one).  I think it's great.

Offline jenniferh aka jen

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #7 on: May 24, 2015, 11:10:53 AM »

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It's a sound analysis and argument. I guess if people knew what percentage of income these guys paid in taxes versus their own, they would shut up.

I think it's more: they pay more in tax dollars (total) than percentage & in more countries. Likely less % of income (like Buffett) than many average citizens but overall much more in total + more in total donations.  Regardless, its true that businesses want to be 'tax efficient' and it's much easier for wealthy individuals & big corporations to move wealth to countries that tax less. The average person can't do that - it's a whole different level. Wealthy individuals & corporations have more options, sometimes at the expense of other things ( local jobs, revenue to support social services, infrastructure, sometimes labour & human rights etc - although not U2 w/ the latter).  There's a reason Apple makes billions - it doesn't keep its money in the USA.

I'm looking at it from the Irish perspective too. They pay a percentage of personal income which is obviously more then other people, money wise. The complainers in Ireland don't seem to take that into consideration when they complain. They make it out that the guys don't pay any tax in Ireland.

Offline p8ru2

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #8 on: May 24, 2015, 12:22:11 PM »
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I'm looking at it from the Irish perspective too. They pay a percentage of personal income which is obviously more then other people, money wise. The complainers in Ireland don't seem to take that into consideration when they complain. They make it out that the guys don't pay any tax in Ireland.

I think with the "global economy" so prevalent now and mainly benefitting wealthy 1% that tax policies & attitudes are way behind, archaic, needing a rethink and overhaul.   There's an absolute shift in economic power from countries and governments to corporations & high net worth wealth. 

There's a difference between tax evasion (illegal) & tax avoidance (legal). While the former is offensive, reprehensible, & can be prosecuted, tax laws in any country allow the latter.  Opinions definitely range & differ on the latter when you remove a close-focus objective lens on policy or actions, and you bring into it wider focus of subjectivity & resulting consequences of such actions. 

The band have multiple homes in multiple jurisdictions around the world (paying local, consumer & property taxes), they pay local taxes similarly where they have concerts & stimulate economy, but their music corp pays lower income taxes in the Netherlands. I'm not familiar with what labour & social taxes they pay in the Netherlands, without researching it.   

Most people & businesses abhor paying higher taxes if they can help it & politicians/ governments cater to this (right or wrong).  On one hand the theory is if you set the bar lower with taxes, you can attract businesses to stay & pay taxes + put 'more money' into the local economy and local taxpayers pockets at source.  However, this policy approach doesn't necessarily result in 'trickle down' with more local jobs & local investment.  The race to the bottom mentality, neglects maintaining essential services & infrastructure etc for local public good to the detriment of locals & communities, putting decision making  of investment priorities in the hands of corporate & global wealth.

For example, with U2 legally paying lower corporate tax in the Netherlands (shrewd business-wise) vs. Ireland, the Dutch benefit from having a lower tax rate & gaining revenue from U2, and whatever U2 gain in tax savings can be put towards their own income, personal goals, charities & philanthropy. Ireland doesn't see that revenue - the Netherlands does, and Ireland is struggling.  Where Ireland probably benefits, is indirectly in personal income taxes paid by Irish employees, the band's properties & consumption in IE, and perhaps the band's personal incomes,  if IE citizenship requires it. (I don't know to what extent they pay personally income tax in IE).   Same with Gates & other high net worth individuals & corporations, although USA taxes individuals on worldwide assets - with ways around that with tax havens, foundations, trusts & shell companies.

Anyway, at present, this is all legal and individuals & corporations that work within the law can't really be blamed. Until gov't policies catch up and overhaul policies that encourage and allow these practises, there'll be capital flight that shifts power & influence and increases fiscal inequality to the few from the many. 
« Last Edit: May 24, 2015, 12:29:59 PM by p8ru2 »

Offline Mary C

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #9 on: May 24, 2015, 02:17:28 PM »
Restore Glass-Steagall Actin the US, that had graduated tax rates. FDR put that into law for a reason and during the time that was in, the middle class was the biggest it's been. Bush threw that out for a reason, and Main Street--and the world--have been paying the price ever since.

Offline Howler72

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #10 on: May 24, 2015, 10:14:25 PM »
I agree with you 100%, however it was not Bush that repealed Glass-Steagall it was Bill Clinton who actually put into law Gramm-Leach-Bliley Act, which repealed some of the provisions of the Glass-Steagall Act.  ;)

Offline EducateMyMind

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #11 on: May 27, 2015, 12:18:18 PM »
Just throwing this out there: I live in Las Vegas, and the LVRJ is a notoriously right-wing, conservative newspaper.

Borack

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #12 on: May 27, 2015, 09:21:21 PM »
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One of those rare articles of a journalist defending the band

You are not allowed to view links. Register or Login

LAS VEGAS REVIEW-JOURNAL
Any business that wants to stay in business has to be smart with its money — whether it’s a Fortune 500 company, a mom-and-pop shop, or arguably the biggest rock band on the planet. U2 and its philanthropic frontman, Bono, recognized that fact back in 2006, when for tax reasons the quartet moved a portion of its business out of its homeland of Ireland and to the Netherlands.

In the years since, U2 has taken some flak for that move. Last week’s launch of the band’s latest U.S. tour — which is in Phoenix tonight — provided its members with another opportunity to defend their sound tax decisions. As reported by Anita Singh of The Telegraph, Bono said wealthy people who do not take advantage of tax breaks are being “stupid in business.”

What makes the band’s decision even more sensible is that, as guitarist The Edge told Ms. Singh, the vast amount of its business is done outside of Ireland. Added Bono: “The smart people that we have working for us are trying to just be sensible about the way we’re taxed. … And we pay a fortune in tax, just so people know.”

Bono has brought worldwide recognition — and boatloads of his own cash — to important causes such as HIV/AIDS research and developing potable drinking water in Africa. But charitable efforts such as these often run counter to many people’s belief that limiting one’s tax burden is wrong, when in fact so many charitable efforts are possible because of reduced tax bills. “Because you’re good at philanthropy, I think, and because I’m an activist, people think you should be stupid in business. I don’t run with that,” Bono told Ms. Singh.

Beyond philanthropy, when U2 hits the road, the band becomes a massive jobs creator, with huge stage crews criss-crossing continents in a fleet of semis, and hundreds of locals employed at each sold-out tour stop. Again, without the band making sound financial decisions, that kind of economic impact can’t happen. (Note to U2: A sparkling new arena opens next year in Las Vegas and surely would welcome such commerce.)

The hand-wringing over U2’s tax decisions is driven by the idea that competition among states and countries to create favorable tax climates is bad. But instead of people asking why U2 isn’t keeping all its business in Ireland, they should ask why Ireland isn’t relaxing its corporate tax rate. And that same question is applicable in the United States, where agitators and activists frequently criticize businesses for choosing to headquarter in states or countries with better tax climates.

Many in government wear the ability to separate you from your money as a badge of pride — and hardly in the name of love. All they want is you — or rather, your taxable earnings. And if businesses and individuals allow it, governments will tax them until the end of the world — states will never find all the taxes they’re looking for. But if you create better tax policy for businesses and individuals, they will follow, and so will economic prosperity — making for a beautiful day.

The article is clever and arguably persuasive BUT it contains at least one logical fallacy or dubious assertion. If you examine the phrase in bold above, you have to ask "Why not?" And the eventual answer will have more to do with business acumen and nothing to do with Ireland vs. The Netherlands as tax centres. Is the author saying U2 would or could not help generate local revenues in tour cities if it were taxed in Ireland instead of the Netherlands? That assertion seems to be the claim but it is also bogus, as the only difference would be that the Irish Economy would pocket a higher portion of taxes. A clever article yes, but one that's at least partially incorrect - at least on that claim.
« Last Edit: May 27, 2015, 09:23:33 PM by Borack »

Offline Bantering ram

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Re: EDITORIAL: U2’S SMART TAX DECISIONS BOOST CHARITY, ECONOMY
« Reply #13 on: June 02, 2015, 02:35:02 AM »
^ Good point Borack. If the journalist had attempted to argue that the band wouldn't be 'a massive jobs creator' if they'd decided not to move part of the business to the Netherlands, (s)he'd be making a fool of themselves but fudging the point by writing 'making sound financial decisions' is difficult to disagree with....even if it is a watered down, statement of the obvious!