Maybe companies that want to do an offshore inversion should start a rock band first?

by philg

A friend of a friend just cited (in an email) the U2 rock band for having “social consciousness.” As noted in this February 2007 posting, referencing a New York Times article on the subject, the U2 folks had never paid any income tax and decided to invert themselves into an offshore Netherlands trust when the Irish tax man was coming for a piece of their pie.

If U2 is beloved despite minimizing their tax bill down to basically zero while U.S. companies are excoriated for trying to cut theirs to about 25 percent (see this Forbes article on Walgreen’s, for example, where the company was trying to cut from 36 percent as a U.S. company to “the high 20% range”), wouldn’t it make sense for these companies first to merge with a popular band and then do the foreign inversion?

5 thoughts on “Maybe companies that want to do an offshore inversion should start a rock band first?”

  1. Or a University. After all, what is Harvard but a hedge fund with a sideline in education as a tax dodge?

    Otherwise,I agree with you entirely about what a hypocritical douchebag Bono is.

  2. Maybe corporations need to start spouting left wing propaganda on various issues. Then they can get away with this kind of thing. The problem is it is assumed that corporations are right wing and therefore they are only doing it for money. They need to be perceived as having a “higher” purpose. Maybe Burger King should say they did it for social justice, to protest America’s lack of a single-payer healthcare system, and to support Canada’s system. Something like that.

  3. U2 (and Bono in particular) get a lot of crap about the tax evasion, particularly in the British press. It is even mentioned in your blog post from 2007. I’ll move my comment up to here, since I was about to re-type it:

    Bono has paid millions in taxes in Ireland. It is only the royalty income which is protected. On top of that (as the article mentions) U2 pays millions in taxes globally on all sorts of endeavors.

    I see no conflict. He thinks the government should do more to help the poor and he doesn’t want to give more of his money to the government. Maybe he believes the government already has enough money. Maybe he believe HE can help poverty more by spending his fortune a little later, when it is larger.

    That was certainly the case with Gates. He’s done more good now than he would have if he had spent earlier. And if Gates’ two billion in the Foundation were in the hands of the government how much would be making it to Africa to help end childhood blindness? I’m guessing none, or close to none. But it would help the war effort, I guess.

  4. Colin: That a billionaire like Bono has paid “millions in taxes” is not surprising (see http://www.businessinsider.com/u2s-bono-will-make-more-on-facebook-ipo-than-his-30-year-music-career-2012-5 for how Bono was worth about $900 million prior to the Facebook IPO and then made at least another $1.5 billion from his investment in Facebook). And I guess he would have to pay taxes on interest and dividends like anyone else who doesn’t live in Monte Carlo. But “only the royalty income” being free from tax is pretty much the bulk of his income from music, no? That would be income from record album sales and licensing of songs for advertisements and movies.

    Anyway, the fact that Bono pays various taxes in various jurisdictions but tries to keep his most valuable assets in a tax-free jurisdiction just makes him even more like the multinational companies that are being excoriated.

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