The Arctic Monkeys in 2006, when they were still just a bunch of likely lads from High Green. Photo via Flickr user Tammy Lo
In 1973, Cat Stevens, who was then one of the biggest music stars in the world, earned so much money that he moved to Brazil in order to hang out with his cash on a more long-term basis. Back then, the British government wanted about 80 percent of Cat’s dough. Cat thought that wasn’t too cool, man. So he picked up his acoustic guitar and his Collected Works of Kahlil Gibran and boarded a plane bound for Rio, where tax rates were lower, the sun always shone on the Copacabana, and the military juntas were always relatively friendly.
He was soon joined by the Rolling Stones and a number of other rock bands who didn’t appreciate Britain trying to close its yawning deficits with their money. “Tax exile,” they called it. It's kind of like when your government wants to kill you, so you go into exile. Only your government just want to kill your money.
In 2014, all of that palaver is thankfully so much easier; you don't have to accompany your money into exile any more. Now, thanks to modern technology, if you're in the Arctic Monkeys and you have over a million pounds that you’d prefer weren't taxed, a few clicks of a mouse and it can be sunning itself in Jersey—even if you’ve never been to Jersey in your life. There your money can do its own thing, living it up with the money of other famous people: Michael Caine, George Michael, Katie Melua. Celebrity money loves to mingle, and thanks to recent whistleblowing on something called the Liberty scheme, we now know that all of those artists' bucks were at the big money party—along with the usual rogues' gallery of businessmen, landowners, and Mark Knopfler.
It seems obvious that the the Jimmy Carr Defence is about to be invoked: "The advisors I spoke to said everything was fine. I didn’t really know what all them little bits of white paper were, honest."
All of which is bullshit, of course. No one gives, as the Arctics did, over a million pounds to anyone without getting the 15-minute explanation rather than the elevator pitch. For a million pounds it might even be worth renting out a small conference room and an overhead projector. Consider the alternative: If you ever find yourself saying to someone, “Dude, what exactly did you do with my million pounds?”—well, the joke is definitely on you.
Which isn’t to say there isn’t a heavy layer of cosmetic touch-up around schemes like Liberty. No doubt Alex Turner and friends were told the usual things by these advisors, including the credo of their entire industry: “Every citizen has the right to avoid tax, no one has the right to evade tax.” And no doubt part of them bought into it. Everyone would like to imagine that all tax crimes are committed by soulless bankers, but even when you wake up one day and find yourself CEO of a pop group that makes more money than anyone could ever reasonably spend, it’s hard not to think of yourself as an essentially righteous man. You're an artist, after all.
Yet, in every practical sense, once your record deal has enough 0s at the end of it, you are now incentive-aligned with those evil bankers. You’re the 0.5 percent. And frankly, after a certain point, you’d rather not pay top dollar for other people failing to sort their shit out. Cat Stevens found this out. Mick Jagger found this out. Why should the government lay its hands on a cool half million you’ve earned by the sweat of your bandana? That’s harsh, man. Tax hurts. And lots of tax hurts lots more because you see absolutely nothing back for it.
Photo via Flickr user Neon Tommy
When you’re earning £20,000 ($35,000) a year, the UK government is subsidising you—your taxes barely pay for enough army and police to keep society from turning into a Hobbesian every-man-for-himself nightmare. But when you're earning £200,000 ($350,000), you’re paying for a lot of other people’s cops and medical bills and mobility scooters and EMAs. That is supposed to be the point. Everyone accepts that part of the social contract, but most people sense that this rests on the underlying assumption that the odds are against you rising far enough to have to pay serious money. So it all feels like a one-way bet when you’re small and struggling.
The fact is, if Liberty-style avoidance was extended to every Joe Muggins, there wouldn't be enough left over in the National Health Service coffers for more than a few cotton swabs and a wooden mercy-club like the one dad used to kill the rabbits with myxomatosis. Evade-avoid? Seriously, how disingenuous can you get? The point is precisely the avoid-not-evade nature of the thing. The point is that there's a level of tax minimization that makes a mockery of the whole purpose of a progressive tax system in the first place.
The irony here is despite the fact they evidently believe tax rules that apply to the rest of us needn't apply to them, it’s very likely that the Arctic Monkeys see themselves as left wing. They come from Sheffield. They’re slightly aggro. Therefore they belong to the left. It’s obvious. And no, it doesn’t matter what they think about Labour Party leader Ed Miliband’s energy policies: in modern Britain, "left wing" is shorthand for "a really chill bro, a.k.a. the Underdog," and "right wing" is shorthand for "a really uptight bro, a.k.a. the Overdog, a.k.a. the Man."
British pop institution and tax avoider George Michael Photo via Wikimedia Commons
But many of our pop stars—if you sat them down and audited their beliefs—would come out much further to the right than they'd probably like to admit. George Michael, who was also a participant in the Liberty scheme, declared in the 90s that he’d be prepared to pay a 60 percent tax rate if a Labour government came to power. Then he signed up to Liberty in 2008, a scheme that between 2005 and 2009 saw 1,600 stakeholders invest a reported £1.2 billion ($2 billion). To put that into perspective, the Exchequer reckons that total tax avoidance throughout the UK costs the taxman £5 billion ($8.55 billion) a year.
At least the likes of Michael Caine, whose name was also attached to Liberty, is a long-time Tory donor who's spent years banging the drum for lower taxes. He got a bit carried away with that, true. But then again, the real charges that get you in the end—the charges of hypocrisy—don't stick to him.
The Arctic Monkeys, on the other hand, are finding out the hard way that believing in a high-public service Britain and a low-tax Arctic Monkeys are incompatible aims. You could say that how they now fare in the eyes of the public entirely depends on an old gangland chestnut—whether you prefer the people who tell you they’re fucking you, or the people who don’t tell you they’re fucking you, then fuck you anyway.
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