By Lucy Komisar
May 16, 2007
Paul Hewson, known as Bono, the rock star, is complaining that the seven wealthy nations in the G-7 that had promised to double aid to the developing world by 2010, are more than half behind target. The countries are the United States, Britain, Canada, France, Germany, Italy, and Japan.
Bono‘s protest at a Berlin news conference Monday might be taken more seriously if he and his U2 band were not contributing to the system that deprives developing countries of far more than western aid – much of which has to be repaid.
Bono is a tax dodger. The Irish Bono ran his music publishing company in Ireland, where he and his partners took advantage of a law that exempted musicians and artists from taxes on royalties. To dodge taxes on non-royalty income, Bono‘s interests had the help of offshore nominee directors.
Bono gets no argument from George W. Bush, who has blocked mild European attempts to get tax havens to stop helping the wealthy hide incomes from taxes.
The Irish royalty exemption was begun to aid and reward creative artists, in hopes of encouraging the struggling kind, not to further enrich mega-millionaires like Bono. Last year, the law was changed. From 2007, artists who earn more than $625,450 must pay tax on half their creative income. It hardly seems a harsh measure.
Bono‘s Dublin company earned $110 million in 2005. Taking profits through the company rather than individually, Bono would have had to pay only 12.5 percent corporate tax, a rate still below that of the local bus conductor or plumber or school teacher.
But that apparently was too much for the man who has homes on the Irish Coast and in the South of France and New York City. So, last year, Bono moved the registration of his business to the Netherlands, where it will pay about 5 percent tax on royalties.
Maybe Ireland and the countries of the G-7 could provide more development aid if Bono and people like him didn‘t dodge their fair taxes.
What might the people in the countries he wants to help think about this? The same move your registration to the lowest tax rate system that Bono uses is employed by multinational corporations to dodge taxes worldwide.
Developing countries lose an estimated $500 billion every year as a result.
As Africa is the continent Bono expresses most concern about, he ought to listen to what the African Union says: Tax dodging by foreign companies costs it $150 billion a year – three times what it receives in aid.