Sep 25 2013

U2’s Bono sticks up for economic illiteracy

Posted by: Nick Shaxson in: Thoughts

Something I’ve just written up for the Tax Justice Network:

Britain’s Observer newspaper is carrying an interview with U2’s frontman Bono, containing these pearls of wisdom:

“Q: The other persistent criticism is about the band’s decision to offshore part of their income through the Netherlands to avoid tax. Was it not hypocrisy for you to try to hold the Irish government to account for its spending while going through fairly exhaustive efforts to avoid paying into the Irish exchequer yourself?

Bono: It is not an intellectually rigorous position unless you understand that at the heart of the Irish economy has always been the philosophy of tax competitiveness. Tax competitiveness has taken our country out of poverty. People in the revenue accept that if you engage in that policy then some people are going to go out, and some people are coming in. It has been a successful policy. On the cranky left that is very annoying, I can see that. But tax competitiveness is why Ireland has stayed afloat. When the Germans tried to impose a different tax regime on the country in exchange for a bailout, the taoiseach said they would rather not have the bailout. So U2 is in total harmony with our government’s philosophy.”

Let’s get two things straight, Paul Hewson (for that is your real name.)

First. Repeat after us. Tax ‘competition’ bears absolutely no relation whatsoever to competition between firms in a market. As Martin Wolf has explained: “The notion of the competitiveness of countries, on the model of the competitiveness of companies, is nonsense.”

The word ‘competitive’ is a complete misnomer. Endless misguided government tax policies have hidden behind this weasel word – perhaps the worst of all weasel words in the entire tax lexicon. And as for the ‘Celtic Tiger’ – it would not have been possible without huge (tax-financed) subsidies from the European Union, and now that the Irish bubble has burst, that whole model isn’t looking so clever now.

Second. Tax competition is always, irredeemably noxious and harmful.  What is there to be proud of?

If you don’t believe us, read this. See if you can knock any of those arguments down.

As the entertainer Graham Norton so memorably put it, in response to news of U2’s tax dodging strategy:

“Tarmac the road outside your house, tightwad!”

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