I really think that this song is about taxes and believe me, U2 cares!!! In 2006 the Irish government decided to limit tax free earnings on artistic royalties to €250,000 ($338K US). This would have caused a huge tax bill for the band so they decided to move some of their business to the Netherlands which is considered to be one of the most tax favorable countries in the world.
According to Billboard, U2’s 2009-2011 tour grossed around $736 million. It is estimated that the total net worth of the band is over $800 million. So, you can imagine their tax savings by leaving Ireland and its 12.5% tax on royalties for the Dutch tax rate of 5%.
U2 has received a lot of bad press for this move since critics believe that it is totally hypocritical to their human rights activism. I’ll let the philosophers debate the ethical issues. I can say that what they did is perfectly legal and the band still pays close to half of their income in various taxes.
It is October…Do you care? What’s the moral of this story? Good tax planning saves money! It doesn’t need to be complicated and you won’t have to go to Holland. Sometimes simply taking a look at your situation before the year is over can save you money.
Now is a great time to plan for the end of the year. If you would like to discuss your tax planning please call me.
