Sunday night’s Grammy Awards ceremony illuminated two sides of today’s music industry. On stage, British soul singer Adele cleaned up big time, winning Album of the Year, Record of the Year, and Song of the Year. On the darker side, the night was filled with tributes to fallen angel Whitney Houston, who died Saturday after years of backstage struggles with drugs and alcohol.
When you think of your favorite musician, you probably don’t think about a third side — taxes. But you might be surprised to learn just how much influence tax laws have over the music we listen to every day.
Rock-and-roll fans know “Gimme Shelter” as one of the Rolling Stones’ all-time classics — the opening cut on their 1969 album Let it Bleed, and a dark, brooding meditation on the war and violence that seemed to characterize that era. Surprisingly, it turns out that “Gimme Shelter” describes the band’s philosophy on taxes, too.
The Stones’ troubles with the tax man go back nearly as far as their troubles with the police. Back in 1968, with bandmates Mick Jagger, Keith Richards, and Brian Jones facing drug charges, reports surfaced that they had also failed to observe tax laws. As Jagger reported at the time, “So after working for eight years I discovered at the end that nobody had ever paid my taxes and I owed a fortune. So then you have to leave the country. So I said &@#& it, and left the country.” The “World’s Greatest Rock and Roll Band” literally skipped town, with guitarist Richards renting the Villa Nellcote in Villefranche-sur-Mer on the French Cote D’Azur, where they wound up recording their critically-acclaimed double album, Exile on Main Street.
That lesson scarred them, and the Stones vowed not to repeat that mistake. Jagger put his London School of Economics studies to work, and hooked up with some top-notch financial advisors. They eventually set up a series of Dutch corporations and trusts which helped the band pay just 1.6% in tax over the last 20 years. More recently, they established a pair of private Dutch foundations to avoid estate taxes at their deaths.
“The whole business thing is predicated a lot on the tax laws,” guitarist Keith Richards told Fortune Magazine (with a Marlboro in one hand and a vodka and juice in the other). “It’s why we rehearse in Canada and not in the U.S. A lot of our astute moves have been basically keeping up with tax laws, where to go, where not to put it. Whether to sit on it or not. We left England because we’d be paying 98 cents on the dollar. We left, and they lost out. No taxes at all.” It’s worth mentioning at this point that Richards makes his primary residence in unglamorous but relatively low-taxed Weston, Connecticut.
The Rolling Stones were just the first of many artists to flee the United Kingdom to avoid taxes. Folk singer Cat Stevens left around the same time, moving first to Brazil, where his album Foreigner refers to his move. In 1978, rockers Pink Floyd spent three years outside the country to avoid tax. Glam-rocker David Bowie moved to Switzerland in 1976 (before becoming the first musician to securitize future royalties in the form of a bond offering). British singers Rod Stewart and Tom Jones both moved to Los Angeles to avoid British Prime Minister Harold Wilson’s 83% top tax rate. Even fictional musicians have taken extraordinary steps to avoid tax — in The Restaurant at the End of the Universe, British author Douglas Adams created the galactically-famous rocker Hotblack Desiato, who was “spending a year dead for tax purposes.”
Our job, of course, is to help you pay the minimum legal tax. And we think proactive planning beats fleeing the country. So call us when you’re ready to pay less. We’re here for you, and your bandmates too!
Donna Bordeaux, CPA with Calculated Moves
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.