DUBLIN — The Irish seem to take a wicked pleasure in tearing down those among them who reach the heights of fame. It’s called begrudgery.
Bono is getting a taste of it. The U2 lead singer has been getting a lot of hits — not of the musical kind — from fellow citizens of late over taxes.
And they have hurt. The singer admitted last week to being “stung” by accusations of hypocrisy for moving part of U2’s business out of Ireland to take advantage of lower tax rates, while urging first-world governments, including Ireland, to increase aid to combat poverty.
Bono has arguably done more than any individual this century to prick the conscience of world leaders, including George W. Bush, about debt and poverty in Africa.
At Davos last year he was applauded during a seminar with Al Gore when he described as a “scandal” the failure of the industrialized nations to fulfill the Millennium Goals for the developing world.
He is the most famous Irishman alive, and has helped create an image of a caring nation whose rock stars do not trash hotel bedrooms.
Unlike some Irish multi-millionaires domiciled in tax havens, the 48-year-old celebrity is true to his Irish roots and lives in Killiney south of Dublin.
Financially the accounting move makes perfect sense.
Up until 2006, U2 paid no tax in Ireland on artistic earnings, under an exemption scheme designed to persuade writers, musicians and movie stars to make their homes in Ireland.
When the tax-free income was then capped at 250,000 euros ($315,000), the band moved its accounts to the Netherlands, rather than face a multi-million euro tax bill for album sales and royalties.
Like it or not, the move has undermined Bono’s reputation for doing good, especially in recession-hit Ireland where there is lately much anger over tax avoidance by the rich.
The Irish release last week of U2’s latest album, "No Line on the Horizon," became the occasion for renewed baiting of the rock star and criticism of his role as a celebrity politician. (The album was released in the U.S. on March 3.)
One of the placards carried at a 100,000-strong trade union march in Dublin read, “Make Bono Pay Tax.”
At a picket outside Dublin’s finance ministry, mounted by a global justice group called Debt and Development Coalition Ireland, a Bono impersonator, Paul O’Toole, mocked some of U2’s famous lyrics.
He sang to an audience of press photographers, “I want to run, my money to hide … where the accounts have no names ... . ‘Cause I still haven’t learned, about democracy.”
Nessa Ni Chasaide of the coalition said U2’s decision “is depriving the Irish government of revenue that we need to pay for social services and development aid to impoverished countries.”
U2 is only one of some 12,000 companies known as Special Financial Institutions that route cash flows through the Netherlands for tax reasons.
These include IKEA, Volkswagen, Gucci and Prada, according to the Dutch watchdog organization SOMO, which maintains that important tax revenues could otherwise be used to combat poverty and stimulate development.
Bono sees irony in the criticism he has received, because Ireland has been doing the same as the Netherlands by lowering its corporate tax rates to lure international investment in financial services.
The Irish government has created, as he described it, a “financial architecture” that brings billions of dollars every year directly to the exchequer.
“What’s actually hypocritical is the idea that then you couldn’t use a financial services centre in Holland,” he told The Irish Times. “We pay millions and millions of dollars in tax. The thing that stung us was the accusation of hypocrisy for my work as an activist.”
U2’s guitarist, The Edge, protested that the band’s tax affairs were private, adding, “We do business all over the world, we pay taxes all over the world and we are totally tax compliant.”
It might be more troubling for Bono and The Edge that U2’s first album in five years has got mixed reviews.
Rolling Stone raved about "No Line on the Horizon," but Time magazine judged it to be “unsatisfying” and speculated that the great band’s horizon “has never looked closer.”
CD sales have been disappointing, mainly because of illegal downloads, and the first single on the album, "Get on Your Boots," did not make the top 10 in the U.K. charts.
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