The global rock star economy?

The late Michael Hutchence, of INXS fame. Photo: Reuters
The late Michael Hutchence, of INXS fame. Photo: Reuters
The Paradise Papers reveal the tension between rock stars and the tax man, writes Adam Behr.

''It's one for you, 19 for me'' ran George Harrison's scabrous jibe at the ''Taxman'' in 1966, a bitter riposte to the 95% supertax Prime Minister Harold Wilson's Labour government had imposed on the very wealthy.

Although top rates of tax are now substantially lower across the developed world (under 50% in the UK and Australia), it's hardly surprising the latest international tax avoidance scandal - the Paradise Papers - should feature rock stars in its cast.

The leaked papers reveal Michael Hutchence's estate tied up in offshore tax havens - to the possible exclusion of his surviving family. U2's Bono has also been found to have used a firm in Malta to pay for a share in a Lithuanian shopping mall.

While they're far from the only such cases, what distinguishes them in the public mind is the disjunction between public image and private affairs. These exposes throw into sharp relief the inconsistencies in romanticising rock. Free-sprited creativity is seen working hand-in-glove with the ''suits''.

Sex and drugs and rock and roll, following Ian Dury's coinage, might seem like a natural fit. Corporate-style tax avoidance and rock and roll less so. Rock has long railed against ''The Man'' on stage, but the current cases reveal a well-established and more specific hostility between stars and the taxman.

Tax 'Exile on Main Street'

The grubby, druggy aesthetic of the Rolling Stones' classic Exile on Main Street, recorded on the French Riviera, belied the fact the eponymous banishment was in fact the band fleeing a tax bill and liabilities as residents in the UK. Bill Wyman recalled: ''We owed money to the Inland Revenue. There was no way we could make enough money to get ourselves out of trouble; we'd be paying like 93% tax and there was no way we could earn enough to pay back what we owed.''

This decision was informed by the band's business manager, Prince Rupert Loewenstein. His financial stewardship helped to turn them into a global brand, not least through careful choices of touring, rehearsal and recording locations to minimise tax bills.

If these stratagems seem to cut across the ''devil may care'' rebellion or heartfelt sincerity of rock, they also reveal a paradox at its core as a mass-produced, commercial form of music that inherited an anti-establishment ideology from the folk movements of the 1940s and '50s.

The tension between ''art'' and ''commerce'' is woven throughout popular music. The brightest stars of the musical firmament have battalions of lawyers, managers and accountants to conduct their affairs.

There's a long and ignominious history of musicians falling prey to their business associates.

Sting's financial adviser, for instance, lost 4.8 million ($NZ9 million) on investments that included restaurants in Australia and plans to adapt Russian military planes into passenger liners. Billy Joel's former manager, likewise, lost millions on failed investments, and gave out loans of over $US2.5 million ($NZ3.6 million) to real estate and horse breeding enterprises. All without their clients' knowledge.

Bono has been caught in this paradox. Keen to put distance between himself and the mechanics of U2's business interests when challenged in 2015, he stated they were ''just some smart people we have ... trying to be sensible about the way we're taxed''. More recently, he expressed distress at the possibility that his investments have been ''anything less than exemplary''.

The business of authenticity

Given that such stars' appeal - and therefore partly their commercial success - resides in a sense of something beyond the sharp-edged logistics of the corporate world, it shouldn't be a shock that accusations of hypocrisy follow a whiff of chicanery around their business dealings.

Pop and rock, though, have been thoroughly tied up in the intricacies of international trade for decades, and the creative industries are increasingly important to governments' economic strategies.

The issue runs deeper than wealthy artists who make a play on their gritty roots, like the Arctic Monkeys being propelled to fame via trenchant observations of Sheffield street life and then taken to task over a previous tranche of tax revelations, which also included George Michael and Katie Melua.

The perception of authenticity at the heart of international stardom is rooted in the commonality that, at the end of the day, taxes exist to support. But sustaining it commercially involves traversing a web of jurisdictions. If these contradictions have been built into rock from the outset, perhaps a sense of betrayal was inevitable. The current travails over superstar taxes are unlikely to be the last.


- Adam Behr is lecturer in popular and contemporary music at Newcastle University.

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