Bono, U2 and Supply Side Economics

Bono has just taught the world a lesson.

With all the press attention given to the U2 lead singer’s humanitarian lobbying efforts to fight poverty and disease in the Third World, you might think his global instruction was about altruism.

Not this time. Instead by his actions Bono has revealed what he really feels about taxes. He has also demonstrated how dramatically one’s behavior can be affected when the issue becomes personal.

The rocker and his U2 band have moved their business empire from Ireland to Holland to avoid paying the new high tax rates, which have been imposed by the Irish government on music royalties.

If Bono, whose estimated worth is said to be in excess of $700 million dollars, wants to save on his tax bill, that’s understandable. The problem is that this is the same guy who has consistently urged the U.S. government to use its own citizen’s tax dollars to finance other nation’s social programs and forgive Third World countries’ debts.

Typically, when money from the United States has been doled out in the past to developing nations, the track record of appropriate application has been appalling, with the exception of some minute amounts of money that have actually been used to accomplish original objectives. In some cases, corrupt dictators have actually robbed the charity piggy banks and/or squandered their contents.

In an interview with the UK Daily Mirror, British television talk show host Graham Norton launched a harangue against the Irish rocker for his apparent hypocrisy.

“People like Bono really annoy me,” Norton said. “He goes to hell and back to avoid paying tax. He has a special accountant. He works out Irish tax loopholes. And then he’s asking me to buy a well for an African village.”

Norton has his own hefty tax bill to pay, thanks to a new multimillion-dollar deal he just signed with the BBC. He has a couple of suggestions for projects that Bono could effectuate in his own homeland.

“Tarmac the road outside your house, you tight-wad! Or pay for a school in Ireland,” Norton remarked. “I’ve never met Bono and now I probably never will. But if I do meet him I’ll ask him because I think it’s a hard thing to justify.”

Even Labor Party finance spokesperson Joan Burton chimed in. She told the Guardian, “Having listened to Bono on the necessity for the Irish government to give more money to Ireland Aid…I am surprised that U2 are not prepared to contribute to the exchequer on a fair basis along with the bulk of Irish taxpayers.”

What Bono and U2 have done is what businesses always do when faced with excessive taxes—seek jurisdictions with low, or better yet, no taxes.

Governments always need more money, and the easy answer for generating revenue is to hike tax rates. But as sure as water flows downhill, individuals, and the businesses they own, will leave the tax-hiking jurisdiction for more friendly terrain, taking their revenue right along with them.

Another Bono lesson for Ireland and other nation states: If the Emerald Isle hadn’t tinkered with its tax law, Bono, U2 and other businesses like them would still be providing jobs, opportunity and yes, revenue.