When the Rolling Stones Hit the Laffer Curve

Michelle V. Agins/The New York Time

An interview with the Rolling Stones reveals some of their business and wealth-protection strategies. “The whole business thing is predicated a lot on the tax laws,” said Keith Richards. “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. [This may sound like an exaggeration, but likely isn't.] We left, and they lost out. No taxes at all. I don’t want to screw anybody out of anything, least of all the governments that I work with. We put 30% in holding until we sort it out.”

The story of the Stones’ flight from Britain because of taxes is told a bit more fully in the recent documentary Stones in Exile, which was quite good. (Shine a Light, meanwhile, was a disappointment.)

As much as I love Keith Richards – am reading his memoir Life, and loving it as much as the critics – the likelihood is that his bandmate Mick Jagger is more responsible for the band’s business strategies. He is, as we put it earlier here, a true profit maximizer.

(HT: Greg Mankiw) [%comments]

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  1. Tim says:

    @Mike B -

    So the super rich represent the “majority of taxpayers” now?
    And corporations don’t need to take up a “nomadic lifestyle” to lose ties with one countries tax rate (see Google and their 2% tax rate).

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  2. Penny says:

    Mike, I fear you’re hallucinating. I don’t know of any Republicans talking of leaving the country. Some Hollywood Liberals talked about that, but unfortunately stayed here.

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  3. Clancy says:

    I could believe that a 98% marginal tax rate is past the peak of the Laffer curve. What I don’t believe is people who think 35% is past the Laffer peak.

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  4. Bobby G says:

    Actually Penny (#10), a lot of our tax policy makes me want to leave the country. I’m not even kidding.

    Every time a rich person leaves the US, the burden of our crazy spending weighs even more heavily on those who stay, since they now have to pick up the same tab but with less help. This additional burden encourages those who are still around to leave even more… it’s a vicious cycle, and it’s pretty rational.

    Shouldn’t our tax policy try to *bring in* the best and brightest, not make them want to leave? Instead we’re all about protecting the unfortunate at the expense of the successful. Sorry if this sounds cold but that’s not a way to cause economic growth. Sure some of the people receiving aid can get back on their feet and help the economy, but that’s always costing taxpayers the same if not more $ to get them back on track… and most of the time the aid money doesn’t produce anything of economic value. It’s either a tie or a loss.

    Rant over. I am going to go order Stones in Exile now.

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  5. Joris says:

    What is interesting to point out is that a lot of big artists, like the Rolling Stones and U2, have their holding companies based in Amsterdam (I believe the Rolling Stones are based there since 1971), because the Dutch government doesn’t charge a tax on royalties. So in effect, they only have to pay 1.6 % of their revenue in taxes.

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  6. bob says:

    This discussion is hilarious. Do conservatives really believe that the rich should be taxed at a lower rate just to keep them in the country?

    Listen, we’ve seen what happens when you cut taxes. Massive jumps in debt (both in aggregate and as a percentage of GDP). That is not a sustainable solution. Supply side economics simply transfer public wealth to the wealthy.

    We are currently feeling the results of tax breaks. As the wealth of the rich went up, there simply weren’t enough safe places to extend credit. The result is riskier loans. With cheaper credit, everyone started borrowing and buying houses. With everyone buying the prices went up. It turns out, not everyone could afford the loans.

    It turns out you can only squeeze so much out of the bottom 95%.

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  7. Alex says:

    Two corrections:

    1. This is not a “recent” article – it was from 2002. (The article talks about the 40 Licks album “coming soon”).

    2.. It isn’t from Rolling Stone magazine, it is from Fortune.com (see the very bottom of the article).

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  8. Sbard says:

    @#6: It’s probably more that it’s much easier to live a nomadic life in this day and age when air travel is cheaper and the internet makes it much easier to keep connected with the people you’ve left behind. That having been said, you can’t really live that kind of life easily unless you’re pretty rich and successful.

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