Tax Exiles – Econlib

Cash

In 1973, Pink Floyd launched The Dark Side of the Moon which included the one ‘Cash,’ on which Roger Waters snarled: 

‘Cash,’ in accordance with one critic, “offers with crass materialism.” However by the point Pink Floyd recorded The Wall in 1979, they did so in France and the USA as a result of remaining in Britain would have incurred a large tax invoice. 

British revenue taxes post-1945

Hiked to 99.25% throughout World Warfare Two, Britain’s prime charge of revenue tax didn’t return to its pre-war degree when the battle ended, hovering round 90% by means of the Fifties and 60s. These charges have been a bane of Britain’s leisure trade. In ‘Taxman,’ launched in 1966, The Beatles sang:

“‘Taxman’ was after I first realized that though we had began incomes cash, we have been truly giving most of it away in taxes,” George Harrison wrote in 1980. “It was and continues to be typical.”

The Nineteen Seventies: The Age of the ‘Tax Exile’ 

In 1971, a Conservative authorities minimize the highest charge of tax on ‘earned’ revenue to 75% however a 15% surcharge on ‘unearned’ funding revenue stored the highest charge at 90%. 

The Rolling Stones had had sufficient and went to France to file Exile on Main Street. “[I]n these days, in England, the excessive tax charge was 90 %,” Mick Jagger defined:

In 1974, a Labour authorities hiked the highest charge on ‘earned’ revenue to 83% for a prime charge of 98%, the best everlasting charge for the reason that battle. 

Rod Stewart fumed:

He left for California in 1975 – his first subsequent LP was titled Atlantic Crossing – infuriating Elton John. “Spherical at his place one night,” Stewart wrote in his autobiography: 

The Stones and Stewart turned often called ‘Tax Exiles.’ They have been joined by others. Jethro Tull went to France, Marc Bolan to Switzerland, Tom Jones and Unhealthy Firm to California – lead singer Mick Ralphs citing “ridiculously excessive tax in England” – Ringo Starr to Monte Carlo, and Cat Stevens to Brazil. In 1978’s ‘Dead End Job,’ Sting sang “I don’t wanna be no tax exile.” He moved to Eire in 1980 the place musician’s royalty earnings have been exempted from revenue tax.

If, in lots of circumstances, exile marked a vertiginous decline within the high quality of the exile’s music, this wasn’t so in each case. David Bowie went to Switzerland the place, in accordance with his spouse, Angie, he obtained “an virtually ludicrously low tax charge of about 10 %.” “The Swiss take their residency necessities significantly,” she wrote:

This led Bowie to Berlin the place he recorded his basic trilogy of albums – Low, Heroes and Lodger – between 1977 and 1979. 

The Eighties: The top of the Tax Exiles

In 1980, Margaret Thatcher’s Conservatives minimize the highest charge of revenue tax to 60% and decreased it to 40% in 1988. The funding surcharge was abolished in 1985 and the period of the Tax Exile ended. 

A latest paper by economists Henrik Kleven, Camille Landais, Mathilde Muñoz, and Stefanie Stantcheva that: “overview[s] a rising empirical literature on the consequences of non-public taxation on the geographic mobility of individuals and talk about[es] its coverage implications” discovered that:

Extra particularly:

The period of the Tax Exiles illustrates that completely. “We left England as a result of we’d be paying 98 cents on the greenback,” Rolling Stone Keith Richards defined, “We left, and so they misplaced out. No taxes in any respect.”