No beautiful day as Burton and Bono fall out over tax

WHILE Joan Burton is right to highlight U2’s hypocrisy on tax avoidance, the band could easily point the finger back saying: “Well, look at you, too.”

Ireland’s entire economic recovery drive is underpinned by the concept of attracting tax avoiders to this country via the enticingly low 12.5% corporate rate. So the Government is being as hypocritical as Bono & Co when Ministers condemn the country’s most globally recognisable cultural brand for taking advantage of overseas financial incentives to get even richer.

Having done nothing interesting musically for the best part of a decade the band look doomed to slip into the status of a heritage act living off its luminous back catalogue displayed in spectacular live tours.

This has left Bono as a high profile, incredibly wealthy — and incredibly effective — anti-poverty campaigner, which is where the hypocrisy comes in.

While it is laudable to personally lobby world leaders to achieve the United Nations drive to devote 0.7% of gross domestic product to overseas aid, Bono somewhat undermines his argument at home by shifting a substantial chunk of U2 Inc to the Netherlands for tax reasons.

Wouldn’t Irish GDP be just that little bit bigger if the group’s publishing arm had stayed here, thus boosting the tax base, thus boosting Irish overseas aid?

The band’s rather weak excuse for heading to Holland — because it is a global business that pays global taxes — is let down by the fact this financial flight from Ireland only occurred after the tax exemption for artists introduced by former Taoiseach Charles Haughey was capped at €250,000 — very small change for the Beautiful (Pay) Day boys.

Despite tax justice campaigners condemning the U2 off-shore transfer since it happened in 2006, Social Protection Minister Ms Burton is the first Cabinet minister to name it as part of a wider “scandal”.

Ms Burton said there were reports of multinationals accessing schemes in the Netherlands in order to enjoy effective tax rates of between 0%-4% as she hit out at companies not paying their fair share to help fund public services in Ireland.

“That’s not acceptable if a huge amount of personal wealth and corporate earnings and corporate profits are diverted in a way in which they make little effective contribution.

“The well-known example, U2, moved quite an element of its activities through the Netherlands because clearly whatever the Netherlands was doing was far more attractive in tax terms for their companies and for their organisations than the quite generous arrangements that Ireland has traditionally had in the area,” the minister said.

While Bono vs Burton may be his first scrap on home turf, the U2 singer has come under political fire before, especially over his close association with then US president George Bush.

But that relationship worked remarkably well, especially in the massive — and unexpected — investment the Bush administration put into combating HIV/Aids in Africa. But Bono learned that political vengeance is most forceful when it is sudden and unexpected after becoming tangled-up with David Cameron’s British Conservatives in 2009.

The U2 front man instantaneously became a villain across the blogosphere and social networking sites for his decision to act as warm-up artist for Cameron’s address to his party conference that year.

The tag “BonoToryScum” soon caught on across Twitter with comments such as “Look out for U2’s new single ‘Where The Streets Have No Low Income Housing.’”

Bono was, of course, doing his video speech in praise of charity, and had done a similar gig at Gordon Brown’s conference a few days previously, but Labour had at least delivered on overseas aid, while the Tories had a very bad reputation, especially after one Conservative minister notoriously referred to Africa as “Bongo-Bongo Land”.

But Cameron was in the process of rebranding his party at the time and in his “hugging H’s” phase — Hug a Huskie (he went to the Arctic to prove how green he was); Hug a Hoodie (he said “the kids” needed more understanding); and Hug a Homo (supporting extending marriage rights to same sex couples), and Bono took a punt on him.

Sadly, “rebranding” in the Tory sense was largely just another word for “lying”, and while Cameron pledged to ring-fence overseas aid, it has now been revealed swathes of it have be siphoned-off to fund the British armed forces.

But at least Bono tried — it is just a shame he did not try as hard to keep all his tax base in Ireland.

Tax avoidance became a massive political issue in Britain last year when it emerged multinationals were paying zero tax on billion pound turnovers due to clever accounting.

The kind of accounting that helps corporate giants place their European HQs in Dublin, that is.

But, time is running out on that little tax trick as the rapid move to fiscal union across the eurozone must bring with it tax harmonisation and the loss of Ireland’s lure to foreign tax avoiders.

Ms Burton cited the example of Starbucks which was shamed into giving the British state €23m after a consumer boycott took fire when it was revealed the company paid virtually no tax for two years.

Luckily for Bono & Co, U2 no longer sell enough records to make a similar people’s power backlash work on this side of the Irish Sea.

But maybe Joano and Bono can sort it all out and stop U2 and the Labour Party declining further into heritage acts — Ms Burton would dearly love to be the lead singer in her band, after all.

And, like God, Bono does move in mysterious ways — though, as we all know, God is merely Bono’s representative in heaven.