http://www.nytimes.c...?pagewanted=print
What two of the other three Rolling Stones apparently learned, including Mick Jagger and Charlie Watts, was that Mr. RichardsÂs near-death experience meant that it was time to think about their heirs. For that, the aging rockers turned to a reclusive Dutch accountant, Johannes Favie, whose company, Promogroup, has helped them minimize their tax bills for more than 30 years. (The fourth Rolling Stone, Ron Wood, handles his finances apart from Promogroup.)
And so, last August, according to details disclosed in documents maintained by the Handelsregister, the trade registry of the Netherlands, Promogroup helped the three performers set up a pair of private Dutch foundations that will allow them to transfer assets tax-free to heirs when they die. Other Dutch shelters that Promogroup has arranged for the three have already paid off handsomely; over the last 20 years, according to Dutch documents, the three musicians have paid just $7.2 million in taxes on earnings of $450 million that they have channeled through Amsterdam  a tax rate of about 1.5 percent, well below the British rate of 40 percent.
[...]
According to documents from the Dutch trade registry, PromogroupÂs Mr. Favie, the principal director of the Stones holdings in the Netherlands, is now also the main director of U2 Ltd., the Dutch-based entity that holds the lucrative master tapes to U2Âs song library. Song catalogs typically account for a large portion of successful bandÂs royalty income, so U2 Ltd. is likely to be the recipient of a major piece of U2Âs income, analysts say. Likewise, U2Âs financial move to the Netherlands is likely to save it substantial sums it might otherwise have paid in royalty taxes.
Not everyone has access to Dutch shelters. Dutch tax benefits are typically available only to artists who are not citizens of the United States. While the Netherlands does not tax royalties going in or out of a Dutch company, the Treasury Department in the United States typically levies its standard corporate income tax rate of 35 percent on royalties coming into America from a Dutch entity.
Dutch holding companies set up to protect royalties often work in tandem with offshore Caribbean companies, shuffling money around to escape taxes, analysts say. For example, part of the Rolling Stones Dutch-run assets are funneled through the Netherlands Antilles, a Dutch protectorate and a classic Caribbean tax haven, according to company registration documents.
So, what's your answer, Beep? Should we cut income tax rates to 1.5% to match the Dutch tax shelters? If not, then what's the point of your proposal? They'll keep their money in their "expensive" post office boxes anyway - right? How is this not a "race to the bottom" if all that matters is the top marginal rate?
:-/
As Mike says, in the real world, it's impossible for a real country to compete with a post office box - tax-wise. The US recognizes this, and that's why we (and the UK and others) are cracking down on tax shelters, not trying to match them (even if it were a good idea - and it's not).
http://www.nytimes.c...iness/28gret.html
Now, Congress is attacking some of these schemes, courtesy of interesting provisions aimed at curbing tax avoidance that legislators wrote into the new jobs bill, known as the Hiring Incentives to Restore Employment Act.
The most substantive section of the bill states that foreign financial institutions will face a 30 percent tax on their United States investments if they refuse to disclose information about accounts they have opened for American citizens in offshore jurisdictions. Another aspect of the bill eliminates a clever derivatives strategy used by investors to make their tax bills on dividends disappear.
Cheers,
Scott.