Paul L. Caron
Dean




Tuesday, December 22, 2020

Bob Dylan’s Genius Was Rewarded By The Tax Code

Following up on my previous posts:

Washington Post op-ed:  Bob Dylan’s Genius Was Rewarded by the System — and the Tax Code, by Charles Lane:

[Bob Dylan] just sold the rights to “Blowin’ in the Wind” and 600 other songs to Universal Music Publishing Group for a reported $300 million. Added to his previously reported net worth of $200 million, the transaction implies that Dylan will reach his 80th birthday on May 24 as a half-billionaire.

This is a tribute to his genius and, on the whole, to a political and economic system that rewards artists whether they merely entertain multitudes — or inspire them to march against that same system.

Nevertheless, some socially conscious musician could write a song protesting the Dylan deal, because of what it reveals about that engine of irrationality and inequality known as the U.S. tax system.

A cardinal defect of the system is highly favorable treatment of capital gains relative to ordinary income. The top rate on the former stands at 20 percent; on the latter, it is 37 percent.

This is no simple twist of fate, but the result of long-term retreat from a 1986 tax reform bill that had equalized the rates at 28 percent. The 1986 bill did so on the sensible grounds that workers and capitalists both contribute to prosperity.

A Republican president, Ronald Reagan, signed it, but the ink was barely dry before GOP ideologues, committed to the notion that capital gains uniquely drive economic growth, began urging reinstatement of the differential. ...

[W]e have the obscure 2006 law known as the Songwriters Capital Gains Tax Equity Act, which permits songwriters — but not painters, video game makers or novelists — to treat the proceeds from selling their copyrights as capital gains, too.

American Thinker, The Taxes, They Are a-Changin':

I am not going to criticize Dylan for maximizing his financial position.  Most of us would do the same thing.  Nevertheless, it's hysterical to watch these people who publicly hate Trump prepare themselves against the left's upcoming tax increases.  It makes you wonder what he really meant when he sang:

Come writers and critics Who prophesize with your pen 
And keep your eyes wide 
The chance won't come again

Who would have guessed that Bob Dylan would take advantage of GOP tax laws?

(Hat Tip: Bill Turnier)

https://taxprof.typepad.com/taxprof_blog/2020/12/bob-dylans-genius-was-rewarded-by-the-tax-code.html

Celebrity Tax Lore, Tax, Tax News | Permalink

Comments

Everyone loves Dylan. But the copyright laws result in a very unfair allocation of income. If you support this much money going to one person, you can’t complain about Social Justice.

Posted by: Mike Livingston | Dec 23, 2020 3:32:43 AM