Tuesday, September 15, 2009

Did Taxes Killed the Beatles?

The Beatles are in the news (again). On 9.9.09 their Rock Band game was issued and the 40th anniversary of their break-up is approaching. In a new article, Daniel Finkelstein discusses the Beatles as a "triumph of capitalism." He argues that Brian Epstein's management of the band, and particularly the management of how and when the Beatles name was used in association with a product, made the band a huge commercial success.

After Epstein's death in 1967, many believe the band started on the road towards their break-up fueled by disagreements on management and financial issues. One way in which the financial stress of the Beatles was magnified was by the existing tax system. Quoting Finkeslstein (who is paraphrasing Tony Bramwell):

Bramwell was friends with all the group, present when Paul met John; he was Brian Epstein’s right-hand man, fixing gigs for Jimi Hendrix and mixing drinks with the Rolling Stones; and was still there when Phil Spector produced Let It Be. In his recent book Magical Mystery Tours (a wonderful insider memoir) Bramwell argues that it was penal tax rates that helped to destroy the group’s cohesion.

First told to give away vast amounts to avoid tax bills — which they did in a series of madcap ventures, offering money to any old person who dropped by with a demo tape — then told they had to make £120,000 in order to keep just £10,000. Soon their finances were in chaos and their energy sapped, as nutters beseiged Apple HQ pressing tapes on them. They also ran a clothes shop as a tax dodge.

Bramwell blames Harold Wilson, the Prime Minister, directly. “There were enough new regulations and red tape to tie up free enterprise for years ... One minute Swinging London was like a giant theme park, the envy of the world, then they — Wilson and his gang — closed it down. It was as if they went out and stamped on it.”

The following video provides a re-enactment (sort of) of Bramwell's account of the band

For the record, and given my last post, I'm not a Beatles fan.

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