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InsiderOnline Blog: April 2011

Soaking the Rich Robs the Rest of Us, Too

Did you know that one consequence of Britain’s soak-the-rich tax policy was the break up of the Beatles? George Cassidy has the story:

[I]n his famous 1966 song “Taxman,” George Harrison, singing in the guise of a sardonic tax collector, warns listeners that he will keep 19 of every 20 pounds they earn … “Taxman” was inspired by the fact that during their heyday, the Beatles were subject to the super tax, meaning that their earnings were taxed at marginal rates of up to 95 percent. …

In 1967, the Beatles were informed that they would need to invest the large pile of cash they had amassed if they wished to avoid a major haircut from Her Majesty’s tax collectors. In late 1967 and early 1968, the Beatles duly started the ill-starred Apple group of companies — Apple Records, Apple Electronics, Apple Films, Apple Publishing, and the Apple Boutique.

Most of the companies under the Apple umbrella began losing money extravagantly and quickly. …  John Lennon, after fearing publicly that he would be broke in another six months, brought in Allen Klein, a divisive figure who affected a gangster’s air of bluntness, to take an axe to the Apple tree. Over McCartney’s objections — he was outvoted 3 to 1 — Klein began to manage the Beatles’ affairs.

Klein was on a collision course with McCartney from day one. Klein’s laser focus on money often slighted artistic goals — witness the doctored Let It Be tapes, released without McCartney’s consent. McCartney, finding the prospect of continuing with Klein unacceptable, ultimately enraged the other Beatles by suing them to dissolve their partnership in 1970.

… [N]o super tax, no Apple fiasco. No Apple fiasco, no Allen Klein. No Allen Klein, no lawsuit. [“What the Taxman Wrought,” National Review, April 15, 2011.]

Posted on 04/20/11 05:10 PM by Alex Adrianson

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