Move to end tax breaks for Irish artists may spark exodus of mega-rich stars

Enjoying the perks while they last

The Irish artistic world has been galvanised by proposals to scrap the country's long-treasured tax breaks for artists, warning that such a move would spark a crisis.

A committee of the Irish parliament this week heard pleas for its continuation, its defenders arguing that its abolition would be disastrous for the thriving Irish arts scene.

The Irish Republic has long been intensely proud of the measure, dating back to the 1960s, that exempts from tax income by artists, writers, composers and sculptors from the sale of their works. It is said to have helped keep financially afloat struggling artists who might otherwise have been lost to the arts, while at the same time attracting creative people to the country.

The Irish Playwrights and Screenwriters Guild, putting the case for continuing subsidy, said: "Cultural expressions, including the arts, are the visible evidence of the soul of a society.

"Although Ireland is a small state it has a very strong identity as a society deeply committed to all forms of artistic expression - particularly in the literary arts, including those for film, television and the theatre.

"We are seen as a people who put a real value on the intangible storehouse of the imagination."

The country has changed immensely and become much more prosperous, so that in today's cash-rich Ireland some artists still languish in garrets but others lounge in penthouses.

This goes particularly for the booming music business with the emergence of international Irish superstars such as Bono and his band U2, the Corrs, Van Morrison and others who have all benefited from tax breaks.

A left-wing politician has referred scathingly to "the continuing scandal of millionaires and billionaires who are no doubt jetting off to their luxury hideaways in Bermuda, Monaco and other places this weekend".

Many others who would not be classed as being among the mega-rich have moved to Ireland. They include Irvine Welsh, author of Trainspotting, the BBC's John Simpson and Booker Prize winner DBC Pierre.

Some artistic immigrants have moved to Ireland for the financial benefits, while others came for other reasons and regard the tax break as a welcome bonus.

The scheme was the brainchild of former prime minister Charles Haughey. Although he is now regarded as corrupt and disgraced, this part of his legacy has always been regarded as a lasting success.

The exemption is one of a number of tax breaks that are now under review by the Irish government, and a decision on the issue may be made later this year.Already there is talk of a cap being placed on the exemption to curtail its benefits to the very well-off, but the political feat will be to put it in place without affecting those who continue to toil in garrets rather than in luxury.

There would also be a considerable stir if any official moves produced an artistic exodus. The tax break helped reverse the traditional pattern of Ireland losing many of its most creative artists, such as James Joyce, who moved for financial and other reasons. There is public resentment about tax breaks for millionaires, but at the same time some of the stars are highly popular. Bono, for instance, is held in high regard for his musical and other achievements, and there would be dismay if he should re-locate overseas.

He has already said he intends to stay, and has made the point that while his band's earnings from musical composition are tax-free, they pay "a lot of tax - enormous - millions of tax" on sales of CDs and earnings from touring.

The argument is made that today's big stars, even if they avoid paying some tax, enrich Ireland artistically and in terms of international profile, and in fact by their presence generate much ancillary economic activity. Whatever happens, there would be an outcry if the authorities pulled the plug on artists at the other end of the financial scale.

The statistics show the scheme cost €37m (£25m) in 2001, the last year for which figures are available; 1,300 applicants benefited, with the millionaires taking a large slice of this. But only 7 per cent earned more than €100,000 in that year, and the average income for more than 90 per cent of artists was below €11,000 - less than the average industrial wage.

A typical example of an artist benefiting from the tax break is Cora Cummins, a printmaker in Dublin who explained yesterday that about one-third of her income came from making limited-edition etchings.

The rest came from a teaching job, she said: "Anything I sell I don't pay tax on, though I pay commission to galleries. Doing away with the exemption would have a very negative effect. Prices would go up and we wouldn't sell as much. "

The Irish Arts Council is opposing either ending the scheme or imposing a cap.

* DBC PIERRE, aka Peter Finlay, whose initials stand for Dirty But Clean, moved to Ireland in 2000 to edit Vernon God Little, which won the 2003 Booker Prize.

* THE CORRS released their debut album Forgiven, not Forgotten in 1995 and haven't looked back. They have since sold 24 million albums worldwide.

* BONO formed U2 in October 1976 and originally called the band Feedback. He is a leading spokesman for eradicating global debt.

* JOHN SIMPSON, the BBC's foreign editor, spent seven years in Ireland as a tax exile. He returned to the UK recently. While there he wrote three books.