Every November 29, fans pause to remember George Harrison of The Beatles, who died in 2001. In addition to his sensitive lyrics, intricate melodies, and legendary chart-topping success Harrison should be remembered for another feat: He may have been the first singing supply-side economist.
In a 1969 interview with David Wigg, Harrison showed profound insight into how taxes discourage work and wealth creation. “The shy Beatle,” as he was known, said:
Britain in a way, you know, it cuts its own throat. Just from my experience of Britain. It's, you know, it's on every level, you know, from your tax right down into every little speck of business. The British government's policy seems to be, grab as much as you can now, because maybe it's only gonna last another six months. I know personally for me, there's no point in me going out and doing a job, doing a show, or doing a TV show or anything, you know. Because in Britain first of all they can't afford to pay you. And whatever they do pay you is taxed so highly that it ends up that you owe them money. So, you know, why bother working?
But if my tax is cut, then I'd do four times as much work; I'd make four times as much money. They'd take less tax, but they'd make more from me. But they cut their own throat. ... That’s Britain. Now in America … more things get done and, you know, it really pays.
Twenty-two years later when Pope John Paul II wrote in Centesimus Annus that “the Social Assistance State leads to a loss of human energies,” he and Harrison were singing off the same page.
The UK’s confiscatory taxes led Harrison to pen the bitingly satirical song “Taxman.” It would become the lead track on the 1966 album Revolver, the first LP to feature more than two songs written by Harrison. It was also the first song he described as “autobiographical.”
The song’s opening lyric – “Let me tell you how it will be / There's one for you, 19 for me” – was no poetic license. That was The Beatles’ tax bracket.
Then-UK Prime Minister Harold Wilson of the Labour Party introduced a 95 percent “supertax,” which applied to the four lads from Liverpool. “You are so happy that you’ve finally started earning money – and then you find out about tax,” Harrison recounted. “In those days we paid nineteen shillings and sixpence out of every pound (there were twenty shillings in the pound).”
Harrison did not come by his economic views from reading Hayek and Mises. He had clawed his way up from a life of poverty in working-class Liverpool to find the government trying to stall his escape.
“They’d been poor boys, who’d worked hard and made money, and now someone was trying to take it away,” according to their accountant, Harry Pinsker. Paul McCartney said the track embodied “George’s righteous indignation at the whole idea of having got here,” only to see the lion’s share of their earnings “removed by force.” Ringo Starr shared Harrison’s outrage that “[i]f we earn a million, then the government gets 90 per cent and we get 10,000.”
Their frustration came, not from the position of greedy stars trying to “hoard” their wealth, but disadvantaged youths struggling to escape poverty and desperation.
“Taxman” satirized the mindset of those committed to wealth redistribution: “Should five percent appear too small / Be thankful I don’t take it all.” It parodied UK taxes on sales, transit, even the death tax.
However, the song created some internal dissension, “Something” the band already had in surplus by 1966. John Lennon remembered that when Harrison “called to ask for help” with the lyrics, “I didn’t want to do it; I just sort of bit my tongue and said OK.” Reportedly, Lennon advised that the background singers mention “Mr. Wilson” and “Mr. Heath” (Conservative Party leader Edward Heath).
Despite their philosophical quarrels, the end result pleased almost everyone. Some music critics see “Taxman” as the beginning of the musical experimentation that would characterize the band’s later years. Its message remains so powerful that, to this day, some economics professors use its lyrics to teach the adverse impact of high marginal tax rates.
The UK learned from Harrison’s plea. Margaret Thatcher reduced the top tax rate to 40 percent, touching off a national economic renaissance. However, current Labour Party leader Jeremy Corbyn, and his top economic adviser John McDonnell, have proposed higher taxes and celebrated the postwar tax rates lambasted by Harrison, justifying the move as a way to help the poor.
“I would argue that taxation can be a vehicle for distribution for wealth. It can be a way of giving an opportunity to people,” Corbyn said.
George Harrison’s insightful comments should remind us that efforts to “soak the rich” only make the path from rags to riches slicker for society’s most vulnerable. And they discouraged one of the greatest musical geniuses of his time from producing four-times as many songs to add to his immense legacy.
Perhaps his sweet Lord saw that Harrison already had an embarrassment of riches.