For the 99.5%.

A funny thing happened on the way to President Biden’s inauguration. What had been a trickle in the few years before the election became a flood after November 2020.[1]  Famous artists started selling their song catalogs. Bob Dylan sold his songs for a reported $300,000,000. He was not the first to do so.  Paul Simon,  Blondie, Shakira, Barry Manilow, Neil Young, Chrissie Hynde, and many other notables of the music world have sold their publishing rights for millions of dollars.


A website frequented by the rich and famous, Celebrity Net Worth,[2] tells us that “[p]erhaps the most intriguing reason musicians may sell their catalogs: they’re privy to a special tax rate on self-created works. Musicians owe 20 percent in capital gains tax rates on their music. That includes album sales, streaming, licensing, and any other royalty income. If they had to pay ordinary tax rates, a musician could be taxed up to 37 percent on their earnings. ” While this does not tell the complete and accurate factors involved, it is certainly a reason why the recent popularity in selling song catalogs. For example, with interest rates at historic lows, professionals in the music industry saw an opportunity that not only benefited the artists but also provided a leveraged income stream for many years to come that would vastly outweigh the purchase price. Hence, the rise of companies like Primary Wave and Hipgnosis Songs.

Why now?

Perhaps the times they are a-changin, and perhaps the tax benefits given to artists will soon disappear.  Bernie Sanders, the senator from Vermont, recently introduced his “For the 99.5% Act” in the Senate. [3] A concise overview of the proposal can be found at the website of Wealth Management. Com.[4]  The proposal includes federal estate tax rate increases to 45% for estates over $3.5 million with further increased rates up to 65% for estates over $1 billion. The basic exclusion amount will be a $3.5 million estate tax exemption and a $1 million lifetime exemption for gifts. The basic exclusion amount will be a $3.5 million estate tax exemption and a $1 million lifetime exemption for gifts. But so what? The current law was scheduled to sunset in 2025 anyway and few expected the rates to remain as they are now. One thing is certainly blowin’ in the wind, the capital gains tax is likely to increase and artists are taking advantage of the current law now.

The article from Wealth Management lists some planning strategies in light of possible changes in the law.[5] They are worth reviewing .


Will the most radical of Sen. Sanders’ proposals be enacted into law? Most professionals do not believe so. But then again, who knows? Even President Biden has proposed imposing a top long-term capital gains tax rate of 39.6%. We all remember what the poet sang:

Come writers and critics

Who prophesize with your pen

And keep your eyes wide

The chance won’t come again

And don’t speak too soon

For the wheel’s still in spin

And there’s no tellin’ who

That it’s namin’


[1] Tell me that you’ve ever seen Rolling Stone quoted in a Trusts and Estates blog?




[5] Obvious disclaimer, this is not offered as legal advice, nor is it intended to be relied upon by readers. If you find yourself in the 0.5% targeted by Sen. Sanders then congratulations on your great success and start seeking advice soon.