We are responding to the Dec. 1 editorial headlined "Lewis honky-tonk tax cuts." The editorial implies that the "Songwriters Capital Gains Tax Equity Act" is some sort of special-interest legislation that is undeserved. Here are the facts and what every songwriter goes through:
Our profession's average annual income is below $5,000 per year. The federal government determines our maximum wage of 8.5 cents per song, per record, which we usually divide four ways with our co-writer and corporate music publisher to generally earn 2.175 cents every time a record is sold. We earn even less when a song is played on the radio and on top of all that, the federal government requires us to receive royalties immediately after collection. This means we earn virtually nothing for years, then on a successful song are thrust for one year into a tax bracket for rich people! No other authors in
Every day our work is being stolen -- 30 billion times in 2004 -- on the Internet. We have no company health insurance, pension or other benefits. Two-thirds of all American professional songwriters have lost their jobs in the last decade.
If you are one of the lucky few to write some hits, you can propose a joint-venture business partnership with a corporate music publisher. You will pay at least half of all the costs of getting your song ready to market. Demos run around $1,000 each, and if one out of 10 of those songs gets picked up by an artist, you're doing great, so you should demo a lot of them. Like some, you might want to lease your own office, build a studio in your home and hire someone to hit the streets to get those songs heard. You'll have to pay promotion costs to radio to get the song heard if one gets recorded.
After writing hundreds of songs and working for years to build your publishing company with your corporate partner, you each both decide to sell the business. Your corporate partner pays the capital gains tax rate of 15 percent. The songwriter-publisher will pay the top tax rate, somewhere north of 35 percent. Don't forget to add in 15 percent or more self-employment tax.
Rep. Ron Lewis thinks this is unfair. It is also important to note that nearly 10 percent of the entire Congress, Democrats and Republicans alike, co-sponsored this important legislation -- not just one
America's very first professional songwriter, Stephen Foster, who after visiting the commonwealth as a child wrote "My Old Kentucky Home," died, literally, with 39 cents in his pocket. These lawmakers know this is valid legislation that songwriters have deserved for decades. They just want to ensure that future Stephen Fosters are treated as well as corporations.
Member, the
RON HELLARD
JAMES DEAN HICKS
LISA PALAS
