Christopher Tolkien: kill HOBBIT film

[Knight of Gondor]

I'm disturbed by how many people have filed legal gripes against New Line. Extras and actors (there's a list on a thread somewhere in these hollows) filed suit, PJ was upset with them, and now Christopher Tolkien is upset. New Line had better clean up shop!

[Galin]

Mr. Hicklin (or anyone) do you know what the deal is with this 'tax bill'? I might have missed something, but I don't recall Hammond and Scull mentioning it.

The 'picture' (albeit general) that I get from Chronology is that Tolkien was in need of cash during the 'Zimmerman Days' due to retiring IIRC -- but later JRRT appears to leave the film stuff largely up to A&U, due to his earlier promise.

No?

[Sauron the White]

The tax liability incurred by JRRT is no different than the tax liability incurred by any other British citizen: the law is applied and he pays his determined share under the law. It is said that he needed money to pay his tax bill. We all need money to pay all of our bills - taxes are merely one of them.

In any case, the sale of film rights to UA was a decision made by a grown man of sound mind acting of his own free will.

[Galin]

I meant was this a specific bill that caused Tolkien to 'reluctantly' agree to sell the rights, as is implied in this excerpt from Timesonline (and elsewhere).

'... We all need money to pay all of our bills - taxes are merely one of them. In any case, the sale of film rights to UA was a decision made by a grown man of sound mind acting of his own free will.'

No one said otherwise. I'm looking to see if any tax bill was really part of the scenario here, as far as Tolkien's ultimate decision; especially as this story seems to give it prime importance.

[Sauron the White]

Yes, I do believe that was his stated motivation at the time.

[Galin]

Can anyone reference this statement please... I don't recall the source and don't remember it in H&S's Chronology (though perhaps I missed it there).

[Mithalwen]

Originally Posted by Sauron the White

The tax liability incurred by JRRT is no different than the tax liability incurred by any other British citizen: the law is applied and he pays his determined share under the law. It is said that he needed money to pay his tax bill. We all need money to pay all of our bills - taxes are merely one of them.

I don't think you appreciate the fiscal situation in UK the late sixties early seventies. This is from the HM Revenue & Customs website:

Special rates have been introduced twice within the post-war years, causing income tax in certain circumstances to exceed 100%.

In 1967-68, the special charge was imposed. ...over
£8,000, the rate was 45% which - with income tax at 41.25% and surtax at 50% - meant a total rate of 136.25%.

Even now the basic rule of taxation here is that if you become suddenly wealthy you will get clobbered because what we like to call "tax planning" and lay people call loopholes usaully require time to be efficient. Therefore those who have always have had money can plan to hand it on to the next generation as intact as possible through trusts, limited companies and offshore arrangements.

People who become unexpectedly wealthy in later life are liable to get squeezed until the pips squeak. When I was in private practice our wealthiest private client was worth over £6million. Our genius of a Tax manager managed to get that down to an "official" lsiting of £2million. There is one accountancy joke - "Q, What is 2+2? - A. What do you want it to be?"

Decisions may be different and less free when the determined share is one and a third.

[Sauron the White]

While not being a tax accountant or attorney, I do know this much: you never have to pay income tax unless you first generate the income. JRRT - God bless him - generated lots of income. He took the profit sharing checks and cashed them and spent them. And then the tax came due and surprise surprise - no money was left. I do not think he was all by himself in that line.

There is a certain conservative element in todays politics who bring up the word TAXES as if it is the filthiest profanity one can utter. They use it like a broadsword making you think they are wielding a weapon from God fighting against all types of sinful governmental behavior.

JRRT had to pay his taxes because of income earned from the books. He apparently did not put aside the money and instead had to generate new income so he sold the film rights. Thats the way life works - for him and the rest of us. At least he had some film rights to sell.

[Galin]

Originally Posted by Sauron the White

'... JRRT - God bless him - generated lots of income. He took the profit sharing checks and cashed them and spent them. And then the tax came due and surprise surprise - no money was left. I do not think he was all by himself in that line. (...) He apparently did not put aside the money and instead had to generate new income so he sold the film rights. Thats the way life works - for him and the rest of us. At least he had some film rights to sell.

How do we know what Tolkien did and did not do here, what he spent and so forth, or how he saved with respect to taxes in 1969?

The picture painted by the very detailed Chronology of H&S is that Tolkien made a deal with Stanley Unwin well before 1969. And in 1961 Rayner reminded Tolkien of the policy he had agreed to with Stanley Unwin: cash or Kudos (source Hammond and Scull) when Rembrandt Films became interested in cartoon films of the Hobbit. Tolkien wrote to Raynor:

'I clearly understand that one must either turn the matter down or put up with many objectionable things that they are sure to perpetrate in their production. I am sure advice or argument would be quite unavailing (except to make them throw the whole thing up) and I have no time for either. In any case I do not feel so deeply about The Hobbit; and anyway I am now mainly dependent for my support on my earnings as an author I feel justified in sinking my feelings in return for cash.' JRRT

In September 1967 Rayner Unwin sent Tolkien various letters from their American agent, a Mr. Swanson: 'Swanson has also written about an offer for film rights of the Lord of the Rings.' (H&S). In November, Rayner, having just returned from the United States, writes to Tolkien, stating that he thinks 'agreement is close with United Artists for the Lord of the Rings film rights.'

In 1969 (near the rumors of the Beatles and a film surfaced) Rayner Unwin again reminded Tolkien of their agreement (Hammond and Scull): that if a film brings cash, they will waive any kudos. He points out to Tolkien that whatever the film is like 'the book remains inviolable and that is the main thing. What they do with the property in other media will, I regret to say, be entirely their responsibility from an aesthetic point of view, will only vary in degrees between bad at best and execrable at the worst.'

OK, negotiations had begun in 1967. The implication I get is that the agreement in the 1950s was in play, and that A&U and Swanson were basically handling things; and the deal was finally ready in 1969. Of course I've read this before about the bill, and so it would seem to be true; but if so I would hope it has a fairly reliable source (and probably does).

I just want to know the source of this statement to see if it is true and to consider for myself its reliability -- Rayner Unwin? Joy Hill? Tolkien himself? some 'deduction' made by some lawyer?

[William Cloud Hicklin]

The tax bill story has been repeated often in the press- and although the press is notoriously unreliable on these things, I believe the tax bill line appeared in the very accurate story printed in 2001 in The Financial Times, which for the first time (TMK) gave the correct cash consideration and the fact that there were residuals.

The problem which afflicted Tolkien in the late 1960's was that the Ballantine paperbacks and ensuing Tolkien Craze generated royalties vastly beyond anything he had anticipated even in 1962- and *suddenly* exposed him to Surtax. (The Inland Revenue, at least back then, had a nasty habit of 'surprising' you with a bill- calculated on an accrual, not a cash, basis). There was also the fact that Tolkien had been forced in 1968 to make an unplanned move to Bournemouth and buy a very expensive house, which probably consumed most of his liquid cash.

[Mithalwen]

Originally Posted by Sauron the White

While not being a tax accountant or attorney, I do know this much: you never have to pay income tax unless you first generate the income. JRRT - God bless him - generated lots of income. He took the profit sharing checks and cashed them and spent them. And then the tax came due and surprise surprise - no money was left. I do not think he was all by himself in that line.

I think that you are missing the point that the tax rate was potentially over 100% ie he was expected to pay more than he had actually earnt. Which is not something most of us could cope with especially without the benefit of collateral.
. It isn't quite the same as me knowing that when I receive my dividends I should put aside 10-20% for the bill that will arrive at Christmas. He didn't just go mad at Blackwells or anywhere. This was a man who had worked hard and struggled to feed and educate his family, who lived in a modest house with very basic amenities in Oxford, hit by a punitive tax regime from a Labour Government that was actually socialist and was trying to redistribute wealth as well as shore up a dire economy. To make a man who lived as frugally as Tolkien seem a irresponsible spendthrift while wilfully ignoring the reality of the situation is neither fair nor charitable.

[Sauron the White]

from WCH

There was also the fact that Tolkien had been forced in 1968 to make an unplanned move to Bournemouth and buy a very expensive house, which probably consumed most of his liquid cash.

Carpenter says that JRRT and Edith decided to move for several reasons including to be with people of their own class. I find no evidence that Tolkien had been forced to do anything that he did not himself elect to do including use of that cash to buy what he wanted to buy instead of putting it aside for taxes.

This entire line of excuse - that JRRT was thrust into this terrible tight spot where he had to swallow hard, grit his teeth and give up his beloved baby to an evil government is a bit much.