By Sam Brunson
I listened to Nelly’s “Hot in Herre” last night. And I’m not alone—apparently, over the last couple days, Nelly’s Spotify streams have tripled as compared with the week before.
Why? Taxes, of course.
Apparently, Nelly has joined the storied ranks of popular entertainers who don’t pay their taxes. (See also Willie Nelson, Lauryn Hill, MC Hammer, and Jerry Lee Lewis, among others.[fn1])
On Sunday, TMZ reported[fn2] that a $2,412,283 tax lien has attached to Nelly’s property. Now, $2.4 million is a lot of money; how is Nelly going to pay it?
Brian Josephs, a reporter at Spin, had a clever idea: if fans streamed “Hot in Herre” enough times, Nelly would have the money to pay his tax debts. Because Spotify pays artists royalties of between $0.006 and $0.0084 per song streamed, Josephs calculated that fans would have to stream “Hot in Herre” between about 287 million and 402 million times for Nelly to pay off his debt.[fn3]
And the idea has taken off; not only are people listening to Nelly again, but he’s even the subject of a hashtag: #SaveNelly.
The problem is, the number of listens is significantly off. (And not just because Josephs assumes—explicitly—that the record company doesn’t take its share of royalties.)
See, royalties are taxable income to Nelly. In fact, they’re explicitly listed in section 61(a)(6). So Nelly will have to pay taxes on the revenue he receives from the #SaveNelly campaign; assuming the campaign is even partially successful, he’ll be in the highest marginal tax bracket. So how many streams will fans actually have to listen to?
Pretty much everything I know about Nelly is either from the news about his tax lien or from this Wikipedia article, so I don’t really know much about his specific tax situation. As best I can tell, he’s not married; as an unmarried taxpayer, Nelly hits the top marginal rate of 39.6% on any income in excess of $415,050.
To have $2.4 million after taxes, Nelly needs to earn about $6,171,237 pre-tax.[fn4] That means we have to listen to “Hot In Herre” between 735 million and 1 billion times. Note that I’m totally ignoring the interest and, probably, penalties that are accruing on his tax liability by the day—the longer it takes us to #SaveNelly, the more listening we have to do.
So I don’t know what anybody’s doing still reading this. If we want to #SaveNelly, we need to play “Hot in Herre.” Stat.
(And, with any luck at all, this will inspire Nelly to write a tax song to add to the canon.)
[fn1] Seriously, based on a handful of Google searches, this whole post could be nothing but a list of musicians who didn’t pay their taxes. Musicians. If I added actors and other entertainers, it could get really long.
[fn2] (Those are two words I never expected to type. Credit where credit is due, though: TMZ may have broken the story, but I heard about it when it trickled down to NPR.)
[fn3] At 3 minutes, 48 seconds, that means collectively, people would have to listen to “Hot in Herre” for somewhere between 2,076 and 2,907 years.
[fn4] I’m simplifying a little here. Among other things, I’m assuming the #SaveNelly income is the only income he earns; if he has other income, that starts to push more of his #SaveNelly income into the 39.6% bracket (meaning he has to earn more money pre-tax to be left with $2.4 million after taxes). I’m pretending he doesn’t itemize, but then I’m also ignoring his $6,300 standard deduction. His personal exemption, on the other hand, is totally phased out. I’m also totally ignoring state and local taxes.