A Tax on Our Sovereignty

at

kenny:cook

dan

From top: Taoiseach Enda Kenny with Apple CEO Tim Cook at Apple’s Cork last November; Dan Boyle

There is a difference between using something as an economic tool, and such tools becoming the very basis of our economy.

Dan Boyle writes:

So Cork has been added to the international tax tourism brouchures as the new go to destination. We’re on page three after Panama and Luxembourg.

As we speak creative copywriters are trying to come up an alliterative tag line to copperfasten our new found international status. I’m hoping they settle on ‘Capers’.

Here I should add the obvious caveat. Apple, as far as Cork and the Irish economy are concerned, is a good company. If it ceased to exist here, or if it contributes less than it has, the results would be catastrophic.

It can be argued that Apple and Ireland have been singled out together for pursuing the cynical and obscene logic of international corporate tax competition to its natural conclusion.

The European Commission, having no competence over our national sovereignty in tax setting or its collection, has used competition policy as something of a Trojan Horse to make its displeasure known.

Where there can be no argument is that multinational corporations, whoever they are, wherever and however they operate, must pay higher sums and more proportionate amounts of corporation tax. The questions that remain to argued are to whom such taxes should be paid and on what basis?

The awesome figures that have been talked about are strictly notional. It is an amount of money that is unlikely to ever be realised.

Years of litigation, regardless of the involvement or not of the Irish government, look set to follow. Part of this process will be dozens of other governments arguing that much of these profits have been made from within their jurisdictions, where no taxes have ever been paid.

If a windfall is to accrue to Ireland we need to be clear that such money should never be used for current expenditure. Windfalls should be invested in housing, public transport, renewable energy or education.

An alternative could be to establish a Citizens’ Dividend divided between each citizen resident in the State. The fund could be drawn down in certain life enhancing or emergency situations. It would be a tidy amount equivalent to twenty years of water charges!

The architecture of cross national corporate taxes is changing significantly and quickly. Ireland has barely stayed one step ahead of these changes. Transparency will be the byword.

We remain quite unprepared for this future world of corporate taxation.

That said there are valid reasons why Ireland has to engage in attracting investment through favourable tax differentials.

We are an island nation. We incur significant additional costs in sending our goods and services to the major population centres on the larger land masses throughout the Globe. We need to make use of different economic tools.

However there is a difference between using something as an economic tool, and such tools becoming the very basis of our economy. That has been where we have been going wrong. Very wrong.

Dan Boyle is a former Green Party TD and Senator. Follow Dan on Twitter: @sendboyle

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52 thoughts on “A Tax on Our Sovereignty”

  2. Clampers Outside!

    Clear, calm and no hyperbole….. where’s the “we” are all outraged claims… where’s the Willy Wonka analogies that make no sense…. where’s the claim that our politicians should be “outraged”… why aren’t you being suckered in to make comments on aul Noonan’s trademark quips….. comparisons of the tax laws to Shannon military stopovers…. where’s the emotion Dan, you’re not giving us enough sincere scattergun passion… your lack of outrage is outrageous!

    Thanks, keep it up

    4. MoyestWithExcitement

      “where’s the emotion Dan,”

      Here;
      “The European Commission, having no competence over our national sovereignty in tax setting or its collection, has used competition policy as something of a Trojan Horse to make its displeasure known.”

      And here;
      “The questions that remain to argued are to whom such taxes should be paid and on what basis?”

  5. fluffybiscuits

    “The European Commission, having no competence over our national sovereignty in tax setting or its collection, has used competition policy as something of a Trojan Horse to make its displeasure known.”

    Says the politico whose party crawled into bed with FF in the good times and took that cheap European money…

    I’d be more in favour of using the money to solve the housing crisis, we get to kill it off in one swoop…

    2. Kieran NYC

      5.5 billion is currently *being* invested in solving the housing problem.

      What you fail to grasp is that if we invest 13 or 130 billion it takes TIME.

  6. 15 cent

    our low rate of 12.5% is one thing. We’ve all more or less made our peace with that. BUT.. Apple didn’t pay 12.5% .. When it came to paying their taxes, and they submitted 0.05% .. why did no one pull them up on it? can only be because of a sweetheart deal, and i have to listen to Noonan lying about no deal being made.

    1. Kieran NYC

      Because we didn’t regard a lot of their income as our job/responsibility/right to tax, so we didn’t.

      The EC disagreed. So we’re now tax collectors for Europe.

      They would have paid the 12.5% on what we thought was ours to tax.

  7. nellyb

    “However there is a difference between using something as an economic tool, and such tools becoming the very basis of our economy.” – very apt, thank you Dan

    2. RiderOnTheStorm

      “We can evade reality, but we cannot evade the consequences of evading reality.” — Ayn Rand

  8. fluffybiscuits

    Broadsheet will be for me always a staple in my internet diet but between

    Dan Boyle
    LJG
    That former FF fella that gets a column
    Some of the cartoons which go above my head (and are closed to comment!)

    Could we just not scrap them?

    1. rotide

      I like dan and the former FF fella , balance is important.

      the cartoons are hit and miss, some I really like but you can at least scroll past them quickly unlike the 7 page research threads and the papers.

      less said about LJg the better

    2. Tony

      Dear Broadsheet,

      Stop posting some things that I don’t understand and some other things that I don’t like.

      Yours me-fully

      Fauntleroy McNotsobright

        1. Rob_G

          I think he is suggesting that it can be useful to engage with viewpoints that you don’t agree with occasionally, if only to get some perspective on the things that you do believe.

          (but a bit less polite, obvs)

      3. Anne

        Shut your eyes and pray they go away.. Or…. when you see the name, you could scroll fast and take a deep breath. Fridays are best avoided altogether.

  9. Sheik Yahbouti

    I am so heartened to hear that Ms Katharine Zappone has “grave misgivings” about the Apple situation. Does anyone suppose that she might be ‘reassured and comforted ‘ enough to support whatever the Government wish to do? I’m becoming an angry old party, driven to do something desperate.

    1. Rob_G

      ” I’m becoming an angry old party, driven to do something desperate.”

      – take a deep breath, step away from the computer, and take a stroll outside for a little while.

      1. Sheik Yahbouti

        Thanks for your concern, Rob. I have taken your advice. Certain people who may have otherwise been brutally murdered owe you a debt of gratitude.

  11. Coppélia

    Get Owen C on the case – an article addressing whether our tax (haven) policy only works in the context of the EU single market. A few graphs and reasoned anaylsis.

    2. Owen C

      To be clear, im not a tax expert. But the tax advantages don’t work because of the single market as far as i can tell, all else being equal. How else could places like Bermuda/Caymans utilise their tax benefits if that was the case? The tax advantages work because we are a member of the OECD (our tax system is trusted), we have a robust political and legal system (don’t laugh), and because we have multiple complex tax treaties in place with most of the other major nations of the world. However, our productions/sales advantages (which leverage off the tax policy) are obviously majorly supported by being in the single market.

  12. manonfire

    Owen isnt as prominent after it was shown that the EU brought down the house of cards with VAT receipts and the competition laws, the sovereign tax thing was a cute ruse to get the lisbon treaty over the line

    1. Owen C

      They went after Apple on competition grounds. Not sure where VAT receipts fit into it. The word VAT does not make it into the official EU Commission statement, for instance. Sales does, but only in so far as the calculation of revenue and its attribution to taxable profit.

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