Eamonn Kelly: Multinational Tax And Independence

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From top: Apple CEO Tim Cook received an award at an IDA Ireland event in the National Concert Hall last January to mark Apple’s 40 years in Ireland, watched by then Taoiseach Leo Varadkar (left); Eamonn Kelly

Leo Varadkar’s comments in yesterday’s Business Post about taxing the multinationals brought into focus Ireland’s dependent relationship with the multinationals.

While it is generally agreed that the multinationals are important to the Irish economy, the suggestion that they should be entirely tax free speaks volumes about Irish dependency. Because in that relationship with the multinationals there is the sense of being minded, like children.

Independence

From that idea arises two further ideas. One, that we might have been far better off staying with Britain, since we obviously need an external authority to make things happen for us; and two, that in our dependent relationship with multinationals we can only ever be workers, giving our time and energies for the interests of others, who will export the profits and give us the occasional pat on the head.

Figuratively speaking it’s like we’re still serving the big house, it’s just a different big house.

Implicit in this dependent relationship is the idea that local businesses will never get into a position to compete.

In David McWilliams most recent Irish Times article “Why an Irish mortgage costs 80k more than a German one” he showed how Irish banks actually penalise Irish businesses by refusing to pass on lower EU interest rates to Irish businesses.

Alongside this unfair trading sits a kind of national inferiority complex where confidence is always low in the Irish themselves. I once knew a German woman who went to FAS seeking grant assistance and, as she said herself, once they heard she was German “All the doors opened”. Irish people at that time couldn’t even get a pat on the head from them.

Meanwhile, over on Twitter, banking whistleblower Jonathan Sugarman reminded Varadkar that if his government hadn’t spent over €8 million defending Apple’s right to withhold due taxes, that we would have plenty of ICU places to deal with the pandemic.

But Irish people aren’t the priority, except insofar as they might occupy promised multinational jobs at some point in the future.

Dependency

The ongoing dependency on the multinationals may actually go right to the heart of the meaning of democracy. Because in such a dependent relationship, our government often seem more like a managerial class working towards the interests of the multinationals.

The core idea of the relationship is based largely on the understandings of trickle-down economics, in that the multinationals will set up base here and provide jobs and presto! Everybody wins.

However, while this arrangement was progressive in the early 1960s, the ongoing effect has been arguably detrimental to Ireland’s sense of independence, and may simply be serving to postpone the cultural need to pose important questions in relation to post-colonialism and the meaning of independence.

The ongoing dependence on the multinationals may have had the effect of prolonging a kind of cultural learned helplessness, a dependence on greater powers, leaving Ireland stunted and ineffectual.

This ineffectual dependence was perhaps best exemplified in that embarrassing photo of Enda Kenny, the then taoiseach, being patted on the head by Nicolas Sarkozy.

This is where dependence has taken us. Lost children on the world stage.

So, while the multinationals walk away tax free and generously grant-aided, we feed off one another, the banks crippling Irish local businesses before they can get going; the service providers hammering the consumer for basics; while the main political parties surreptitiously privatise national assets, kindly divvying out opportunities for profit to foreign investors.

Condescension

In this ongoing dependent scenario, the people become a kind of servant class on the one hand, and a meek collective of exploited consumers on the other. While the politicians, essentially agents for foreign capital, wag the finger and presume to “teach” us, like Simon Harris over the weekend warning us against trick or treating at Halloween, as pretending to be sick might have the effect of unnecessarily scaring us.

It’s not trick or treating that scares most Irish people. It’s the likes of Harris and Varadkar stripping out the health service, scapegoating the poor, and happily creating homelessness and exploited workers, leaving them without union protection at the mercy of multinationals, like those Debenham workers still picketing for recognition and justice after all these months.

It’s the established Irish political class that scares people. Because it often seems that the established parties don’t work for Irish people, rather they presume to command, themselves apparently working for pats on the head from figures of foreign power.

While the strategy makes a certain sense – appeasing multi-nationals in return for jobs – the practise often comes across as unseemly, unfair and hopelessly regressive, imposing incalculable costs on native Irish confidence and business potential. As the rest of Europe learned long ago, appeasing does have costs down the line.

The multinationals get all the breaks while the Irish themselves are handicapped by red tape, inflated rates and official insinuations of inadequacy.

The cost of appeasing our multi-nationals with generous tax breaks and grant aid, in return for jobs, means we may never learn to create our own opportunities, and risk remaining forever dependent in a kind of phony independence, with only a flimsy tricolour to warm us when the vultures have finished feeding.

Eamonn Kelly is a freelance Writer and Playwright.

Previously: Eamonn Kelly on Broadsheet

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16 thoughts on “Eamonn Kelly: Multinational Tax And Independence

  1. GiggidyGoo

    Varadkar sure has Foot-in-Mouth disease. Annie Oakley has her work cut out in Europe, with statements like that coming from an ex Taoiseach who hopes to be Taoiseach again.

    1. The rock

      Maybe our future is out of the EU

      Let’s face it
      If virtually zero corporation tax is removed and a level playing field is the future In the EU our cost of living ensures our competitiveness is zero

      That is due to a government who cannot control a rip off economy

      Let’s just see now As covid progresses

  2. Joe

    Varadkar is a typical FG pox on politics who supports multi national tax Dodgers, ably supported by his FFGP cronies
    The Shinners really made Leo look like an eejit here

    @LeoVaradkar you're embarrassing yourself.This is a Key Recommendation of the Expert Review of Corporation Tax commissioned by Minister Noonan & carried out by the former chair of the Irish Fiscal Advisory Council Seamus Coffey.You can read it here: https://t.co/KkxFbiewXc https://t.co/QPOuxvKD5p— Pearse Doherty (@PearseDoherty) October 11, 2020

  3. John F

    For better or for worse, it’s likely that Sinn Fein will be part of government in the coming decade. Up until a couple of years ago, they were the most anti-EU party in the land. More recently, they have become entirely beholden to the European union.
    The EU has tried and failed multiple times to harmonise tax rates and centralise power across the union. We are all ridiculously expensive country to do business in, were not for the tax sweetheart deals nearly all the multinationals would leave. Will Sinn Fein act in our national interest and defend our tax policies at all costs?
    We are pretty expensive country to do business in. Without the sweetheart tax deals nearly all of these multinationals would leave. Some corporation tax, albeit very small is paid, full-taxes are paid on employee incomes, most of them are of upskilled, through further training or college placements paid for by the multinationals. Tens of thousands are employed by multinationals with lots of smaller businesses set up indigenously to directly support them. Imagine if all that tax revenue disappeared from the public exchequer? Imagine if most of these people were on the dole further costing the state, what would public services look like then? Would there be as many national infrastructure project’s?
    Yes, we are a tax haven, but the cost of doing otherwise would be far too much.

  4. Noel Fitzpatrick

    Corporations use the threat of flight to stop governments from taxing them. Call their bluff!..Big tech do not want to move R&D! If a mere relocation would make them more money they’d do it tomorrow!

    1. Dr.Fart

      exactly! im always saying this. They’ll never move. If we charged them the agreed 12.5% it’s still way cheaper than other EU countries, and they wouldn’t move their entire operation out of Ireland on a whim. The upheavel involved, displacing staff, recruiting new staff, locating a new office, etc etc.
      They know they can outnegotiate idiots like Varadkar because they do in day in day out whereas most of the Irish Government have no experience in dealing with these sharks. Most of em used to be primary school teachers, and now theyre negotiating with the best in the world. Lose every time.

        1. Noel Fitzpatrick

          That’s the point, they moved manufacturing! That’s lowest common denominator stuff, do it is in the cheapest place possible. And I remember that Ericsson moved European back office services to Poland (Would have been early 2000’s) because it was cheaper and because Poles have good English. R & D is not as easy to move because companies intertwine themselves with local Universities, so moving would break this supply of knowledge, expertise and future staff.

          1. Cian

            And if moving R&D saves them money, they will move.

            I agree that manufacturing is more easy to move, but companies only look at the bottom line.

  5. Junkface

    The American Tax loop hole system has wreaked havoc in markets worldwide, increased the wealth gap, damaged the environment. The knock on effects are huge. Ireland needs to tax the biggest corporations something reasonable, this 0.01% tax or whatever they were paying is a joke.

  6. Dr.Fart

    save yourself a headache and don’t read the tweets responding to varadkars tweet .. so many dimwitted fools agreeing with him. There’s a reason why there are Paddy Irish man jokes. In general, a nation of twits.

  7. Vanessanelle

    Ok, the relevant tax charges needs to go up a few tics
    Everyone accepts that, and I think you’ll see something along those lines in the Budget speech tomorrow

    But the rate is not the real problem
    its the ridiculous Capital Allowances they get

    you could have a 50% CT rate, but that means sweet f.a. if they’ve got 50 million in CAs, plus an entire tax code of permitted write offs and reliefs to throw against their profits in any one year

    Like it or not FDI has been the aim of the Irish State since the 50s
    Has its own Senior Minister n’all
    Why do you think so many Paddys sell up at the first offer of a few million for their start up, rather than try and build their companies up into multi billion dollar companies?

    A better discussion would be why not have a dedicated senior Minister for Small Business’ and Sole Traders
    and actually get in behind growing Irish Indigenous Business’ and Product
    Just a thought

    1. Gavin

      So as per everything with Irish politicans, devoid of any real ideas or at best terrifed of trying them, so just stick with the same old tried, tested…doesnt upset the cart approach

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