SocialismToday           Socialist Party magazine

Issue 202 October 2016

Irish government backs Apple tax dodge

The spectacle of the Irish government appealing the ruling of the European Commission that Apple should pay €13 billion in unpaid taxes to the state is shameful, a stark reminder that it is a craven servant of big business. The government is siding with a company that has cash reserves of €200 billion, and is engaging in massive tax dodging with the government’s assistance.

Finance minister, Michael Noonan, claimed disingenuously that, even if this money were recuperated by the state, it could only be used to pay down Ireland’s debt, a largely odious one created by the property crash of 2008-09. It now seems from the Commission’s statements that this is not true. Regardless, the €13 billion windfall should be used for investment to meet the needs of working-class people, not the bondholders.

The European Commission is no friend of the working class. It has been a central component of the troika that foisted vicious austerity programmes on Greece, Ireland, Spain and Portugal. When doing so, the Irish government obediently implemented and supported these programmes. In July, for instance, the government used a Commission ruling demanding the imposition of water charges to argue that they would have to be re-imposed. The obvious contrast between such statements and the government’s scramble to ensure that Apple does not pay the taxes it owes should be lost on no one.

This hypocrisy has been mirrored in the big-business media. The day after the ruling, a headline in the Irish Independent screamed: ‘Ireland Must Stand Up To Faceless EU Bullies’. This was the very same paper that consistently vilified public-sector workers, along with the anti-household tax and water charges campaigns, while cheer-leading troika-inspired austerity, telling us they were all but inevitable. Prior to the ruling, the Irish Times (30 August) argued that it would be "damaging for the state" even if Apple was forced to pay a sum in the low billions.

They are contemptuous of the idea that this money could be used to fund public investment, a reflection of the ruling class’s fear that Ireland’s image as a tax haven for big business will be damaged. Since the 1950s, Irish capitalism has relied on investment from multinationals to help industrialise the economy and develop a manufacturing base, reflecting its own inability to do so. They hoped they could profit from any potential spin-off development in the indigenous manufacturing, construction and service sectors of the economy.

This is why successive governments have sought to attract multinationals with sweetheart deals, such as the one given to Apple in 2007, or with a pitifully low headline tax rate of 12.5% (the real rate is 8.3%). The degree to which this low-tax model has developed the Irish economy has been exaggerated; only one-sixth of the workforce is employed directly or indirectly through the multinational sector. The bitter experience of Dell in Limerick in 2009, when 3,000 workers were sacked so the company could move its operations to Poland with its lower paid workforce, illustrates how such jobs will be destroyed in the interests of profit.

The €13 billion owed by Apple must be paid up straight away. All the tax breaks and loopholes offered to big business in Ireland must be brought to an end. Corporation tax must be drastically raised and the tax on big-business profits, ultimately created through the labour of working-class people, must be ploughed into building homes, and investing in public services and infrastructure, such as renewable energy.

If we are to develop a viable manufacturing base we must end the reliance on the private sector which has failed to do so. The key sectors of the economy must be brought into democratic public ownership. On the basis of a democratic plan of the economy, their resources must be utilised for the benefit of everyone in society, not a handful of billionaire CEOs.

Cillian Gillespie, Socialist Party (CWI Ireland)

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