We should collect Apple’s €13 billion and change Ireland

Our decades old economic strategy based on low corporation tax is probably doomed anyway

EU Competition Commissioner Margrethe Vestager says Apple allocated almost all the profits it made in Europe and other regions to untaxed non-tangible headquarters in Ireland. Video: Reuters

 

The old British game show Take Your Pick! culminated in the contestant being faced with a dramatic choice: take the money or open the box. The money was the little windfall the contestant had earned by answering questions earlier in the show. And the box contained - well, who knew? The studio audience, and those of us watching at home would chant “Open the box! Open the box!” because that was where the fun was. The box might contain what counted in those days as a fabulous prize - a new car or a foreign holiday. Or it might be a bag of boiled sweets or a box of matches. For the contestant, the choice was agonising - settle for a nice few quid or gamble and risk losing it all. The agony of indecision was highly entertaining.

And Ireland is now the winning contestant in an unlikely gameshow, puzzling over what prize to take. A political culture that likes to avoid big decisions is now faced with a choice of profound consequence. The European Commission’s ruling that Ireland must recoup the staggering sum of up to €13 billion in unpaid taxes from Apple is arguably the greatest single challenge to the State’s economic policy consensus since T.K. Whitaker and Sean Lemass engineered the abandonment of economic nationalism in 1958. It is not just about the potential windfall, vast as it is. It is about what kind of State we have and what kind of future we see for ourselves as a republic.

Whitaker/Lemass revolution

Take the money or open the box? Stick with what we have or risk getting a booby prize? The “take the money” option is to hold fast to what we know: a State that is perhaps more closely allied than any other democracy with the interests of global transnational corporations. Since the Whitaker/Lemass revolution, the unspoken rule of all Irish policy has been - don’t do anything that in any way threatens to upset the huge, mostly US-based corporations whose investments shape both the economy and a remarkably enduring political consensus. This is not mere cravenness. If Ireland has sold its soul to the corporations, it has arguably got a very good price for it - not just jobs and tax revenues but a relatively peaceful transition from conservative nationalism to global modernity. It is not surprising that the entire Establishment is of one mind on the Apple ruling - there must not be the width of an ultra-thin sheet of silicon between Apple and Ireland on this. The tricolour has an Apple logo in the centre and we will all rally behind it to ensure that the tax bite out of the apple is as tiny as the corporation wants it to be.

And the “open the box” option? Unlike the gameshow contestant, we now have a reasonable idea of what the box might contain. After weeks of spinning from official sources that the Apple tax bill would be at most a few hundred million euro, we have that eye-watering figure of €13 billion, possibly rising to €19 billion with interest. It is not a definite sum, of course. But it gives us an order of magnitude that has radical implications. Size, in this, matters enormously. A few hundred million is probably not worth upsetting ourselves or our corporate allies over. Something of the order of €13 billion most certainly is.

Podcast: O'Toole on our unwanted €13bn

Why? Because it could be life-changing. Used properly and rigorously, a sum of that order could, for example, wipe out child poverty in Ireland in a decade - an epoch-making, transformational intervention whose benefits would be felt by the whole society for generations to come. The State has been given an unexpected and weirdly unwanted opportunity to reinvigorate itself. It has been presented with a one-off chance to create the kind of public project that would entitle Ireland to call itself a republic.

Reputational damage?

But, mainstream opinion will insist, even this vast windfall might in fact be a booby prize. If we take this money from Apple, we will make the corporations angry. When the government talks of “reputational damage” it ostensibly means damage to Ireland’s reputation from the EU ruling’s implication that the State was being used as a tax haven. But the reputational damage it actually fears is quite the opposite - damage to our well-earned reputation among corporations for facilitating tax avoidance on a global scale.

And it is indeed true that refusing to appeal the ruling and collecting the taxes that Apple owes would open a box full of uncertainties. For 58 years, we have been governed by a single mindset. We have lived by, and lived off, the idea that Ireland’s place in the world is as a haven for global corporations - sometimes for their productive, job-creating facilities, but sometimes just for their mobile, tax-fugitive billions. This is what we know and the thoughts of having to rethink it terrifies us. It is easy to understand why the State would tell its citizens to resist the allure of a short-term bonanza and hold fast to a way of functioning that has, broadly, worked.

But in reality, we do not have a choice between the sober certainty of doing what we’ve done for 58 years and taking the plunge into the unknown for the sake of a one-off windfall. For the certainty that is being held out as the reward for sticking by Apple and appealing the ruling is already gone. The EU ruling is itself a symptom of a much bigger shift: amid a longterm crisis in global capitalism, massive corporate tax avoidance is becoming politically unsustainable. And a vision of Ireland that places the facilitation of that tax avoidance at its heart is therefore not sustainable either.

Michael Noonan tells us that collecting the tax that Apple owes would be like “eating the seed potatoes”. This encapsulates a mindset: Whitaker and Lemass planted the crop 58 years ago and we just have to keep sowing the same strain. But in truth the ground is shifting fast. Ireland’s place in the world is being complicated by the global reaction against corporate tax avoidance, by Brexit, by the growing tensions between the US and the EU. To say that we will fight to the death to preserve the Irish order as it was in 1991 and 2007, when Apple got its sweet deals, is not hard-headed realism. It is the indulgence of a fantasy that the way it was then is the way it will always be.

Decision time

That’s why the Apple ruling is a huge moment of decision for Irish society as a whole. We can go on insisting that our collective identity lies in being the world’s best pal for global corporations - and therefore plant our flag firmly in the past. Or we can say that we are part of an international order in which those corporations have responsibilities, including the duty to pay fair taxes.

At the very least, we should not be railroaded into lodging an appeal against the ruling that will define us, for the rest of the world, as the tax-avoider’s crazy little sidekick. We have some big thinking to do - and the cabinet’s job on Wednesday morning is to open up that process of deliberation, not to insist that any democratic decision that Apple does not like is unthinkable.

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