Fair Game or Just Dangerous – Subsidising Multinationals

Fair Game or Just Dangerous – Subsidising Multinationals

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The Irish government’s trade mission to the United States of America found it’s way to California to meet the Governor Gerry Brown who took the opportunity to have a dig at Ireland’s tax regime. In particular he noted that Apple, a Californian company, might as well be an Irish company at this stage by the way they use creative accounting to funnel profits through Ireland.

Though it should be at the discretion of a nation to design it’s own tax regime to attract business, it should still maintain a level playing field at home. If the EU investigation mentioned in the article does find what many already suspect, that Revenue have given special tax deals to some multinationals, then we have the unfair situation of our nation’s corporate tax burden being carried by our indigenous industries for the benefit of private company profits of very large foreign corporations.

This is certainly not ‘fair trade’ and the Irish government could find itself in hot water with the EU. Gerry Brown can be forgiven for being annoyed that Apple are able to divert profits to Irish registered companies where they pay tax far below even the low rate Ireland offers . Surely the hard pressed taxpayer in Ireland feels the same.

This is worrying because it creates a dangerous political problem. It appears that vested interests and lobbyists for corporations have huge influence over the decisions of the Irish government. Corporations are becoming so large now that they have turnovers bigger than many countries’ GDP.

We have the unhealthy scenario where multinationals can come to a country like Ireland and offer us a thousand jobs if we give them better terms than anyone else in the marketplace. So we give them large start up grants and government investment, and then we do unfair deals on tax and allow them to basically launder foreign money through the Irish registered companies.

If we aren’t playing ball they threaten to give the jobs to eastern Europe. If we do play ball they come here, use the slush fund and when it runs out they close up and move production abroad anyway. Of course they return again when the new grants are available.

OK we understand there is competition going on because global business wants to find a profitable place to operate from and export, but as Gerry Brown and the EU are suggesting, unless we have some kind of international cooperation amongst countries on this issue we are going to perpetuate and worsen a problem that will see the political influence of large multinationals growing and the continued subsidising of their profits by the small and medium sized companies who pay much higher costs for their trade.

This unhealthy balance of power will only get worse with the imminent introduction of the TTIP being agreed between EU and US governments as the power of corporations over governments will stretch beyond arm twisting to the force of law. We all need to take a step back and demand transparency, honesty and common sense from our politicians who are driving this.

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5 Comments

  • Posted June 7, 2014

    Phil Winston

    Maybe people would care about this if they didn’t see the taxes that are collected wasted so easily and so frequently. The government crying corruption is a bit ridiculous.

    • Posted June 9, 2014

      Admin D

      I doubt they would cry corruption when they are in it up to their necks?

  • Posted June 7, 2014

    John O’Donoghue

    The public have to shoulder some aspect of the blame. If we don’t like their corporate tactics, then don’t buy their products. As it is, look at the queues outside any retail outlet if it is selected to sell the new iPhone or whatever else.

    These queues are in 1st world countries where most people have some reasonable standard of education, access to the internet and access to news broadcasts from different media networks.

    I agree with your article, yet Apple etc keep growing by popular demand.

  • Posted June 8, 2014

    Gael

    transparency, honesty and common sense from our politicians

    Has this ever happened? Will it ever happen?
    I don’t think so…..At least not until we the people have enough power to make it happen.

    No one will ever give you Power..Power is something you TAKE!

    However, we do now have a brand new opportunity to take back our power.

    To understand this we must first come to realize that Power is Money and Money is Power.
    Many mistakenly believe that Power comes from the barrel of a gun, but guns cost money as do soldiers armies. elections, media etc.

    All empires have fallen through lack of money.

    The money systems we have today by design make a very tiny minority extremely rich and powerful, while they make the vast majority poor and powerless.

    So if there was an alternative form of money which any one could use and which could only be controlled by a consensus of the majority of it’s users, could be sent instantly (at virtually no cost) to anywhere in the World without the need or approval of any body.

    Furthermore, if this money, rather than constantly loosing value, (as normal money does through inflation) actually gained in value over time, We could build a whole new economy based on this which would be far more productive and outperform all other economies, thereby bringing real wealth and Power back to the majority.

    While this might sound like wishful thinking or science fiction, this money already exists and, not surprisingly, it’s use is growing at break neck speed.

    It’s referred to as Crypto Currency. The first and by far most popular version of it is called Bitcoin. It started out about five years ago having no value but gradually gained value and is currently valued around 500.00 Euro for one Bitcoin. It is generally expected that it will eventually reach possibly up to one million Euro per Bitcoin. This is because only twenty one million Bitcoins will ever be created so as demand rises so will the price.

    Bitcoin is not owned or controlled by any company, bank or Government but is a decentralized open source system which is distributed over millions of computers all over the World. It’s core is what’s known as the Block Chain which is a massive ledger of all Bitcoin transactions the have ever occurred.

    While you can’t actually hold a Bitcoin in your hand it is nonetheless as real as any other currency if no more so.

    Admittedly this is a very difficult concept for most of us, even top economists or computer scientists to get our heads around, but fortunately like driving a car we don’t have to know how it works in order to use it. We just need to know how to get it, how to keep it safe from thieves and how to spend it.

    Thousands of companies are now accepting Bitcoin as payment as are American Politicians and their numbers are growing by the day. I would strongly suggest that DDI do likewise. If you need any help I’m sure the Irish Bitcoin Foundation would be glad to help.

    In short..every time we exchange Euros, Pounds, Dollars etc. for Bitcoins we are empowering ourselves and equally dis-empowering the Parasitic classes who have been enriching themselves while keeping us in mediocrity for centuries.

    While you might think that the Powers That Be will clamp down on this if it threatens to disrupt their cozy system. The fact is that they can’t because it has no center that can be attacked or taken down.
    It’s everywhere and invisible. Besides,,, their army of subordinates have no desire to stop it since they have more to gain by jumping ship than by continuing to work for a crumbling empire. So they’re going to have to learn to live with it.

  • Posted October 26, 2015

    john cully

    On taxation; it is very simple in reality. All taxation as you know it is inherently unjust, being grounded in an integral structural injustice. So long as people keep pursuing the chimaera of a “fair tax” they will forever simply be shooting themselves in both feet. Every tax is, in the long run, inherently self-defeating. There is only one right and just way by which a state should finance itself, there being only one way in which this accords with justice. So long as people remain indifferent to these principles and especially to justice (which they conflate with their own petty personal advantage) so too will they flounder from one worthless expedient to the next. It is that simple.

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