Irish government raises corporation tax rate
Dublin deal with transnationals meets little opposition.
13 November 2021
The Minister for Finance Paschal Donohoe.
The famous polymath Umberto Eco used his medieval detective thriller, The Name of the Rose, to explore the field of Semiotics or the study of signs and symbols.
The sign is not the thing it represents. That helps us understand the high-speed U-turn by the Irish government on corporation tax and its instant acceptance across the political spectrum.
The 12.5% corporation tax represented a total submission to the interests of imperialism and transnational finance. The rate, it is claimed, has risen to 15%. The bending of the Irish economy, legal system, society and workers’ rights will continue as before.
In actual fact major concessions have been made to Irish capitalism. Dublin persuaded the OECD to Change a global rate of “at least 15 per cent” and replace it with a commitment to a 15% fixed rate that will not increase. In addition, for smaller, domestic companies with a turnover of less than €750m, Ireland will keep the 12.5% rate.
The claim is that Ireland is likely to lose €2 billion in tax income. That's not actually true. Firstly they would likely be at equal risk from refusal. Secondly, if the deal goes through everywhere there is no advantage to transnationals in moving their headquarters.
So, nothing to see here?
There is however one question. Why is it that US imperialism is demanding a higher tax rate when the Irish left parties did not? Why are they and the trade union leaders not now taking the opportunity to demand higher taxes and to question the low tax regime for smaller firms? Is not low tax, low wage and low public services the definition of neoliberalism and the decades long offensive against the workers?
For the last period People Before Profit policy has been to demand that corporations actually pay the 12.5 % and to avoid the question of rates.
Pearse Doherty of Sinn Féin made it clear that his party support the shift. It is “very clear we have to be part of this agreement".
It "still allows us to be competitive, but less competitive than where we were", so there is a need to focus in on housing, childcare, investment in infrastructure and higher education "to allow us to be competitive into the future"
In a perfect example of doublespeak support for social projects establishes Sinn Féin's left credentials while their nod to a continuing low tax rate ties them to the right. How are we to pay for the social spending if we don't tax corporations?
The hesitancy on the left is explained by the fact that transnational companies in Ireland employ 500,000 people, among them US tech giants. There is no one outside the tent. All, left and right, accept Ireland's dependency.
An Irish Times/Ipsos MRBI poll found 59 per cent of respondents opposed increasing the corporate tax rate. This is part of a long-standing view, where a majority supported Apple's giant tax heist from Europe with the help of an imaginary company built by the Irish administration. Not only do transnationals make up a huge slice of the economy, pay and conditions are generally better.
The imperialists have no hesitations. Mark Redmond, chief executive of the American Chamber of Commerce Ireland, “warmly welcomed” the announcement.
“The revised agreement ensures essential predictability, stability and certainty for multinational employers,” he said.
Yet most of Ireland's corporation tax comes from 10 companies, many of whom could change headquarters in a heartbeat. The economy lives on a knife edge. In the meantime they own Ireland.
The economy is distorted, with special measures used to measure the native economy as opposed to the dominant transnational sector.
Is there an alternative?
In the absence of major steps towards a socialist world any government, even a workers' government, would have to deal with the transnationals. However, there are many examples where state governments exert themselves and avoid subservience. The CEOs themselves tell us that there are many factors that decide investment. Having a pliable government is only one factor among many.
So, a socialist government would impose a higher tax. In Britain in the 60s the rate was 43%! How high the rate can go is a matter of negotiation. Much more important is to look beyond the transnationals towards a future system.
An important item would be mirror systems. The government should sit alongside the corporations to master technology and administration. If the transnationals walk away we would remain in control.
Law and administration would focus on environmental protection and workers’ rights rather than the rights of the capitalists.
A worker's government would build its own economy through workers enterprises
The possibility of success can't rest inside Ireland. We could build international solidarity by reaching out to the socialist enterprises and cooperatives across the world and welcome to our shores the mass untapped and creative talent that we know exists.
For such a programme to see daylight there must first be a break from the current climate of capitulation on the left and a mobilisation of the widespread anti-imperialist sentiment that still exists in the working class but at the moment is not represented.