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Apple’s 2% bite

During the US election the news broke that the Apple corporation paid an average of 2% tax as a global corporation outside the US borders. 

The information cast a searchlight on the jewel in the crown of Irish economic strategy: the 12.5% corporation tax that successive Irish governments, with the agreement of their social partners in the trade union bureaucracy, have fought to protect through successive waves of austerity and economic programmes imposed by the Troika. 

The 12.5% is itself a massive subsidy. Besides the bank bailout, the Irish economy runs a current account deficit, spending more than it takes in. By reducing the tax on transnationals, it increases the indirect tax burden on the working class and the savagery of the job, pension and service cuts imposed on workers. 

Now we find that the 12.5% is completely notional. This should not surprise us. Ireland is already famous because of Google's use of the "double Irish" - funnelling profits through Dublin and the Caribbean to reduce tax to close to zero. 

In fact on closer examination Ireland charges a negative tax on transnational capital. Apple's latest investment here is to be supported by the local education system picking up the tab for training the workforce to a specific role within the company - one of a whole range of benefits subsided by Irish workers. 

All that transnational capital brings to Ireland is capital itself - and that capital will inevitably follow the rate of profit around the globe. It is not possible to present a policy of limitless accommodation to capital as a strategy for developing the economy, especially when it includes the giveaway of natural resources. 

But the strategy of Irish capital is quite different. Towards the end of the boom it shifted towards support for financial services. The first 50 firms to move into the Dublin centre and gain 12.5% tax rates were Irish. Irish capital acts as the agent for transnational capital in the offensive against Irish workers. 

Moral indignation about the rich that ignores imperialist domination in Ireland will not take us very far.


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