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Apple and Ireland: Partners in Crime

Dublin, Ireland.

Underneath the sleek design there’s nothing but sleaze. And behind the blarney there’s sinister bullshit. No wonder they understand each other and have been working harmoniously together since 1991. Despite the ultramodern technology and the trendy little economy – Apple and Ireland are nothing but pirates attempting to pillage as much as they can from the global community.

All was revealed in Brussels on Tuesday when the EU Competition Commissioner, Margrethe Vestager, nailed the corporation and the country to the wall of shame. After investigating Apple’s tax arrangements in Ireland Vestager concluded that Dublin is breaking EU rules by giving state aid to Apple – one of the richest corporations in the world (it’s value is not far off a trillion dollars).

The state aid in question is a tax arrangement that allows Apple to avoid paying international tax. The trick is the use of a shell company that is based in Ireland but which is officially “stateless”. By directing all the money it makes outside the US into it’s “Irish” shell company Apple – thanks to the Irish government – walks away with a tax rate of “0.005%”. That is: apart from the token amount it pays to the Irish government at the usual 12.5% rate – Apple walks away with everything it can get it’s hands on. But since this special tax package is offered “only” to Apple the EU judged it to be a breach of it’s competition rules.

Ireland in other words has been “subsidising” Apple’s international profits (in October 2015 it recorded an annual profit of $53.4 billion). By offering a phantom address and turning the other way Ireland is facilitating a world wide tax dodge. And what does Ireland get in return for this “service”? Six thousand Apple jobs. And what can the EU do about it? It is attacking the shell company and demanding that it pay the “Irish” taxes it has been avoiding all these years. It calculates an unpaid Apple tax bill of $14.6 billion plus interest (a world record penalty). And Ireland’s response? It claims innocence and doesn’t want any money from Apple!

That’s right. The Irish state which is up to it’s neck in debt (it owes $232 billion) refuses in the face of it’s EU masters to “tax” the richest corporation on the planet (Apple is sitting on a mountain of cash worth $231 billion). The asymmetry is perfect. And is a true reflection of globalisation. For the sake of the corporation – the nation state is impoverished. And for the sake of the corporation – the nation state impoverishes other nation states. You would think that Ireland learned it’s lesson after it bailed out it’s banks. But no: it continues to carry water for the corporation. And sees nothing wrong with this – even when it is dying of thirst. It is obvious therefore that “dignity” is excluded from the official Irish lexicon. And justice – at home and abroad? That’s a foreign language in the corridors of Irish power.

The irony is that Ireland – a victim of the EU’s extreme financial capitalism – is making the EU look good. Neoliberal Ireland is being called to order by Neoliberal Europe. And Ireland dares to protest even though it has been caught red handed cheating Europe and the world. In the name of competition Europe wants justice. And in the name of globalisation Ireland rejects justice. It’s a right wing joke. It’s a neoliberal farce. But it’s deadly serious too.

The issue is taxation. And in the age of austerity this is an explosive subject. And it looks like the EU understands this while Ireland has it’s head buried in the sand. It is no surprise that the EU is coming after Apple and Ireland because the OECD has been openly targeting tax havens since 2014 (see the OECD’s Beps project). When Western governments are bailing out every bank in the Western world – tax avoidance becomes a real issue. The significance of Tuesday’s ruling against Ireland and Apple is that it has set a strong precedent. The EU intends to hit Europe’s tax havens hard. Luxembourg and Holland beware!

And the USA? The USA is angry. Because it’s corporations have been caught red handed. And because it’s government is controlled by it’s corporations. The likes of Apple, Amazon, Microsoft, Starbucks and McDonalds have lodged themselves into the dark corners of Ireland, Luxembourg and Holland. And are walking away with staggering amounts of untaxed profits. The US government fears that it will now have to pay for the sins of it’s corporations. But that will be the case only if it is spineless. The USA can fight it’s tax dodging corporations if it wants to. However that would mean ultimately a break with Wall Street. Is that possible?

In any case sit back for the moment and enjoy seeing the Atlantic establishment fight each other over the issue of taxation. The fragmentation of the Atlanticist Agenda is for the benefit of us all because it is a Corporate Agenda. If the neoliberal fanatics – the competitive hardliners – in the EU are the source of this current concern for justice: who cares? We welcome justice whenever it comes along. And isn’t history after all dialectical? Contradictions in the system will transform it. And who knows this current discord may even block the Transatlantic Trade and Investment Partnership (TTIP). Perfect!

And Apple? Surely it will have to change it’s smug wording on the back of it’s products. Not only is it “Designed in California” and “Assembled in China”. It is also “Dodging tax in Ireland”. Taxpayers of the world unite!

 

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Aidan O’Brien lives in Dublin, Ireland.

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