The European Commission have recently handed Apple with a tax bill of £11 billion. The executive of a supranational organisation that has a track record of undemocratically imposing neoliberalism on countries has just made a correct decision. But the Irish government have revealed themselves to be paragons of irrationality by stating that they actually don’t want the money. The Irish government are so entrenched in their own ideological backwardness that they are literally rejecting free money.
The ruling of the European Commission wasn’t that it taxes across the EU would be retroactively raised or that corporate taxes will be higher going forward. All the ruling said was that Apple avoided £11 billion-worth of taxes illegally and now has to repay that money. However the Irish government has argued that forcing Apple to pay this sum may discourage the company from further expansion. In addition, Irish Finance Minister Michael Noonan has even gone so far as to say that the ruling undermines the integrity of Ireland’s tax system.
Firstly, making Apple pay its taxes won’t stop them expanding because they self-reported quarterly net revenue of $42.4 billion and quarterly net income of $7.6 billion. And secondly the Commission has simply clarified what is legal. If the Irish government doesn’t want £11 billion of free money, I’m pretty sure the Irish people would take it. Another hilarious statement from a government spokesman was that the money would have to be spent on reducing the country’s debts. I’m not an expert in finance but how is paying off £11 billion of debt a bad thing? The answer is that it isn’t.
Another question that the Irish government must answer is in relation to corporation tax rates. The country’s low corporate rates theoretically encourage FDI from the private sector, and thus boost revenue in the long run. In a world dominated by free trade, capital flight can be a genuine problem for countries, but if Apple weren’t paying any taxes to start with what is the justification for such a low rate? There isn’t one. If the corporate rate was raised or simply enforced the revenue could be spent on stimulating job growth, which would offset any losses that would be generated if Apple were to up sticks and leave. Neoliberal politicians have reduced the power of nation-states by so much, and allowed the power of corporations to grow by so much, that collecting taxes is seen as a risk to market confidence.
The other international reactions that I want to touch upon are those of the UK and the US. Theresa May has essentially said that because of Brexit the UK won’t have to abide by EU competition rules, and therefore Apple could move across the Irish Sea. The only way that this is true is if Britain didn’t have full access the single market, which the PM has said that she opposes.
The other more annoying reaction came from across the pond because it showed a stunning lack of self-awareness. The thing I am specifically referring to is the statement from White House Press Secretary Josh Earnest who claimed that this deal was bad because Apple could deduct the payment of these back taxes from it tax returns in the US, and therefore the American taxpayer would suffer. So in effect the White House is saying that the European Commission’s ruling is bad because it exposes a glaring loophole in our own tax system and rather than close it we’ll blame you. The US government is pretending that that corporations are the divine entities that can do no wrong. The tax code can be changed so that Apple has to pay all its taxes in Europe without getting the American taxpayer to foot the bill.