It was a bright morning last Thursday when residents of Edenmore awoke to the sound jackhammers. Sleepless nights are nothing new in bailout Ireland but fashionable supply-side adjustments rarely have people peering out the window in disbelief.
Centrepiece to Ireland’s IMF program is the creation of a new centralised water utility. Accompanying taxes are due to begin this Autumn.
The national campaign against austerity is now reduced to ultra-localised pockets of resistance and after initial stand-offs, authorities are coming better prepared. The installation of water meters in this quiet Dublin suburb saw workmen flanked by a dozen uniformed police officers.
Meanwhile, government were busy recruiting an altogether different posse. The appropriate muscle in this case was a ‘high-powered international legal team’ who are here to ‘vigorously defend’ Ireland’s corporate tax regime, during what will be a tense European Commission led inquiry.
Ireland’s relationship with US multinationals has been under the spotlight since Apple CEO Tim Cook appeared at congressional hearings last summer. International headlines and branding of ‘tax haven’ have been something of an existential nightmare for Irish authorities but only their own doublespeak prevented more favourable clarification.
The main point of scrutiny is not Ireland’s headline rate of 12.5% but the web of incentives which lie behind it. An effective rate of 2% that helped Apple Inc pay just $36m on $7.11bn profit.
Dublin’s collection of legal and accountancy firms publish brochures advertising exactly this rate in effort to attract business. The docklands bulge with shells, subsidiaries, brass-plates and post boxes. A fictional reflection of globalised finance.
So like elsewhere, corporate tax strategy has become an industry itself. When a small country nationalises $144bn losses, you quickly understand that financial services have been remarkably successful in conflating the ‘national interest’ with their own.
They are the middlemen between global profit and local law.
Selling know-how and access to the tax system. They understand that you can do business not just in Ireland, but through Ireland.
Residential water is scarcely debated. When questions of corporate tax arise, no other issue will see ‘national sovereignty’ invoked so vehemently.
Ireland’s place in the movement of transnational profit remains the foremost sacred cow, in a domestic economy with few certainties.
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