Credit: Gript

Fintan O’Toole calls it: Ireland is a “rogue state” on taxes

There is good news here, and bad news. The good news is now that we are a rogue state, the chances of the Americans deciding to launch a pre-emptive strike and liberate us from the tyranny of NPHET or whoever have increased dramatically. The bad news is that it is unlikely that many serious people will actually agree with Fintan O’Toole that Ireland merits that status, simply for wanting the right to set its own tax rates.

Here is the meat of his argument, if you are interested:

You’ve heard of virtue signalling. But have you heard of the Irish variant: vice signalling? The Government seems determined to show the world that Ireland is a rogue state.

Last Thursday, 130 countries signed up to the Organisation for Economic Co-operation and Development’s (OECD) plan to limit tax dodging by multinational corporations, including a global minimum corporation tax rate of 15 per cent. It is a modest reform: the Biden administration wanted to impose a minimum global tax of 21 per cent on US companies.

Just nine of the 139 countries that took part in these talks refused to sign up to the 15 per cent proposal. One of the refuseniks is Ireland……

This vice signalling is both immoral and stupid. Immoral because it marks Ireland as a willing enabler of a system of tax avoidance that robs other states of public resources and generates disastrous levels of inequality both between and within countries. Stupid because it is doomed to fail. We are, under both headings, defending the indefensible.

There are two elements to Fintan’s argument here. Both are daft, but his status as Ireland’s premier columnist requires looking seriously at each.

In the first instance, he argues that Ireland’s corporate tax rate is immoral, because it “marks Ireland as a willing enabler of a system of tax avoidance that robs other states of public resources”. This is an astonishing argument. First, tax avoidance and tax optimisation are not the same thing. A company which decides to pay taxes in the jurisdiction that charges it the least amount of tax, relative to other jurisdictions, is not robbing the countries in which it does not locate. A company which locates in Ireland and pays the legally required amount of tax is not avoiding taxes. It is paying them.

The other absurdity is the idea that the country with the low rate of tax (in this case Ireland) is committing grand larceny. In fact, other countries retain, and have always retained, the option to match Ireland’s tax rate, or even undercut it. It is astonishing, in fact, given how successful the strategy has been for Ireland, that nobody in western Europe has tried.

Fintan’s argument is that Ireland should sign up to a 21% tax rate dictated by the US Government because this would demonstrate that we are good global citizens who are willing to, in so many words, share our wealth with others. In essence, he is arguing that other countries, and not the Irish electorate, should be allowed to set our tax rates.  Which is the rogue state, exactly? The country which wishes to retain the right to set its own tax rates, or the country which argues that it should be permitted to set the tax rates of other countries? Fintan has this one backwards.

The second argument he makes is “inevitability”. This, to make a long story short, is centred around the idea that if Ireland fails to comply with the demands of the “international community”, other countries in that community will band together to inflict punishment upon us. Perhaps they might do this by changing their own tax laws to extract cash from Irish-based companies who sell into their markets, or by some other mechanism. They have not done this to date, of course, because doing it would be legally problematic and a nightmare to administer. The whole reason they want us to change our own tax rates, of course, is because this alternative option just is not, and never has been, viable. If other countries could undermine Ireland so easily on taxation, they would have done it decades ago.

Fintan argues that Ireland will eventually comply with European and American demands because, in his words, “we cannot afford to give the finger to Washington and Brussels”. This is as close as he will ever come to admitting that in his view, Ireland is not really an independent country at all.

The truth is that yes, we can (and indeed should) give the finger to Washington and Brussels. If we fail to do so, then we will be admitting that our independence on something as fundamental as taxation is a charade, and that actually, our fiscal decisions are made elsewhere, by people outside our borders.

The bottom line here is this, without wishing to get too nationalist about it: Many thousands of people died, for good or ill, to make Ireland an independent, self-governing state. Our wealth, such as it is, has been legitimately obtained by attracting investment and wealth from overseas, which came here voluntarily. We are not rich, like some of those who lecture us, from the profits of colonialism and Empire. Ireland has done, and is doing, nothing wrong. We are not a rogue state. The Irish Times, though, may have a rogue columnist on its hands.

Share mdi-share-variant mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-printer mdi-chevron-left Prev Next mdi-chevron-right Related
Comments are open

The biggest problem Ireland faces right now is:

View Results

Loading ... Loading ...