Ireland: Yes, we have sweet international tax incentives, sorry we’re not sorry
posted at 8:01 pm on May 21, 2013 by Erika Johnsen
In a Senate hearing earlier today, Rand Paul rightly went on the rhetorical rampage in defense of Apple and their completely rational and legal attempts to minimize the amount of money that they pay in taxes (if you haven’t listened to his epic free-market rant yet, I definitely recommend it). Why, for instance, is it incumbent upon Apple to willingly pay more in taxes than they have to? If it is worthwhile for any business to invest the resources into finding ways to save money, you should always assume that they are going to do so — and that is a good thing, since in the end it benefits consumers and the economy just as much as it does their business model.
The fault doesn’t lie with Apple and the completely misbegotten sense of patriotism that they are ostensibly supposed to display by pouring as much money as they possibly can into the federal government’s coffers; rather, it lies with our wildly burdensome and uncompetitive tax code that gives companies a clear incentive to do otherwise. We are living in an increasingly global economy, and we better man up and deal with it — and I do not mean by persecuting the individual companies looking to streamline their taxes, because watch them close up shop and move aborad your own peril.
Ireland is one of the supposed culprits that Apple used to their tax-strategery advantage, and while the small country certainly has a heck of a lot of economic and fiscal problems on their hands, there is nothing illicit going on with low rates that make it appealing for multinational companies to do business there. An Irish official today paid the obligatory lip service to the trumped-up need for ‘robust international agreements’ to prevent tax-dodging to appease the Euro-bureaucrats, but they are not apologizing for having a tax code that attracts people and companies to their shores — nor should they. Via the NYT:
Deputy Prime Minister Eamon Gilmore of Ireland told reporters in Brussels on Tuesday that his government supported efforts to close “loopholes” in corporate taxation, but said these did not stem from Irish taxation policy. …
Ireland’s corporate tax rate is 12.5 percent, less than half the level in many larger European countries. American companies with their European headquarters in Ireland often pay considerably less than this on their European earnings because of accounting techniques that permit them to shift revenue to subsidiaries in offshore tax havens — as Apple has been accused of doing in a report prepared by Congressional investigators. …
While Ireland misses out on some tax revenue, analysts say its economy more than makes up for this in other ways, including the tens of thousands of jobs that American technology companies have created there – and the income taxes that well-paid programmers and executives contribute to the Irish treasury. Apple alone employs more than 4,000 workers in Ireland, while Google employs more than 2,500 there. …
Discrepancies like this have given rise to growing frustration among European policy makers at a time when governments are cutting budgets and struggling to make ends meet.
Of course, august European financiers and political leaders are saying that we all need a “global solution” to prevent multinational companies from exploiting loopholes, blah blah blah — but they are too often going about this “globalization” thing in precisely the wrong way (more central planning imposed upon an ever-wider swath of people? No. A free and open global economy across all fronts? Yes.). I’ve got your solution right here, and it’s called competition, which works just as well among individuals and private companies as it does countries and currencies. All of this talk about punishing companies that dare to seek legal means to decrease their tax burden and the countries that shelter them is nothing but antithetical to economic growth and a global free market.