The EU Commission’s ruling on Apple is huge. It will redefine our relationship with the EU and it puts us on to a totally different economic orbit to the rest of Europe.
In the wake of Brexit, there is a political dimension to this that cannot be underestimated; either way, win or lose, it is a positive for Ireland and constitutes a huge opportunity. This is a battle between the future and the past.
The future is an Atlantic Ireland, an essential mercantile part of the global supply chain, home to the largest and most innovative companies in the world. This way lies prosperity.
The past is the EU Commission with its vindictive misunderstanding of the relationship between global commerce and an outdated notion of the nation state. This is history. We should not care a jot about what Eurocrats think of us.
The reputation that matters is the one inside the heads of the people who make the modern global economy spin, not the views of outdated bureaucrats who still see the world through the prism of countries and state aids. That is a typical 1970s view of the global economy that doesn’t take into account global supply chains where no one location wins outright.
When you are faced with people who live in the past, the key thing is to move on.
Before we assess this unique opportunity given to us on a plate by the EU Commission, rest easy, because we win either way.
If we lose the appeal, Ireland gets a windfall of €13bn, or about €2,600 per person. This is enough to wipe out our budget deficit for years to come, spend on what we will, or use in another way, which I will explain a bit later.
If we lose, we will be seen by corporate America as its only friend in Europe. This is exactly where we want to be. It is not pretty, nor heroic, but it’s realpolitik. When you have no capital base, you have to borrow someone else’s. How do you do that? You make the place attractive for other people’s money and you do that by taxing it modestly. It’s time for Ireland to think strategically in a post-EU world. Now Official Ireland will be getting its knickers in a twist over the admonishing from the EU Commission, but that’s because Official Ireland is captured and is pathetically insecure about our place in the world.
The “good room” mentality permeates the political corridors of power, where they care about what the EU apparatchiks think of us. We are constantly trying to please them, when we should realise that they are coming after us. Remember, no EU functionaries ever created a single job in Ireland. They don’t matter in reality.
If, on the other hand, we win the appeal, we lose the windfall €13bn but we will have enormous credit in the bank with the multinationals and the American government. We have the opportunity to reset the relationship between Ireland, the national state, and these corporations that will make us rich.
Ireland’s future is being the location of choice for large companies’ supply chains. We are half way between America and Europe and we should keep a foot in both camps. It’s really that simple.
Small indigenous Irish business can then service these American companies, creating symbiotic relationships. That’s the game plan. Historically, the precedent is the medieval Adriatic city-states of Venice or Dubrovnik or the free-trading Hanseatic cities of the Baltic.
Let’s not forget, without multinational investment, Ireland would be Albania with brutal weather. The multinationals have completely transformed the capital base of the country, totally upgraded the type of careers that are available to people here and plugged Ireland into the global economy in a way that is impossible to quantify. In short, they — not the EU — are the key to Ireland’s economic modernity. The future is the smartphone, the technology and the Silicon Valley way of looking at the world.
Ask any 20-year-old on the street what means more to him: the iPhone 7 or the EU Commission? I don’t ask this facetiously, but pose it because one image is the future and the other — with its pompous councils of ministers and briefing papers — is the past.
The choice is ours. Are we going forward or going backward?
So let’s look forward and see this as a brilliant opportunity to change the relationship between Ireland and the multinationals. Why not propose to the multinationals that we work together to evade the vindictiveness of the EU Commission and create real wealth for the Irish people?
Irrespective of what the EU thinks, multinational investment is going to continue. So unless the world abandons globalisation, money is going to continue to flow around the world.
The proceeds from multinational activity that go into Irish people’s pockets is modest. The take from wages and corporate tax is only a fraction of what goes back — as dividends and higher share prices — to the shareholders of companies operating in Ireland. So it is shareholders, rather than workers or the exchequer, who are winning.
Why not let host jurisdictions become shareholders in the companies that are making profits and distorting GDP figures? Rather than taking all the money in tax, why not take some in shares and invest it? Let’s be smart. Why not treat wealth associated with foreign capital as an annuity that accrues annually, much like wealth connected to an oil find?
By taking shares in multinationals, Ireland could create a sovereign wealth fund linked to the performance of the best-governed companies in the world, which would provide for future generations. In 2012, US multinationals made $100bn profit in Ireland, on which they are supposed to pay 12.5pc tax, or $12.5bn. In fact, they paid $4bn.
Why not encourage multinationals to pay the difference between what they pay and what they ought to pay in shares? Shares are permanent wealth, whereas taxes are transitory income. This is also attractive because shares or share options are cheaper for the company than giving cash. They already give their employees share options, so why not their host country?
So why not say to Apple and other multinationals, if the EU is going to be vindictive and retrospective, why not pay Ireland the difference between what you have paid us in tax and what you ought to have paid us, in shares?
Start with the Apple €13bn and see what else the EU turns up. This is a lot of money. Then apply this half share/half tax formula across the board.
Imagine a Fortune 500 Irish sovereign wealth fund, diversified across sectors operating in the Irish economy, with stakes in corporations such as Apple, Google, Facebook, Pfizer, Intel, IBM, Microsoft and AerCap.
Now we are talking in the future tense.
Orwell was right. Ireland will be part of Oceania not Eurasia with our neighbour Airstip One!
Peter
“This is a battle between the future and the past.” DMcW “In the wake of Brexit, there is a political dimension to this that cannot be underestimated” DMcW “1916: What did it mean? What does it now mean in 2016?” Andy Mooney Not so fast, Paddy! Those ‘gallant EUro allies’ have plans for the Atlantic sea-board and Ireland Inc is now just a pawn on the Brexit chess-board. Here’s a few brief pointers as to the geo-political/historical nightmare by which the idiotic political and cultural leaders, fake ‘soldiers of infamy’ and suited/booted IFSC Trojan Horse EU fluffers of the 1st… Read more »
[…] http://www.davidmcwilliams.ie/2016/09/01/eu-is-a-thing-of-the-past-our-future-is-with-an-atlantic-ir… […]
The Minister for Finance Michael Noonan had the gumption to come on the RTE news yesterday and claim that the 13 Billion he was NOT going to seek is equaled by the tax revenue that 380 workers in Apple in Cork contribute or have contributed. Doing some maths this works out at 35 million per worker on average. This to make sense if you said the tax take was 50% for Apple would have to have paid in total wages for the period in question (13-14 years) of 70 million per worker, or about 0.5 million per year or 10,000… Read more »
Ireland left the old empire when it became transparently obvious that the leadership in Westminster where clueless. Getting involved in WW1 (it could have been prevented, but the British leadership completely overestimated the military effectivness of the Tsar’s generals) was a massive blunder in British policy. Britain won, at the expense of having the Americans run the “free” world since. And now it is becomming apparent that the leadership of the new imperial racket in Brussels are clueless. The EU is a policy making monopoly. The British Empire was a policymaking monopoly also once. The American colonies were not involved,… Read more »
[ The “good room” mentality permeates the political corridors of power, where they care about what the EU apparatchiks think of us. We are constantly trying to please them, when we should realise that they are coming after us. Remember, no EU functionaries ever created a single job in Ireland. They don’t matter in reality. ] 100% correct. To the point of being a wake up call. The EU is run by amateurs. Forget about calling it the Habsburg Empire 2.0, because Habsburgia 1.0 was a cultural and economic success even it it was undermined by militarism from Berlin and… Read more »
David has written two very good columns in a row, in which he points out to two issues which directly or indirectly affect us all: housing and Ireland’s relation to the EU Commission. I would like to draw readers’ attention to a third option for Ireland (first two are recovering 13bn from taxes or the tax haven reputation that Ireland offers the US) and the precedent that the Irish politicians should look closely into: in September last year, the EU Commission unveiled a refugee relocation plan aimed at distributing some 120,000 people from Italy, Greece, and Hungary. Prior to that,… Read more »
I would like to use this opportunity to comment on Dr Kevin McCarthy’s insincere letter to the Irish Independent (August 30), in which he writes “To universally portray a vulnerable ethnic minority as responsible for the actions of a state whether real – as in Israel’s case – or imagined – as in the case of an Islamic caliphate – is racism of the worst kind.” Dr McCarthy’s hypocrisy just beggars belief, considering that he is the very same person who published a Polonophobic and slanderous article in the Belfast Telegraph (“Poles can’t deny role in Auschwitz”, September 16, 2015)… Read more »
Our future is with Atlantic Ireland. Whether we like it or not. Ireland isn’t going to win any arguments with the EU Commission. We know that. Hoping that Ireland will get “credit” from the multinationals for appealing the EU ruling is the attitude of a lackey. Which is why Ireland is where it is. They should appeal anyway because it is an attack on sovereignty. But Ireland needs to grow and stop being dependent on others. The EU or Apple/Google. The focus should be on creating indigenous companies. Those multinationals will leave when the spreadsheets dictate. Which could be right… Read more »
The EU is not going away quietly. The Euro is perhaps the death rattle!! But the EU could survive in a modified form, as a trading block, which was as it was originally sold to the nations of Europe. That is sovereign nations cooperating in their own self interest rather than being coerced by a kleptocracy/bureaucracy not of their own making. Beware to close an alignment with the US as the US elites pursue their own agenda of self interest. A Strong Europe is not in the best interests of the US. A Europe divided and scrapping with Russia is… Read more »
Breaking news
The Baltic Dry Index charts the cost of freighter transport for goods. It is at a very low level reflecting the world wide recession.
http://investmenttools.com/futures/bdi_baltic_dry_index.htm
It has just been reported that the south Korean Line is in receivership. 75 of the worlds cargo capacity is now frozen. supply chains are cut and those expecting delivery are not getting the goods.
http://www.zerohedge.com/news/2016-09-01/supply-chain-contagion-arrives-hanjin-bankruptcy-roils-global-trade-freezes-ships-ra
Is this the kick that turns recession into Depression.
http://www.jsmineset.com/2016/09/01/can-the-rig-survive-an-economic-war/
Not only is Deutsche Bank bust, (shares down 80% and the holder of a huge derivative position) but it sells gold, to an exchange traded fund, it does not own.
https://www.rt.com/business/357890-deutsche-bank-gold-germany/
“We win either way”. In the short term, maybe, but if we lose the appeal and get forced to accept the windfall, we also lose a lot of our future allure to MLCs. Especially when they look over the sea to the UK, no longer under the boot of Europe, also with a well-trained English-speaking workforce and a reasonable infrastructure.
That may be what’s bothering Noonan. That, and the worrying calculations of what to do with the 13 billion. He’s not used to giving money BACK to the taxpayers.
Ireland’s European Commissioner Phil Hogan has strongly backed Brussels in its €13bn tax ruling against Apple.
The former Fine Gael Cabinet minister and key ally of Taoiseach Enda Kenny confirmed he supported the finding of illegal state aid being granted to Apple.
The development came as a furious behind-the-scenes row broke out between the Department of Finance and the Taoiseach’s office over who is to blame for the Government’s ham-fisted response to the crisis.
It’s getting embarrassing again People. Glorified County Councillors and Victorian Boffins………
Ireland needs to be very careful as that 13 billion Euro is a poison chalice of monster proportion.
The Germans are using the crisis within Europe to clear up a lot of outstanding issues i.e. Ireland’s Tax treatment of US Multinationals and the perceived competitive advantage they garner from same as they compete for Business within the EU.
http://campaign.r20.constantcontact.com/render?m=1101357242253&ca=cdc537d3-fd6e-4af6-b1bd-de8556bb882c
Lots of good reading here
“It appears to me that if this doesn’t end soon central banks will own ALL assets and will have taken ownership of everything with … virtually NOTHING!
—–Mike Savage.
Grzegorz,
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Further to ur suspicions that Mairine Le Pen not being truly for France ;
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http://aanirfan.blogspot.com/2015/12/french-election-rigged-marine-le-pen.html
Hi, Great article and yet again highlights the undemocratic nature of the e.u. commission. However I did not hear the government telling the e.u.to get stuffed when they forced them to bail out privately owned banks, they were silent when the e.u said we couldn’t have a building programme for our homeless and they have do far said that if the e.u.commission wants us to charge for water then we will have to charge for water! Why should Apple be a red line area? Companies don’t build countries David, people do and unless this government starts investing in all its… Read more »
Brexit moment yet so why do we have to whore ourselves by letting companies like Apple with 200 billion cash reserves pay 50 euro in every 1,000,000 that they make in profits.Can they not at least pay the 12.5 percent rate? As to taking shares from companies to create a wealth fund for the country I like the idea of a wealth fund like Norway has but how do you choose whose shares you take and whose you don’t? But are we only talking blue chip companies our any company floated on the stock exchange? Would this not be against… Read more »
Are you cheerleading for the greatest purveyors of Aggressive War on Planet Earth, David?
Be careful, or the person standing in the dock in the New Nuremberg may be you!
My contrarian gene kicks in and says we should align with Russia and China.
America – like Britain, Europe and the expanded EU – is the past.
Another point of view on those who persist in perpetrating inequality in the name of transnational corporations dodging taxes ====== Tax avoidance by multinationals contributes to inequality and is in political firing line Worldview: Response to Apple tax claim must reflect the changing global mood http://www.irishtimes.com/opinion/tax-avoidance-by-multinationals-contributes-to-inequality-and-is-in-political-firing-line-1.2777497 The debate over Apple’s taxation liabilities in Ireland must be put in a worldwide context of growing social inequality and the revolt against it, if it is to make sense here. But the instinctively defensive reaction by official Ireland to the Apple ruling reveals a mindset still locked into the tax competition model which… Read more »
Spotted this link in another website ;
https://fellowshipoftheminds.com/2016/09/01/bankruptcy-of-hanjin-shipping-worlds-7th-largest-container-carrier-will-impact-global-economy/
TRUMP ON IMMIGRATION
https://youtu.be/oaF_NwVbIgo?t=2381
Affects all peoples
Medical opinion on many Vaccines
https://www.facebook.com/LegacyTalkTV?pnref=lhc.friends
The eu may be a thing of the past but the ECB is not. together with other central banks it is exercising the “end game” . That is to control the world through one central authority. This is likely the BIS or Bank of International Settlements. Central banks produce money form nothing and put it into circulation by buying bonds and more recently equities as well. So What? The money used cost the central banks nothing but a digital entry. De Nada, NOTHING. They buy national and corporate bonds. The bonds default and the bondholder ends up with the assets… Read more »
Tony Brogan,
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I posted a solution above — September 4, 2016 at 8:24 am — to ur many a year problem for accessing posts of a given day.
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Regards,
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Truthist
More Sore-Ass for yee all here ;
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http://yournewswire.com/son-of-soros-comes-out-of-the-shadows/
Ominous about forthcoming USA Prezzie Election ;
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http://henrymakow.com/2016/09/Could-DHS-Steal-2016-Election.html
I followed this link on account of the Ron Paul observation given in this excerpt ; ‘Trump’s family history including the illegal and financially fraudulent business associations and practices of his father are inconsistent with the vision of a self made man ready to wrestle America back from the “globalists’, communists and leftists obviously in political show-positions of power. Had Trump been a real threat to this monstrosity he would have been “Ron Paul-ed” at the beginning, with the Fake News Networks failing to give Trump TV time, and his election numbers in the primary would have been rigged to… Read more »
According to a friend of mine who had dealings with Eoghan Harris in the socialist / union scene in Cork City ;
“Eoghan Harris is an intellectual snob”
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The Phoenix Magazine since a long time has been given to calling him Eoghan HARASS ;
“Harass” would describe some of his debating & scribing technique.
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It’s a wonder he does not perform in a theatrical version of “Kind Hearts & Coronets” given his predilection for changing his garb ;
“Turn-Coat” that he is.
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http://www.telegraph.co.uk/culture/film/5788804/Kind-Hearts-and-Coronets-60th-anniversary-of-a-classic.html
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https://www.youtube.com/watch?v=fYTxIw6kjZ0