The Cedar Lounge Revolution

“Centrism”, opposition : Apple Tax issue redux. August 31, 2016

Pearse Doherty put it particularly well when he noted the following:

Mr Doherty argued the Government should “reach out” and collect the €13 billion as soon as possible.
“There is also an irony when we see an Irish Government challenging the EU Commission over this while we have memories of how they bowed down to the same commission during the period of austerity,” he said.
He said the net effect was that Apple paid an effective tax rate of 0.05 per cent on its global profits.

Interesting. In addition to SP and PBP, the SDs, GP are also saying the ruling should not be appealed.

The framing too is not uninteresting. Take Pat Leahy in the IT today. He writes:

The cacophony of demands to grab the cash and spend it was entirely predictable.
People Before Profit TD Richard Boyd Barrett raged that the”entire political establishment have colluded over many years with Apple in an act of economic treason to rob the Irish public of €13 billion or more in desperately needed cash for public housing, the health service and other vital public services.”

And:

Sinn Féin has been waiting with some relish for the EU verdict and leaped into action. “Give us back our money,” demanded MEP Matt Carthy. For good measure, Sinn Féin finance spokesman Pearse Doherty also called for a public inquiry into Apple’s tax arrangements.
The best can be said of all this is that at least the people doing it know its just political grandstanding. Well, this is one of the luxuries of Opposition.

But hold on. Boyd Barrett is absolutely correct. And it should be a cause for anger. Doherty is absolutely correct too to call for a public inquiry. Leahy though is dismissive even as he then writes;

For all that, even a cursory reading of the commission’s findings demonstrate that it is clear that Apple – like other multinationals presumably – has constructed a series of contrived structures designed to pay as little tax as possible. All the tech giant’s platitudes about paying the tax it owes are simply public relations guff. They are not meant to be taken seriously except by the gullible. The point at issue is not whether Apple has these structures, it is whether they constituted illegal State aid or not. That will now be decided in the European courts.

What does Leahy expect politicians to do in light of that? And there’s a sense of having his cake and eating it too for earlier he wrote:

Minister for Finance Michael Noonan has long since said the Government would appeal an adverse finding by the commission on Apple’s tax arrangements. That was one thing when everyone thought the bill would be a few hundred million, or – at most – a few billion euro.

And just on that, why so dismissive of a ‘few billion euro’? We’ve had budgets where a ‘few billion euro’ would make a considerable difference. Leahy at the SBP and many others were quite clear about the negative impacts as they saw it of increasing taxation or expenditure.

Educative to see how rapidly matters change.

And this is educative too.

The furious debate thrown up by the decision exposes again one of the principal fault lines of Irish politics – between the (roughly) two-thirds of voters who vote for mainstream, centrist parties and Independents, who feel they have a stake in the country and its prosperity on the one hand, and those who vote for parties of the radical left, anti-establishment Independents and Sinn Féin on the other, who feel the State often conspires against them, and that politics ignores those like them. Political debate is between these two sides; but political and electoral competition is more usually within them.

Does Leahy genuinely believe that the critique put forward by SF, PBP, the SDs, GP etc isn’t shared more widely? Does he think that ‘centrism’ will lead to a supine acceptance of what is a frankly disgraceful situation, one which it has taken – of all entities, the EU Commission to point up to an Irish government and establishment and its outliers who, as we see here, put forward a remarkably cynical view of the world and of the way they should and do operate within it?

For it appears Leahy in a way feels it appropriate to understate the importance of what this represents, almost but not quite a ‘nothing to see here folks’ line.

Doherty couldn’t have put it better when we read Leahy’s analysis. Clearly taxation is fine when levied on citizens where all are expected to pay in full but quite a different matter when levied on multinational corporations. Where now one wonders the earnest articles which we’ve been subjected to on how withdrawing from the water charges would undermine the authority of the state to impose its writ up the citizenry. How the government loses ‘moral authority’ not doing so. Etcetera. Etcetera.

British Labour and polling August 31, 2016

Seeing as we were looking at UK polling report it has to be said that current polling for the BLP isn’t great. Talking to a friend the other day they were saying that some they talked to seemed to think the LP could recover its position. Frankly I’ve doubted ever since the loss of Scotland to the SNP whether the BLP is in any position to mount a successful return in one election campaign.

Or to put it another way the likelihood of a Corbyn government has from day one been very low.

But, repositioning the BLP on traditional social democratic terrain is a project that would take some time too. And that, as noted here previously, is a project well beyond Corbyn. That said there’s some utopian stuff making the round about the BLP and just what it might become. I fear that some of that is due to a simple lack of knowledge of that party and its members. The idea it could tip towards proto-revolutionary stances is frankly incredible to many of us who’ve been members in the past. That’s just not going to happen, under Corbyn or not. The best that might happen is a position some way to the right of its early 1980s incarnation. That is a push to some renationalisations, some amelioration of labour and other legislation. But beyond that?

Labour is the single largest oppositional force in British politics. That gifts it some momentum, but also inertia. A mass split is neither desirable nor feasible. It’s telling how voices have softened on the right. I’ve noted too the point that deselections of sitting MPs sound great – from a distance. But once on the ground… it’s a different matter. Electoral politics, and I’ve seen this numerous times, has a dynamic and a logic all its own. I’d be willing that short of a split the BLP in 2023 will have most of the same MPs, and membership, as 2016.

In any case, polls do matter. I’m of the opinion that given the turmoil in LP ranks the LP ratings are actually healthier than might be expected. But, and this has to be said, they’re not great. They’re certainly not those of a party that is likely to see massive influxes of support any time soon. And that’s neither a cause of despair or rejoicing.

Brexit and UK public opinion? August 31, 2016

What is Brexit? What do people mean by it? This post on UK Polling Report is useful in terms of laying out the limitations of what may be feasible politically.

By 44% to 32% people thought it would be bad for Britain if we simply left and had no trade deal with the remainder of the EU. A Norway-type deal, with Britain joining EFTA and maintaining free trade with EU in exchange for free-movement, a financial contribution and following trade rules is seen a little less negatively (35% good, 38% bad)… but perhaps more importantly, by 42% to 32% people would see it as not seen as honouring the result of the referendum. Finally, we asked about a Canada-type deal, where there is no freedom of movement or financial contribution, but only a limited free trade deal that excludes services. That was seen as both honouring the result of the referendum, and as positive for Britain.

That looks like a pretty minimalist deal is the most-favoured option amongst the public. But, as Anthony Wells, author of the post, notes negotiations haven’t started, nor has their been any serious debate in the British media about them. And there’s a weird sort of duality in what discourse there is with some claiming that Brexit has already happened…

Redmond and Adams? August 31, 2016

What do people make of this, written in the IT by Ronan O’Brien, an advisor to the last government, a piece that seeks to make a comparison between John Redmond and Gerry Adams? I was particularly struck by the following line.

The difficulty is that while Redmond was open to a more positive association with Britain, Adams is not. Nor is he alone in that. Redmond, like Parnell before him, had underestimated the attachment of unionism to its British identity. But it is well established now. The challenge, post-Good Friday agreement and the consent principle, is how that British identity can be reconciled with a republican view that nothing positive emerged from our past membership of the UK?

Is any of that correct? Adams, as the author of the piece acknowledges, has been clear about being open to to ‘other arrangements’ than a unitary state. And as part of that would, inevitably, be links to the UK of some form or another during a perhaps very long, perhaps indefinite, transitional period. Adams, like many, may not consider that optimal, but recognising that the optimal is unachievable in the short to medium term is not the same as saying that he/they are not open to more positive associations.

And what then of the claim that republicans view that ‘nothing positive emerged from our past membership of the UK’? I’m a republican, I know some here also are, and others are not. But it would be a fairly unreconstructed example of the former who was so simplistic in their thinking as to believe nothing good came from that period.

But it’s also interesting because – in my reading of it – it evades a central aspect of republican critiques (in both large and small ‘r’ versions in relation to Ireland, and by the by I’d be an English republican too while we’re on the subject) which is about how political power is exercised and who represents and who is represented.

In other words it wasn’t simply the issue of being a member of the UK or whether there were positive or negative aspects of that ‘membership’ but what that entailed, a more rather than less inevitable democratic deficit, loss of sovereignty, local representation, democratic representation and so on.

And he completely ignores the reality today that in Scotland those issues still loom sufficiently large, even in the context of a more advanced British polity, to power the representation of the SNP – perhaps not quite to the point of rupture with the UK, but certainly to a devo-max situation.

Nor is it particularly difficult to see a certain softening of north-east/west identities between NI and the UK still being entirely possible in the context of an Ireland that is shifting towards a unitary state situation.

Ironically if anything is putting that last at risk it is the threat of Brexit, an almost entirely home-grown English political dynamic.

Notable is the lack of an actual example of how that reconciling of British identity and Republican views might be achieved. Is he talking about rejoining the Commonwealth, or some other all islands (plural) representative structures or something else entirely. Does he think that the only barrier to these are Sinn Féin? And would they be of any particular utility?

His last line is interesting for it seems to swerve off on a different tangent entirely:

It is a while since the Irish State or politicians grappled with these issues. We talk about the financial obstacles to unity but surely when there is a will a way can be found. It might be that we find the cultural challenge too demanding?

It is difficult to know precisely what cultural challenge that is. It certainly won’t be for want of trying on the part of some. But it surely won’t be made easier by the indifferent to Ireland but far from positive dynamics of English nationalism.

A government in trouble? August 31, 2016

As noted yesterday by SoS, events are overtaking our beloved government coalition. And how:

Independent Alliance Ministers were undecided last night on whether they would support the proposal from Minister for Finance Michael Noonan to appeal yesterday’s ruling from the European Commission which directed Apple to pay €13 billion in back taxes to the Irish State.
The Cabinet will meet this morning to discuss the ruling. Mr Noonan will seek formal approval for the decision to appeal the directive but Fine Gael Ministers have already said repeatedly that the decision will be appealed, a position also endorsed by the Taoiseach.

And:

If the Independent Alliance Ministers do not agree to the appeal, it will place the future of the Coalition Government in immediate jeopardy, according to sources in Fine Gael.

Certainly this throws a mighty spanner in the works. And it is an absolute gift to the opposition. Any predictions on how it will go? Will the Independents support the proposal?

What you want to say – 31st of August 2016 August 31, 2016

As always, following on Dr. X’s suggestion, it’s all yours, “announcements, general discussion, whatever you choose”, feel free.

That Apple tax verdict… August 30, 2016

What telling contortions we are seeing. Already, as noted here today by IEL, the LP is rowing in with any government appeal.

And here’s the IT editorial arguing that:

The Government will argue – and there is a basis for this – that rule changes in recent years have closed off some of the tax arrangements central to the Apple case.

However the damning verdict by the European Commission on how tax was applied in the Apple case left it with little option but to lodge an appeal, given the central importance of foreign direct investment to our economy. As Apple will also appeal, a lengthy legal process is inevitable.

There’s more:

Big US companies have used the interplay of European and US tax laws to pay very little tax on profits earned in European markets. Ireland’s tax system is only a part of this and, in fact, much of it is based on the peculiarities of US tax law.

Hmmm… it’s not me Ireland, it’s you US – eh?

And yet the IT has to admit:

There is no doubt that this needs to change and that the amounts paid by many of these companies has been indefensibly low. It remains to be seen, however, if the European courts support the Commission’s drive to address this problem via state aid rules.

Fintan O’Toole has a markedly better line here.

Not least the following:

At the very least, we should not be railroaded into lodging an appeal against the ruling that will define us, for the rest of the world, as the tax-avoider’s crazy little sidekick. We have some big thinking to do – and the cabinet’s job on Wednesday morning is to open up that process of deliberation, not to insist that any democratic decision that Apple does not like is unthinkable.

Taxing times… August 30, 2016

Well now. Reading Brian Keegan’s column on taxation in the SBP I was struck by his critique of David Cullinane, the SF TDs, recent comments that:

…it is blindingly obvious that with 68 per cent of all companies liable for corporation tax in 2015 “Subject to a tax rate of zero…the law is the loophole”.

Unlike speculation regarding the existence of little green men, the TD’s comments are a response to official figures obtained by him on foot of a parliamentary question. They merit some analysis. Why did more than two third of companies pay no corporation tax in 2014.

Before everything, fascinating that he feels the need to conduct this exercise, isn’t it?

Anyhow, away we go.

First up he argues that:

From a tax point of view it is usually cheaper to pay profits out as salaries and pay income tax, PRSI and USC on those salaries than leave accumulated profits in the company. No profit int he company no corporation tax gets paid.

Secondly?

It’s also necessary o think about what companies actually do… sometimes companies are used to put a structure on charitable activities and as such re expect from tax. Many companies, even if not charities, are so-called not for profit ventures… trade associations and the like run for the benefit of their members… the voluntary and semi-state sectors frequently operate through a company to meet legal or regulatory requirements… such companies don’t make profits and therefore they don’t pay corporation tax.

All very interesting. But one would like to know how many of each of these sub-categories there are. Unfortunately that not unimportant detail isn’t provided.

Still he continues by admitting to the fact that:

Then there are the controversial companies which are the target of most of the political and media comment, these would include companies which are Irish-resident but don’t have income which is charged to Irish corporation tax.

Interesting too how he shifts the spotlight away from Irish companies there.

Anyhow, praise of sorts for Cullinane:

To return to Cullinane’s comments, he did well to highlight the proportion of companies which re outside the corporation tax charge.

I don’t think though that it’s a loophole to make company profits chargeable to higher rates of income tax instead of lower rates of corporation tax. Tax loopholes arise when people pay less tax, not more.

And while he also admits too that there may be reason to look at charitable and voluntary sector businesses and where ‘Irish corporation tax starts and stops’ but… for there is a but…

By virtue of what so many of them do, many companies tend not to have profits with the tax charge, or pay them out so that those profits fall subject to income tax. That’s why two thirds of them don’t pay corporation tax.

It will be very educative to see where this discussion goes next. Good on Cullinane and his team for producing questions that elicit this sort of a response.

Political activism in the Facebook era… August 30, 2016

Michael Brennan wrote a piece on the rise of SF. And it was much as you’d expect. Matters getting more tricky, possible need to go into coalition with FF. Ten year strategy. And so on. But this was particularly interesting to me:

When SF was trying to build its support in the days of the Celtic Tiger, it was easy to get activists to turn up at branch meetings. It was their only outlet to vent their frustration at the political system.

But now, in the smartphone era, SF is finding it more difficult. ‘So many people think that having a rant on Facebook counts as activism. They feel satisfied and they are less likely to come to cumann meeting,’ said one senior party source.

I wonder is that true, whether of SF or of politically engaged people in general?

CLR Book Club – Week 1 August 30, 2016

It’s here, by popular demand. The CLR Book Club. But what are we to start reading?If we can gain a consensus below let’s give it a go. And is it a chapter a week, or what? I’ve never been a member of book club before so I don’t know. I’m going to post this thread up every Tuesday so we can use it to get things up and running, ideas, etc. Ivorthorne had some ideas, and Pasionario as well IIRC. I’ve one chapter of a book on right anarchism by Nozick which tries to engage with socialism and equality, and I’m sure there’s a heap of other ideas.

And just to say, can we have two books running concurrently or is that too much?