By Dean O’Donnell
A recent economic study revealed Ireland as likely being the largest tax haven in the world. Jointly carried out by academics in Berkeley University and the University of Copenhagen “The Missing Profits of Nations” estimated that €90 billion of corporate profits were channeled through Ireland in 2015, more than all of the islands of the Caribbean combined – the countries that usually spring to mind when we think of tax havens…
This is part of a global trend that saw an astonishing 40% of the €1.45 trillion in multinational corporations’ profits being stored in tax havens across the globe, guarding the profits of an increasingly parasitic capitalist class.
Such figures are a telling insight into the nature of capitalism today and the staggering inequalities it continues to breed. The report showed how, in Ireland, for every £1 foreign corporations spend on wages they declare £8 in profit, a shocking 800% profitability ratio and 16 times above the average for non-tax haven countries.
Just like the Panama and subsequent Paradise Papers, the study confirms what young people and the working class experience on a daily basis; that capitalism is a deeply unjust system incapable of meeting their most basic needs while at the same time, generating absurd wealth for an elite 1%. Important to remember is that the majority of this tax avoidance is not illegal but is actively encouraged by the policies of Fianna Fáil/Fine Gael and countless other neoliberal governments and institutions. A stark reminder of whose interests this system is built to serve.
The Department of Finance were quick to respond, rejecting the findings and particularly taking issue with the labelling of Ireland as a tax haven for it allegedly “does not meet any of the international standards for being considered such.” But these are standards set by the OECD and other think tanks of the global capitalist class. Whether a country has a zero tax rate or pathetically small one makes little difference – the figures speak for themselves, and the fact that Apple were granted a sweetheart deal in which they illegally avoided paying €13 billion in taxes should make Ireland’s status as a tax haven unequivocally clear.
Cooking the books
This rejection of the report’s findings should come as no surprise seeing as it completely undermines Fine Gael’s narrative of economic recovery incessantly pushed over the last number of years. With little of the wealth created in Ireland actually being reinvested here, the frequently quoted rise in GDP is an inaccurate reflection of the economy’s health. Any sense of a return to stability for certain sections of society is built on shaky foundations.
Of course, the claim from the Irish capitalist establishment is that such mollycoddling of multinational corporations is the only viable economic model, one we will all benefit from if we just wait. In reality it is this very model that has engendered the social decay we are currently witnessing: a housing crisis that sees 10, 000 people homeless, a healthcare crisis that in the month of May, left 9,000 waiting for hospital beds on trolleys and 70,000 more children living below the poverty line than in 2008. This is the true face of Varadkar’s ‘Republic of Opportunity’ and makes the need for an anti-capitalist and socialist alternative such an urgent necessity.