Last month, Amazon launched a contest for its second American headquarters, causing an unseemly bidding war among cities. Tucson tried to send the company’s chief executive Jeff Bezos a giant cactus. Tulsa recruited 50 people to examine videos of him to work out ways to court him. Philadelphia said it would overhaul its tax system. Detroit pledged to relax immigration laws. The prize is a $5 billion investment and 50,000 jobs.
In Ireland we recognise this culture of corporate welfare only too well. Our State agencies fall over each other to offer incentives to conglomerates to do something they were planning anyway. The jobs prize is a fraud, because whichever country wins this time or the next, the firm wins every time. How much of a victory is it when workers appear to be the main part of the multinational paying taxes to fund public services?
Last month Taoiseach Leo Varadkar met Apple executives concerned that planning laws were stalling its Athenry data centre. What is extraordinary about the talks is that the High Court had yet to rule on an appeal against planning permission. Varadkar told the tech giant he would consider changes to the strategic infrastructure Act to speed up the planning process for “large-scale projects”.
Legal fees
It’s bizarre to find the Taoiseach sitting down with a private business ripping into democratically created laws while a case is still before the courts. But when a multinational is concerned, nobody blinks an eye. In 2014 Apple paid a rate of tax on its profits of 0.005 per cent. Ireland is fighting the EU’s demand that Apple pay the State €13 billion in back-taxes. Already, €3.6 million worth of tax money has been spent on legal fees. It also emerged the land its data centre is to be built on was provided by another State instrument, Coillte, via a deal with the IDA.
A reprise among Varadkar and his Fine Gael Ministers admonishes people who pay for nothing but want everything for free. It’s tied in with the hysterical campaign to catch small fry welfare fraudsters. Multinationals are the real freeloaders. They get massive tax exemptions, a workforce curbed by insecurity, an infrastructure and public service funded by workers, light regulations and easy access to lobby Government officials. They even get free legal services when the EU calls out what it finds to be their illegal tax arrangements. And new for 2017 – promises to redraft laws that don’t suit their expansion plans. Meanwhile, tax-paying small businesses calling for broadband are ignored for 15 years.
The IDA has become a concierge desk for multinationals, answering to their every petulant demand with a manager always on hand to hear complaints personally. The conglomerate occupies the top floor of the Grand Ireland Hotel, the bill picked up by everyone in the floors below. The staff who bring them room service thank them profusely for the opportunity to do so. The lights are kept on by the taxes paid by the tired staff, who warn management to do whatever is possible, regardless of the cost, to ensure their feted guests never check out and move to a cheaper motel down the road.
Adherence to law
All over the world, democratic governments are struggling to control tech firms that boast “disruption”. Facebook fought the US government’s Russia probe. It relented not because it had to, but because it chose to, because they always have the power. Google is battling an investigation over “extreme” gender pay discrimination. Airbnb undermines tenancy rights, while Uber’s disruption perfectly shows how many firms set out to crush traditional operators hampered by their adherence to the law.
So what are we getting in return? Jobs? Tech giants only offer us the low-hanging fruit, preferring to leave top-tier positions in Silicon Valley. On the odd occasion a big executive moves here, they get yet another tax deal, with 30 per cent of their salary exempt from income tax. How can you claim to support Irish jobs when you charge ordinary workers over half their pay in taxes but the firm itself only 0.005 per cent? Don’t forget joining a trade union is dissuaded.
Creating jobs is important, but not at any cost. Governments, by the nature of politics, have short-term vision, so they’re oblivious to the questions being asked by fixed workers of mobile capital. Money is fluid but employees are not, and capital is constantly seeking ways to remove costly and unreliable humans from the chain. We’re heading for a future where fewer companies will control more services and contribute less, but futures can change when the will begins to turn.