EU Ruling on Apple: Time for a Second Irish Rebellion?

The End of Tech-Friendly Ireland? DUBLIN, August 31—This is turning out to be quite a fascinating week to be in Ireland.

Everywhere one goes in Dublin, there are commemorative posters, exhibits at every museum, and year-long special events marking the centennial of the 1916 Easter Rebellion, when Irish republicans rose up to fight the British for independence. Quickly and brutally squashed, the Rebellion was nevertheless a watershed for the cause: Britain’s summary executions of the rebellion’s participants and harsh reprisals following turned the tide of Irish public opinion, with the separatist Sinn Féin party sweeping the 1918 elections, leading to full independence four years later.

Today, “New Dublin” is bustling, both sides of its river teeming with cranes adding to the already glittering corporate headquarters of America’s brand names: on one side, the financial services giants; on the other, a veritable Silicon Valley annex, home to the European headquarters of every tech firm—from Apple, to Google, Facebook, Twitter, Airbnb, and more.

Indeed, the new daily nonstop service we enjoyed between San Francisco and Dublin reportedly resulted from Google’s convincing Aer Lingus that the route would be as popular as it has proven.

Until today, one could have been forgiven for wondering why any firm would any longer headquarter in the U.S., given its confiscatory 35% corporate tax rate vs. Ireland’s business-friendly 12 1/2%.

Ireland had also forecast windfalls from Brexit, as firms currently located in London seek out Dublin for their new E.U. base.

Clouds instead now mar that vision, with the E.U.’s ordering Apple to pay Ireland “back taxes” of €13 billion, plus interest, under the guise that Ireland’s favorable tax rates constitute illegal “state aid.”

In response, the Irish government is rightly alarmed at what the ruling portends. In a briefing obtained by The Irish Times, the Government believes it would be “irresponsible and extremely short-sighted to consider the European Commission decision as a windfall for the State.”

Keeping the money would mean accepting the commission’s hugely damaging analysis; agreeing that Ireland provided illegal state aid; accepting the commission’s encroachment into sovereign tax rights; and creating huge uncertainty for business in Ireland.

Rightly so. The ruling, allowed to stand, threatens every firm headquartering its European operations here, essentially sentencing Ireland to the economic malaise prevalent across the Continent.

On this 100th anniversary of the Proclamation of the Irish Republic, its terms seem more apropos than ever:

We declare the right of the people of Ireland to the ownership of Ireland and to the unfettered control of Irish destinies, to be sovereign and indefeasible. The long usurpation of that right by a foreign people and government has not extinguished the right, nor can it ever be extinguished except by the destruction of the Irish people.

Ireland’s fortunes greatly improved in the aftermath of independence from England, and its current prosperity owes more to home-grown economic liberalization than to favors from Brussels.

And contrary to dire anti-Brexit propaganda, free trade has and continues to thrive all over the world without requiring a surrender of sovereign rights to unaccountable rulers. Perhaps it’s time for all its member-nations to reconsider what the E.U. hath wrought.

Mary L. G. Theroux is Senior Vice President of the Independent Institute. Having received her A.B. in economics from Stanford University, she is Managing Director of Lightning Ventures, L.P., a San Francisco Bay Area investment firm, former Chairman of the Board of Advisors for the Salvation Army of both San Francisco and Alameda County, and Vice President of the C.S. Lewis Society of California.
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