I’m sitting in Finnegan’s pub, 100m or so down from the train station in Dalkey — a village about 15km from the centre of Dublin — Googling "Apple tax" and feeling thoroughly compromised. I’m using my Apple MacBook Air for the Google search, and my Apple iPhone is on standby.
A few days earlier Margrethe Vestager, the European commissioner for competition, dropped a bomb when she told Ireland’s government to claim €13bn of state aid back from Apple. This was the estimated value of the tax Apple had avoided through using a contrived tax structure. There is also €6bn or so of interest that has to be claimed back.
The immediate impact on the Irish was not as earth-shatteringly dramatic as President Jacob Zuma’s decision to "redeploy" Nhlanhla Nene had been on South Africans last December. But for the Irish the longer-term consequences could be a lot worse than those SA faced nine months ago.
Thanks to the canny and unlimited energy of Pravin Gordhan and the determination of a vigorous civil society, SA’s future now looks a lot better than it did on December 10 2015. (It was already looking a little better by December 15.)
The same cannot be said for Ireland. Government seems clueless about where to go from here other than to appeal against the ruling. An indication of just how out of tune the Irish were with EU sentiment is that the fine is more than €12bn above what they expected. The ruling could turn Ireland’s relationship with the EU on its head.
Vestager has atta cked a particularly egregious example of state-backed aggressive tax management, but the fear in Ireland is that the Apple case will drive efforts to create a common tax policy in the EU.
Meanwhile, Apple’s Tim Cook goes blithely on launching new glitzy products. He is comforted by the realisation that if his dodgy double-Irish scheme is blown he can move on to some other willing co-conspirator.
Cook is utterly convinced of the hypnotic allure of Apple’s wares and realises this shelters the richest company in history from having to take any responsibility for its anarchic behaviour. His products are the 21st-century equivalent of the opium of the masses, which means this US$555bn market-cap company can continue to deprive countries a fraction of its size of their rightful tax without fear of the only effective obstacle — a powerful consumer backlash.
Cook says Apple has done nothing unlawful and he is, of course, right. That is the really grim part of the story. That Apple hasn’t contravened any law is largely because it and its fellow multinationals have played a prominent role in putting those laws in place. It was able to build up a $200bn stash of cash because countries worldwide are willing to enter into tax treaties with the likes of Ireland. It has been helped by the bizarrely old-world notion of tax confidentiality. Not only does the tax-paying public not know precisely how Apple managed to keep its tax rate to just 0.005% for so many years, but even Vestager’s 150-page ruling could not be released to the public. Tax management has apparently become as competitively sensitive an issue as product design.
All of this is why Apple, rather than the likes of Germany’s AfD party or France’s National Front, currently represents one of the greatest threats to globalisation. It represents the utter manifestation of all that is wrong with globalisation. A company that is far too powerful to be restrained by individual nation states (even the US) becomes a law unto itself. It is so big it doesn’t even have to threaten and bully to get its way.
It justifies its obsession with accumulating an ever-larger mountain of profit by reference to shareholder capitalism, which implicitly doesn’t allow it to do anything other than avoid tax and maximise short-term profit.
And guess what? The bulk of the $200bn stash will end up in the pockets of the global elite. The rest of us will keep using our Apples to Google "Thomas Piketty" and "terrorism".