I have always been skeptical about the rave reviews on the covers of books. “I just couldn’t put this book down”, may have been the first part of a sentence that concluded, “the kitchen sink disposal unit”; “His best novel yet” , could have ended, “which, given his other semi-literate offerings is no great achievement”.
So, when Irish ministers recently insisted on quoting over and again an OECD survey praising the preservation of the 12.5% corporate tax rate despite the country’s ills, I dived for the survey to find out what it really said.
And what it really said was: “The decision to maintain the corporate tax rate at 12.5% is prudent as a sudden increase in tax rates would create uncertainty about Irish tax policy that could undermine investor sentiment.”
Now, before I go on, I must be fair to the Irish. They may have found themselves waist deep in the bog and requiring a bail-out by the IMF thanks to their outrageous housing speculation but, if there is one thing the Irish are really good at, it is austerity. And that is just as well, because that is just what the IMF and everybody else has demanded of them. They learned it from the British, who spent hundreds of years abusing their economy, and then spent the first sixty years of independence doing the same to themselves. As a result, the prognosis for the Republic, which has stoically accepted its position, is surprisingly good according to most economic indicators.
Having said all this, the new government’s November budget included two entirely understandable, but morally questionnable, tax elements. The first, as mentioned above, was a commitment to the 12.5% tax rate which – while, as noted by the OECD, may under current conditions be unavoidable – is obscenely low for a country relying on the charity of others and arguably gives it an unfair advantage over many of its EU competitors. The second, which received little publicity, was an incentive scheme for Ireland’s all-time number one export – people; tax benefits are being offered for Irish residents working abroad part of the year for Irish companies. The emphasis was put on the BRICS countries (Brazil, Russia, India, China and South Africa) which, given that they only comprise around 3 billion citizens, are obviously short of labor or, at least, will not notice another million or two Irishmen taking jobs that could have gone to the locals (I may be suffering here from a minor bout of Irish Exaggeration).
The Irish economy has always bothered me. I vacationed there with my family a few years back, before the Celtic Tiger tripped over its tail, and apart from coming close to being throttled by a petrol (gas) station manager in the border area for asking for a copy of the London Times (“We don’t like the British round here, you know”), we had a delightful time driving up and down the country’s only motorway admiring the myriad of signs advertising EU financed infrastructure projects. It seemed pretty clear that the country was not doing enough to build an independent economy for when the foreign multinationals get tired of relying on the tax rate and decide to move on. Should the Euro Zone survive, it will be interesting to see what happens to Ireland in the long term.
And, as regards those book reviews, I remember the late Auberon Waugh reviewing the results of a BBC poll of the “Best English Language Novel of the 20th Century” at the end of 1999. Tolkien’s Lord of the Rings and Orwell’s Animal Farm took second and third places. First place went to the Irish Joyce’s Ulysses which, Waugh pointed out, proved that the British are a nation of pseuds since hardly anyone manages to read it from start to finish. The writer Anthony Burgess (A Clockwork Orange) said on the cover of my (half-read) copy that “Everybody knows now that Ulysses is the greatest novel of the century”. History does not record whether that was the end of the sentence.
Happy New Year.