Being Libertarian Perspectives will serve as a weekly, multi-perspective opinion and analysis piece by members of Being Libertarian’s writing team. Every week the panel, comprised of randomly selected writers, will answer a question based on current events or libertarian philosophy. Managing Editor Dillon Eliassen will moderate and facilitate the discussion.
Dillon Eliassen: CNN reported, “The European Commission, which administers EU law, said the Irish government had granted illegal state aid to Apple by helping the tech giant to artificially lower its tax bill for more than 20 years.”
Bric Butler: Control over taxation is a fundamental sign of sovereignty, and the encroachment of the EU in this area particularly reeks of European federalism, a dream that many who desire a United States of Europe have long held. The commission is acting as an attack dog for nations like France that have worse business climates, that instead of improving their economy want others to be dragged down to their level by Brussels.
John Engle: It’s not really the Commission acting on behalf of France or any one country, to be honest. The EU bureaucratic mechanism has its own interest in tax harmonization that stands above any one national interest.
And some aspects of taxation are in the hands of the EU, based on powers ceded by the democratic governments. That is not an inherent lack of sovereignty, but rather a decision by governments in Europe to pool sovereignty. Whether one thinks this is a bad idea, or contrary to the interests of individuals, is one thing. But it is not the same as saying it is a fundamental contravention of sovereignty per se.
On the particular issue of Ireland, the reality is that Apple was exploiting a loophole in the Irish tax code, making use of differing definitions between the tax regimes of the US and Ireland. While that may seem like being unfair play, I am usually in favor of getting around taxes wherever you can.
The particular problem with this ruling is its retroactivity. It was apparently not enough that Ireland already closed the loophole Apple was using, but now it is being called unfair support by a government (even though it had been known for years). It can be dangerous to set such a precedent, as not many other companies have such vast cash reserves on their balance sheets as does Apple. Similar measures foisted on other companies could be lethal to the companies, and to the business climate.
Neil McGettigan: The EU may be going after Ireland as a way to punish the Anglo-sphere for Brexit. The whole of Ireland’s economic success in the last 20 years has been US tech firms opening their EU subsidiaries in Ireland. The EU is trying to flex its muscles to show that it still has power, but once again it’s only alienating people outside of Brussels.
John: I really don’t think it has anything to do with being punitive over Brexit. It may be trying to reestablish authority, but it is not confusing Ireland with the UK. Brussels knows full well that support for the EU runs high in Ireland. It would make little sense to punish it for what Britain did. Also, the issue is not so much Ireland as an attack on the way some countries do business. It was more a matter of convenience (though I doubt it will stand up to appeal anyway).
Ni Ma: Two words: Vindicates Brexit. It’s why everyone needs to Brexit. So that there is no stupid ass EU anymore.
John: I don’t think it does. To get into the EU single market you have to at least agree to the basic rules, which is what Ireland has been accused of violating. In or out, Ireland or the UK would have to follow that rule. The question is whether the rule was violated or not.
Bric: I’m working on an article which talks about the Dutch being the next country to leave the EU.
John: The Dutch would be even worse off than the British if they left, and they still want a single market. Their only real beef is immigration.
Ni: What about Sweden? It would be easier for them, I think.
John: They may well get a referendum. But it’s also important to realize that the Dutch have PR voting, so even if they were the biggest group they may not form a government (and in fact even then they probably would not lead a government, but offer support in exchange for a referendum).
Bric: Well, I think that would still be a win for them seeing that that’s their main policy goal right now.
John: It’s their only policy goal right now (hence their obvious reticence to actually try to lead a government).
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