Wednesday, 24 November 2010
Oppose Leinster House Consensus for Corporate Welfare
In the midst of the most severe assault on the living standards of the working class in the history of the Twenty-Six County state, a cosy consensus emerged in the corridors of power that business profits should be protected at all costs. Companies in the Twenty-Six Counties pay a scandalously low rate of corporation tax of just 12.5 per cent, with companies operating in the Irish Financial Services Centre charged a lower rate of just 10 per cent.
While the most vulnerable sections of Irish society, including the low paid and social welfare recipients; people with disabilities and the elderly face unprecedented savage cuts, the establishment parties were at one in supporting corporate welfare for private businesses.
In the same week that Irish Business and Employers’ Confederation [IBEC] publicly called for a cut in the minimum wage, which is currently just €8.65 [£7.30] per hour, their political representatives in Leinster House combined to protect the interests of the wealthiest and most cosseted sections of Irish society. The bosses are cynically using the current recession and the myth of competitiveness to drive down wages and working conditions, with workers being forced to bear the burden of the recession while bosses are permitted to maintain their profit margins.
Both multinational and native capitalists benefit from the low rate of corporation tax and, during the ‘Celtic Tiger’ boom, vast profits were made on the back of workers in Ireland; profits boosted by the low rate of corporation tax. IBEC spokesperson Danny McCoy has been a regular feature in the media, arguing that low paid workers should pay for the greed of his cohorts in the banks, while at the same time threatening a flight of capital if corporation tax is raised. There is no evidence to suggest that foreign companies will leave Ireland en masse if corporation tax is raised and the argument ignores the fact that native business also benefit from the 12.5 per cent rate. It is simple scaremongering in an attempt to keep workers cowed: threatening mass unemployment unless the insatiable demands of the corporate world are met.
While there has been much bleating and rhetoric from establishment parties in Leinster House about fighting the IMF, the same very same political parties shamefully bow down in the face of threats from native and multinational companies. The same parties failed to use the opportunity presented by the Fine Gael motion to, not only demand that corporations pay for a crisis of its own making, but also to demand an end to the numerous tax avoidance measures available to corporations.
These tax breaks include corporations being allowed tax write offs against losses; tax exemptions on dividends and distributions out of patent income and patent royalty income, the latter, according to a Twenty-Six County Department of Finance report in 2008, combined to cost the state €46 million [£39 million].
Corporations also benefit from the fact that there are no laws against transfer pricing [corporations operating in the Twenty Six Counties are allowed to declare profits at the low rate of 12.5 per cent through a transfer pricing mechanism] and can also avail of tax breaks on share dividends. Corporate welfare, it seems, knows no bounds.
On the same day that establishment politicians in Ireland fought doggedly to protect corporate profits and promote the continuation of corporate welfare, the New York Times was reporting that US companies had just recorded record profits, at an annual rate of €1.659 trillion [£1.4 trillion], in the third quarter of this year. According to the report this is the highest figure recorded since the US government began keeping records over 60 years ago.
While the working class are being driven into penury and are carrying the burden of private banking losses, the business class is filing record profits. Yet the political establishment in the Twenty-Six Counties refuses to even countenance an increase in corporation tax! Where, oh where, is our James Connolly?
No doubt the corporate world is comforted by the fact that all of the political parties in Leinster House are dutifully defending the interests of capital. The lack of dissenting voices against corporate welfare demonstrates that opposition to the IMF/EU and Dublin government’s class war must come from the streets.
A fitting tribute to Ireland’s revolutionary leader James Connolly would be to follow his actions and not misappropriate his words in order to defend the capitalist system. Connolly was a revolutionary who believed in nothing less than the revolutionary overthrow of the capitalist order. It is perhaps timely to recall his words and to take to streets in mass numbers this coming Saturday [November 27]:
“The capitalist, I say, is a parasite on industry; as useless in the present stage of our industrial development as any other parasite in the animal or vegetable world is to the life of the animal or vegetable upon which it feeds.
“The working class is the victim of this parasite – this human leech, and it is the duty and interest of the working class to use every means in its power to oust this parasite class from the position which enables it to thus prey upon the vitals of Labour.
“Therefore, I say, let us organise as a class to meet our masters and destroy their mastership; organise to drive them from their hold upon public life through their political power; organise to wrench from their robber clutch the land and workshops on and in which they enslave us; organise to cleanse our social life from the stain of social cannibalism, from the preying of man upon his fellow man.
“Organise for a full, free and happy life. For All Or For None. Speed The Day.”