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Washington has unleashed a new unemployment crisis in Ireland.
The crisis threatens the future of the 150,000 jobs at Apple and other foreign multinationals in this struggling, bailed-out European economy. And it erupted last week after US senators accused Apple of using Ireland to avoid a gigantic tax bill.
The iPhone maker, Ireland’s largest multinational, shelled out a tiny fraction of taxes on $74 billion in overseas income, mostly because of favorable Irish tax law, the pols claim.
In fact, Apple, which employs 4,000 in Ireland, negotiated a special corporate tax rate of under 2 percent in Ireland, according to a US Senate subcommittee hearing on taxes.
“That’s little comfort to smaller taxpayers in countries who are expected to pay more and more tax to try to get their economies up off their knees,” Brid O’Brien, of the Irish National Organisation of the Unemployed in Dublin, told The Post.
Apple and other multinationals, lured to Ireland partly because of a low corporate tax rate, officially at 12.5 percent, are desperately needed as the country slashes its budget to pay off international lenders. Unemployment is at 14 percent; emigration is near Great Famine levels.
The Irish government highly values these multinationals. Apple, Intel, Google and others drive Ireland’s export-led growth.
“I do not want to be the whipping boy for some misunderstanding in a hearing in the US Congress,” snapped Ireland’s finance minister, Michael Noonan. Noonan said the Senate’s conclusions were wrong and misleading. “The 2 percent annual rates are got by dividing the tax charged by branches in Ireland by the entire profit of the companies concerned,” he said.
But economists say Ireland will have to reassure foreign multinationals nervous about regulators snooping on their affairs in Ireland.
The upshot: Some companies could eventually move operations elsewhere if cost benefits don’t continue to add up.