‘Smart’ Taxes for Smartphones

The images of paradise and apples have moved beyond their biblical roots to take on a fiscal connotation. Like Adam did all those years ago, the Irish government has succumbed to the apple of temptation: replacing thousands of local jobs in a fiscal maneuver that is fiercely advantageous to some while detrimental to its communities, now triggering the greatest tax battle on record.

Although complaints from Europe have amplified the controversy, the indiscriminate mingling of the Irish tax plan with American multinational technologies isn’t just a one-off.

In the absence of other wealth or natural attractions, Ireland has made its tax model an alternative source of wealth, after the fashion of the 17th-century contract between English ports and the pirates returning there with the fruits of their plunder. Now, these other “British ports” are repeating the practice through strict policies that threaten the balance of the European tax system. As Mark Twain once said, “History never repeats itself but it rhymes.”

Americans abroad, many working in technology and living in Ireland, appear to benefit from the fragility of the European system as they negotiate in these intra-EU tax havens. Data presented by the European Commission show that the libertarians of Silicon Valley, lauded for their unlimited ability to change the world, made no exception with the tax systems of the countries in which they operate. In this sense, there’s quite the contrast between the apparent progressivism of head of Apple Tim Cook, focused on such noble causes as the rights of minorities and the fight against climate change, and his now-criticized practices of tax evasion, which call into question the sustainability of the European social system. It seems to me that not even Donald Trump would go so far.

The resulting sentiment of this situation is that everybody ends up working for Apple for free, as we gladly offer the taxes collected in our country — taxes which we, not Apple’s shareholders, should enjoy the effects of. But the real problem lies in the fact that relations between Ireland and Apple most likely happen within the realm of legality.

Only a formidable global authority will be able to iron out these asymmetries. Without intervention — keeping in mind the self-destructive nature of capitalism — the rupture of the social contract, which has taxation as one of its fundamental variables, will trigger de-globalization to the detriment of the very companies that today reap the rewards the most.