The “Double Irish”


And the 11 Trillion Dollar Hangover

The “double Irish” is not a drink. It’s a “near-scam” tax dodge to allow giant pharmaceutical and technological corporations to pay incredibly low taxes in Ireland on foreign income and store the profits in yet another “tax-friendly” place like Bermuda. American corporations like Apple, Google, Facebook, Abbot Labs, Microsoft, Starbucks and Amazon invent ways using Ireland to get Irish income taxes as low as 3.2%. At the moment, The Financial Times reports $11 trillion in such “profits” are kept in foreign tax havens. *

The trick is to (a) establish operational locations in Ireland with convenient differences between Irish and American definitions of tax residency and (b) move the profits offshore. In corporate, political and news reporting circles the “double Irish” is seen as another tax avoidance ploy. But it sure sounds like tax evasion. Ending the “double Irish” loophole is absent from political stump speeches by politicians who talk about corporate tax loopholes. Maybe it is left out because if the “double Irish” near-scam goes, so might political contributions from the above named corporations.

The consumer reaction should be anger with senators, representatives and the president. The “double” Irish evasion not only contributes to the deficit, investing some of that offshore cash could invigorate a more robust recovery from the Great Recession. Congress and the president should not try to coax corporations to bring the bucks back, they should take the steps to require it.

News about how near-scams like the “double Irish” get written into the tax code would be informative. The Financial Times did a great job of reporting about what it is, but nothing about which US representatives and senators voted for it and still protect it. Full transparency is the first step to plugging that loophole.

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*Sources: Alex Barker, Vincent Boland, Vanessa Houlder, Brussels in crackdown on ‘double Irish’ tax loophole, Page 1, and Vanessa Houlder, Q&A How groups can profit from a double Irish, page 4, The Financial Times 10 October 2014.

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