SanDisk set up a shell company in Ireland to avoid heavy taxation in its native land. Plenty of other multinationals did the same, all looking to ease the burden and not have to give the government quite so much, thus allowing the CEOs to make a decent living wage. After all, why give Uncle Sam a few million that he'll squander on some nonsense like food stamps, when the chief executive deserves a bonus of $6 million for all his hard work.
The whole tax avoidance scheme has played to Ireland's benefit, with the small island nation taking in their share of taxes on corporate profits. As they only take a small bite, just enough for a taste, the hulking conglomerates were happy to ship their profits overseas. Taxes are inevitable, so why not find a well-run establishment that doesn't ask for much of a cover charge? And when that fine establishment gets undercut by competition, it's easy to pull up and move the money caravan to another country. No manufacturing plants to shut down, a minimum of jobs to be lost, and the cost of relocation is virtually negligible.
With that in mind, Bristol-Myers Squibb has announced that they are removing something in the neighborhood of 25 million euro worth of assets. They took advantage of the lower Irish tax rate, thank you very much by the way, Ireland, but they've found someplace else to go that'll charge even less. They're not saying where they're headed, but it's been suggested that Belgium, land of excellent ale and fabulous chocolate, could be the next destination on the tax dodge tour of the world.
Lately, several companies that located factories in Ireland to take advantage of lower wages have moved on, finding sites in Eastern Europe that afforded even lower operating costs and cheaper wages. It's been a blow to several communities, where the multinational facility was the only game in town, and there's nothing coming in to replace it. Not everyone is a computer whiz, ready to step into an IT position, but that's where the jobs are these days. The blue collar working man, hoping to get a piece of the prosperity pie, is getting the sack instead of the demanded pay increase.
Bristol-Myers Squibb was quick to point out that there are no jobs being lost because of their move. What they failed to mention was the fact that a great deal of money was being lost to the Exchequer, and that cash is a loss to the entire nation. Other firms are following suit, liquidating Irish assets and shifting the profits to other countries that are happy for less than the 12.5% Irish rate.
Some of the pillars of the Celtic Tiger are crumbling. It might come down to an international bidding war, with the lowest taxing country taking the prize and learning to make do with less. Less national health care, less road building, less public spaces created. Sort of like the way it used to be, when the most asked for gift after passing the Leaving Cert was a one-way ticket out of Ireland.