‘Cutting Corporation Tax: A Left Republican Analysis’ by Donal Lavery

As someone who identifies with republicanism and the need for a left-wing sovereign government in Ireland, it sometimes appears confusing to people (particularly from other countries) that a consensus exists on reducing corporate taxation in the North. I mean surely left-wingers want businesses to pay more, to garner the revenue for better public services? That would hold true in a self-governing nation state encompassing the entire island, but not within a devolved context under the parameters of a Union with Britain.

Prior to the Free State’s competitive corporate tax regime, an ailing economy existed which failed countless generations forced to emigrate for good opportunities. The economy was agrarian and poor, domestic industries lacked the demand for their produce and austerity was the economic orthodoxy per the decades. Demand was weak and Ireland was a poor nation with the only people who had opportunities for advancement being those born into them. We could not compete with an industrialised Britain in terms of manufacturing and instead became the garden of it, focusing on agricultural production.

But with the election of Charles Haughey in the late 80’s came an economic rethink; Ireland embraced the EU and the single market. A low corporate tax rate and a highly skilled workforce brought an economic prosperity from the end of the 80’s until 2008; and back again. Irish people became the second highest earners in Europe per household and in 2005 The Economist issued a study concluding that Ireland was the best place in the world to live. Businesses of the world rushed in to take advantage of an English-speaking nation with full access to the European markets. The country’s tax revenues soared, as did public spending – which includes one of the most generous welfare systems on the planet. ‘Social partnership’ brought an economic confidence which the Irish people had never previously enjoyed. Quite simply, the business of the Irish people was and remains  business.

Now, I want high earners and big business to pay more to fund redistribution of wealth and resources in a United Ireland. Poverty needs to be eliminated, across every single part of this island. I believe in financial intervention and subsidies in deprived rural and urban areas as a matter of moral duty to those people; running deficit-spending accordingly. Reflation of Irish livelihoods as part of a move towards a Scandinavian ‘mixed economy’ model. The Nordic states have the added benefit of being the most happy in this world, as a result. Norway is also ranked as the most equal nation on the planet. All of which exercise their right to adjust corporate taxation at a competitive level. So the countries with the highest standards of living apply this methodology to pay for superlative public services.

But in order to fund a prosperous and dynamic reunited Ireland, the North needs to grow its economy to decrease the dependence on British financial subvention. We need a Northern economy that creates wealth instead of consuming it; for that cycle leaves us totally dependent on the will and ethos of English tax-payers. It makes no sense to have two corporate tax rates on a small island with a small workforce. Nor two different trade union movements. Which business would seriously want to invest in the North when the tax regime is more attractive and the workforce better skilled in the South? It’s common sense to harmonise both tax regimes and ensure greater integration of third level education; integrating the people and resources of the country.

There are of course the ‘intrigues’, within People Before Profit, who seem to believe that increasing corporation tax in the North would stimulate economic growth on an island where our next door neighbour is doing the opposite. They think that a high tax economy next to a competitive Euro-Zone is the way forward under partition. One thing it confirms is that they subconsciously or willingly endorse the “Two Nations” theory of Ireland; reaffirming a Partitionist mentality therein. But all the while their Southern branch of apparatchiks advocate a corporate tax-rate at the same level as the right-wing of the British Tory Party desire. Like many of their ideas, I don’t suspect they have thought it through or applied coherence to it; its amateurish and stinks of populism at the expense of practicality.

Ultimately, there are people within the Free State who believe the mantra that reunification would be too costly and that the economy of the North is too different in structure. But the task of any patriot, and something which goes right to the heart of the republican conscience, is to make the North as economically prosperous as possible; eradicating financial barriers to eventual reunification and an end to reliance on a former colonial power for our livelihoods. The two Ireland’s must amalgamate into one economic soul if we are to see a seismic shift in redistributing wealth and opportunities, allowing this nation to prosper once again. The UK leaving the EU does come with the reality that no cut to public expenditure would now be required to lower corporation tax, as is the case with applicable EU fiscal Treaties, we can vary it as we wish. In the end, there are many words used to articulate the economy of a real Republic in Ireland, but the truth is, we only need three: John Maynard Keynes.