Time to take gloves off in tax war - ECB letter and tax evasion

The publication yesterday of the utterly unambiguous November 2010 letter from the then ECB president Jean-Claude Trichet to then Minister for Finance, the late Brian Lenihan, shows how power is used and how real and pressing vulnerability — a country facing economic collapse and the chaos that would ensue could only be described in those terms — turns national politicians into supplicants rather than negotiators.

The parallel publication yesterday, also by The Irish Times, of revelations that showed how Irish companies, and many others, use legal tax arrangements in Luxembourg to cut their tax bills by millions upon millions shows how power prevails and gathers a momentum that almost puts it beyond the reach of governments of small, moderately influential, occasionally supplicant, countries.

That Ireland has been accused of facilitating behaviour just like, or versions of, Luxembourg’s “advanced tax arrangements” shows how pervasive and deeply rooted the profit-protecting, profit-enhancing process really is. It is as if international tax loopholes are a never-ending conga line determined to evade obligations rather than a way to impose legitimate levies to sustain civilised and stable societies.