Big Tech's Irish grip is immune to election shocks
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Aimee Donnellan
LONDON, Nov 27 (Reuters Breakingviews) -Irish voters find themselves in a position familiar to other Western democracies in 2024. Friday’s national election gives them a choice between persisting with an unpopular incumbent government, and picking a more radical alternative. But whether the upshot is more of the same with Fianna Fáil and Fine Gael, or a leap into the unknown with Sinn Féin, the most likely winner is Big Tech.
Fianna Fáil and Fine Gael, both centre right groups, have been in charge of Ireland in one form or another since the 2008 financial crisis toppled the country’s lenders and inflicted a painful 85 billion euro bailout two years later. It’s not clear whether it’ll stay that way. Support for Prime Minister Simon Harris’s Fine Gael party is just 19%, his coalition partner Fianna Fáil has 21% and Sinn Féin is on 20%, according to Monday’s Irish Times/Ipsos B&A poll.
In one sense, Sinn Féin’s policies will give the likes of Alphabet’s GOOGL.O Google and Facebook owner Meta Platforms META.O the jitters. The party led by Mary Lou McDonald wants to charge a 3% "solidarity tax” on salaries above 140,000 euros and remove tax credits for higher earners. The party also wants to flood the property market with social and affordable housing, offering homes in Dublin at just 300,000 euros. That’s a steep discount from the current average resale price of 556,000 euros, and it will hit home-owning staff at tech giants who have chosen Dublin as their European headquarters for its low corporate taxes.
The real power lies with Big Tech, though. In 2022, the Irish Fiscal Advisory Council estimated only 10 large companies paid 60% of corporation tax receipts, with three firms contributing one-third of the total. In 2024 corporate tax is set to overtake income tax as the biggest contributor to Ireland’s tax receipts of over 100 billion euros. Multinationals pay their Irish workers some 37 billion euros, which accounts for a third of all wages in Ireland, Irish economist John Fitzgerald said in 2023.
These figures are likely to make McDonald think twice about excessively radical ideas. With many of Ireland’s top earners working for large foreign companies, Dublin would be in a pickle if a large cohort headed elsewhere. Sinn Féin may win, but they will soon learn they need U.S. corporate titans to finance – and implicitly approve – any radical change.
Follow @aimeedonnellan on X
CONTEXT NEWS
Irish Prime Minister Simon Harris' Fine Gael party has slipped into third place after losing a quarter of its support in less than two weeks, according to one of the final opinion polls released on Nov. 25 before the country’s general election on Nov. 29.
Support for Fine Gael has fallen to 19% from 25%, the Irish Times/Ipsos B&A poll showed. Fine Gael's main coalition partner Fianna Fáil was up two points to 21%, while opposition party Sinn Féin was up one point to 20%.
Two of the three main parties will need to join together to form a coalition government, but Fine Gael and Fianna Fáil are seen as the most likely partners as they have both pledged to govern without Sinn Féin.
Ireland’s corporate tax receipts are soaring https://reut.rs/3zKi8cd
Editing by George Hay and Streisand Neto
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
