Even in sunny Monaco, our tax regime is seen as shady
Here I am on the French Riviera, where general goodwill towards Ireland matches the warmth of the climate and people mention our financial difficulties with compassion for the way that private losses were hocus-pocused into public debt.
Until, that is, Ireland's tax status crops up. Then the compassion clouds over faster than sympathy for a doped-up Tour de France winner.
It hasn't gone unnoticed among austerity-weary European electorates that our 12.5pc corporation tax rate is not where the bar has been set in reality. If everybody paid 12.5pc, a stronger case could be made for defending it. In fact, the big boys, from Apple to Google to Microsoft, are allowed to hammer out juicier deals with the Revenue Commissioners.
On Monday night, I attended a talk about Ireland's roadmap to recovery in the Princess Grace Irish Library in Monaco, where many questions from the floor homed in on the ethics of our low corporate rate.
This palm-tree-rich part of the world – Monaco and the Cote d'Azur – is an oligarchs' playground. Russians are omnipresent, snapping up luxury goods as though rationing was about to be declared. A French boutique owner told me that when Russian women go shopping they empty the rails.
Signs offering property for sale are advertised, not in French and English, but in French and Russian. Brand new Rolls-Royces, Bugattis and Ferraris idle at traffic lights, attracting absolutely no attention. Yachts the size of Liberty Hall, minus any socialists on board, are commonplace.
This conspicuous consumption deceives visitors into imagining that everyone on the Riviera leads the high life. On the contrary, the little people are here too and they worry about taxes as much as their equivalents do elsewhere.
Some were in the audience at the Monaco library discussion and suggested that not only was Ireland's 12.5pc rate unneighbourly, it was stupid into the bargain. We can't even persuade some of the heavy-hitters to pay the specified amount.
The report by US senators John McCain and Carl Levin, claiming that Apple paid just 2pc tax in Ireland, is a controversial issue. The Irish public may not be agitated about corporate-tax avoidance, but people elsewhere in Europe are simmering. After all, the less tax paid by men and women with manicured nails, the more tax that is paid by men and women who are obliged to get dirt under their nails.
So Ireland's corporate tax is regarded as too low and lacking even the saving grace of being a transparent policy; that was the sense among those gathered at the Princess Grace Irish Library, a discreet little jewel established to commemorate Grace Kelly.
The damage to Ireland's reputation internationally can't be discounted. As we prepare to exit the bailout in December, with the Government no doubt planning a lap of honour to coincide, we need all the friends we can muster. And friends don't claim one thing – a 12.5pc tax rate – while practising another.
Of course, the elephant in the room was Monaco's own tax regime, or lack of tax regime, for residents. But Monaco has not had to seek a bailout from its neighbours.
(Incidentally, the troika will continue to peer over our shoulders until 75pc of the loans are repaid. So Ajai Chopra's collection of Irish stamps on his passport is going to keep mounting.)
Last week, we learned that tax deals for multinationals are so hush-hush even the Department of Finance doesn't know the individual arrangements. Granted, Revenue is a statutorily independent body and Finance has no role in tax administration.
However, governments set policies, not Revenue, and official policy smacks of giving the fellows in double-cuffed shirts whatever they want. The fear of them relocating elsewhere, jobs and all, appears to be driving political decision-making.
It is reasonable to assume that if a multinational locates in Ireland because of our tax regime, it will exit Ireland should the tax regime lose some of its gloss. And with the unemployment rate at 13.4pc, Ireland cannot afford to shed any more jobs.
But a race to the bottom with low corporation taxes, and countries pressurised to compete against each other by continually cutting them, is not in the best public interest.
Ultimately, if all states chose this route, it would adjust the balance between tax on personal income and tax on company profits. The result would not be in the individual taxpayer's favour.
Trinity's Professor Frank Barry has just told an Oireachtas sub-committee on tax that we are being "overly paranoid" about reputational harm to Ireland's tax affairs going under spotlights. He said he had taken soundings from the 'Wall Street Journal' and had been told that Silicon Valley saw no damage occurring.
Our friends in Europe may adopt a less tolerant position, however. Last week, it emerged that the European Commission was doing a preliminary investigation into tax deals involving Ireland, Holland and Luxembourg.
When Ireland applied for a bailout in 2010, France sniffed that we would need less assistance if we charged higher corporation tax. But the conundrum is the 115,000 people in Ireland employed by US multinationals. So the burden on personal incomes has been allowed to escalate, while the burden on corporation tax remains flat.
Yet the more profits a multinational makes, the higher the dividend paid to shareholders, who may be relatively wealthy already. The lower the profits, the lower the dividend – unwelcome, presumably, but not lifestyle-changing for well-to-do shareholders.
I tried on a bangle in a Riviera shop yesterday, as U2 played on the sound system. The trinket looked similar to one I paid €75 for in Dublin. When the shopkeeper told me the price – €1,600 – I couldn't unhook it fast enough.
Nobody likes to feel fleeced. There is a sense here in Europe that Ireland's porous corporate tax rate is a rip-off.