nation: Ireland

Cross-posted at Reports from the Economic Front.

How do corporations escape paying taxes?  Businessweek recently ran a story on Google that helps to explain how they do it.

The story begins by noting that: “Google has made $11.1 billion overseas since 2007.  It paid just 2.4 percent in taxes.  And that’s legal.”   This is pretty incredible because Google does business in many advanced capitalist countries with high tax rates.  For example, “The corporate tax rate in the U.K., Google’s second-largest market after the U.S., is 28 percent.”

While the article focuses on Google, and how it avoids paying taxes, it made clear that most of the leading high-technology companies use remarkably similar techniques to achieve similar results.

Ok, so how does Google do it?  Google’s office in Ireland is the center of the company’s international operations.  In 2009 it “was credited with 88 percent of the search juggernaut’s $12.5 billion in sales outside the U.S.”  But Google doesn’t pay taxes on that amount, because most of the profits went to Bermuda, where there is no corporate income tax.

So, how did Google get its profits to Bermuda?  Businessweek explains:

Google’s profits travel to the island’s white sands via a convoluted route known to tax lawyers as the “Double Irish” and the “Dutch Sandwich.” In Google’s case, it generally works like this: When a company in Europe, the Middle East, or Africa purchases a search ad through Google, it sends the money to Google Ireland. The Irish government taxes corporate profits at 12.5 percent, but Google mostly escapes that tax because its earnings don’t stay in the Dublin office, which reported a pretax profit of less than 1 percent of revenues in 2008.

Irish law makes it difficult for Google to send the money directly to Bermuda without incurring a large tax hit, so the payment makes a brief detour through the Netherlands, since Ireland doesn’t tax certain payments to companies in other European Union states. Once the money is in the Netherlands, Google can take advantage of generous Dutch tax laws. Its subsidiary there, Google Netherlands Holdings, is just a shell (it has no employees) and passes on about 99.8 percent of what it collects to Bermuda. (The subsidiary managed in Bermuda is technically an Irish company, hence the “Double Irish” nickname.)

This set-up (as Businessweek describes it) also helps Google lower its tax bill in the U.S.  Google Ireland licenses its search and advertizing technology from Google’s headquarters in Mountain View, California.  Obviously this technology is worth a lot—but Google headquarters keeps the licensing fee to Google Ireland low.  Doing so means that Google headquarters can minimize its U.S. earnings and thus its tax obligations to the U.S. government.  And of course, Google Ireland knows how to move its profits around to minimize its tax liabilities.

Not surprisingly, corporations are always eager to learn from each other.  Thus, “Facebook is preparing a structure similar to Google’s that will send earnings from Ireland to the Cayman Islands, according to company filings and a person familiar with the arrangement.”  Microsoft already has one in place.

According to one study cited by Businessweek (done by Kimberly A Clausing, an economics professor at Reed College), these kinds of profit shifting arrangements cost the U.S. government as much as $60 billion a year.  And of course Ireland also loses plenty.  Too bad that the governments of Ireland and the U.S. are suffering from large federal deficits and under immense pressure to slash spending.   Collateral damage I guess to the profit-making drive.

What is being done to change this apparently legal racket?  According to Businessweek:

The government has made halting steps to change the rules that let multinationals shift income overseas. In 2009 the Treasury Dept. proposed levying taxes on certain payments between U.S. companies’ foreign subsidiaries, potentially including Google’s transfers from Ireland to Bermuda. The idea was dropped after Congress and Treasury officials were lobbied by companies including General Electric, Hewlett-Packard, and Starbucks, according to federal disclosures compiled by the nonprofit Center for Responsive Politics. In February the Obama Administration proposed measures to curb companies’ ability to shift profits offshore, but they’ve largely stalled.

A nice cozy system, isn’t it.

I’m back! I was in the middle of moving and just overwhelmed with everything. Anyway. Talking Points Memo posted a link to an article at Slate about income inequality in the U.S., and particularly the increasing proportion of total U.S. income earned by the very rich. Timothy Noah refers to the “great compression” as a time period when income concentration among top earners dropped significantly, and argues that in the past three decades we’ve seen a “great divergence,” with increasing income inequality hitting levels not seen since the Great Depression:

A slideshow accompanies the article, providing more info on the changes Noah discusses. A few examples (the slideshow provides the data source used to create each image):

Even among the very rich, we see increasing divergence, with the super-ultra rich, the top 0.1% of earners, now making 8% of all U.S. income:

A comparison to some other countries (I don’t know why these specific nations were chosen for the comparison):

Keep in mind, this data includes only income. Wealth — the worth of all assets, including retirement and savings accounts, stocks, homes, cars, and anything else of value — is much more unequally distributed.

Congress is about to be embroiled in a major debate about whether to extend the tax cuts on high incomes; as both sides weigh in, here’s some context to keep in mind:

The effective tax rate is what people actually pay, as opposed to what their tax rate theoretically is. While we’ve certainly seen a large drop since the late ’70s, Noah argues that, compared to other economic changes, the effective tax rate hasn’t affected the rise in income inequality much. It plays a role, yes, but changing the tax rate on the very rich doesn’t affect the overall distribution of income a huge amount, in part because the effective rate, what people end up actually paying, generally ends up being smaller than what they theoretically owe based on the stated tax rate, once you take into account deductions, write-offs, loopholes, and so on.

So…happy post-Labor Day!

Claude Fischer at Made in America offered some data speaking to the idea that Americans are especially patriotic. That they, in other words, are more likely than citizens of other nations to think that “We’re Number One!”

Fischer provides some evidence by Tom Smith at the International Social Science Programme (ISSP; Tom’s book).  The ISSP, Fischer explains…

…involves survey research institutions in dozens of countries asking representative samples of their populations the same questions. A couple of times the ISSP has had its members ask questions designed to tap respondents’ pride in their countries… One set of questions asked respondents how much they agreed or disagreed with five statements such as “I would rather be a citizen of [my country] than of any other country in the world” and “Generally, speaking [my country] is a better country than most other countries.”

Smith put responses on a scale from 5 to 25, with 25 being the most patriotic.  Here are the results from some of the affluent, western democracies (on a shortened scale of 5 to 20):

As Fischer says, “Americans were #1 in claiming to be #1.”  Well, sort of.  Americans were the most patriotic among this group.  They turned out to be the second most patriotic of all countries.  Venezuela beat us.

(In any case, what struck me wasn’t the fact that the U.S. is so patriotic, but that many other of these countries were very patriotic as well!   The U.S. is certainly no outlier among this group.  In fact, it looks like all of these countries fall between 14 and 18 on this 20-point scale.  Statistically significant, perhaps, but how meaningful of a difference is it?)

Fischer goes on to ask what’s good and bad about pride and closes with the following concern for U.S. Americans:

We believe that we are #1 almost across the board, when in fact we are far below number one in many arenas – in health, K-12 education, working conditions, to mention just a few. Does our #1 pride then blind us to the possibility that we could learn a thing or two from other countries?

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Dmitriy T.M. sent us a link to a story at Slate about (mostly European) “national personifications” — that is, human figures used to represent particular countries, their citizens, or ideas of the national character.  Personification is contentious in that it aims to represent a diverse society with a single person, often representing a simple idea.  Accordingly, we sometimes see divergent, or even conflicting, personifications.

Many personifications in Europe and areas once colonized by them connect the nation to noble ideas and values through the use of Latin-derived names and the use of robes, poses, and other elements of classic statues and paintings to adorn a female figure. For instance, the United Kingdom’s Britannia (an emblem that first emerged when Britain was still ruled by Rome) is a goddess-like figure wearing a Roman-style helmet who has, over time, come to represent the nation and the idea of liberty:

The U.S. has a similar figure, Columbia:

More popular characterizations also emerge, often representing the national character not through goddess-like imagery but as an Average Citizen.  For instance, much more familiar in the U.S. than Columbia is Uncle Sam. He differs from many other national personifications in that he doesn’t represent the U.S. citizenry or the idea of the nation in general; he specifically represents the U.S. government and is best known for wanting “you” to join the military, buy war bonds, and such:

And in addition to Brittania, the U.K. is also personified by John Bull:

According to the Slate article, John Bull presents the British people as middle-class, smart in a common-sense way, and also somewhat suspicious of authority — that is, John Bull is a personification that separates the citizenry from government (the source of authority) to some extent, and thus has been used in many political cartoons to question government policies (whereas Uncle Sam has often been used to advocate them, since he represents the government itself).

Going a step further, Portugal’s Zé Povinho, a working-class personification, actively mocks the powerful, including political elites:

Competing personifications may be used by different political factions. For instance, those in favor of and opposed to Irish independence used female emblems of Ireland. Opponents of Irish nationalism used the figure of Hibernia, represented as the younger sister of Brittania and in need of her sister’s protection from the brutish (male) nationalist forces:

Nationalists responded with Kathleen Ni Houlihan, “generally depicted as an old woman who needs the help of young Irish men willing to fight and die to free Ireland from colonial rule, usually resulting in the young men becoming martyrs for this cause”:

The gender element in these competing personifications is interesting: in both cases Ireland is a woman in need of protection, but who see needs protected by (a stronger sister or men) and from (men in both cases) differs.

So here we have just a small handful of national personifications that may coexist fairly harmoniously while serving different purposes (say, Brittania and John Bull) or actively conflict (representations of Ireland). Various groups in a nation (political elites, different social classes, rebels, etc.) are unlikely to identify equally with a single personification; thus, the figures used to represent a country or its citizens can become sites of political or cultural contention, defining who has the most legitimate claim to being the backbone of the nation (the middle-class John Bull, the working-class Zé Povinho) or framing independence or other political movements.

In a previous post, Gwen explained that sugar consumption rose in Britain during the late 1800s because more nutritious foods were scarce and saved for men.  Women and girls, then, consumed sugar because it offered energy, even if less nutrition.  This led to an association of sugar with women that remains to this day (think of who supposedly LOVES chocolate, binges on ice cream after a break up, etc.).

While having tea with my friend Marie in Ireland, I spotted her bag of sugar and snapped a photo for the blog:

Notice that not only do we see a giant, lipsticked kiss on the bag, but their slogan, “spread a little sweetness” (plus heart and arrow!), is a statement with a double meaning invoking both sugar and a quality associated with/required of women.

NEW! Sarah D. snapped this photo of a sugar packet, also in Ireland:

See also this post on efforts to market chocolate to men.

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Lisa Wade is a professor of sociology at Occidental College. You can follow her on Twitter and Facebook.

Angry Asian Man wrote about two East High Schools–in Rochester, New York and Akron, Ohio–with a peculiar mascot: the Orientals.

East High School merch (Rochester, New York):

Screen shot of the East High School website (Akron, Ohio):

Notice the Asian-y font and the stylistic dragon.

When high schools and sports teams recruit a type of person as a mascot, it objectifies and caricatures them.  It also encourages opposing teams to say things like “Kill the Orientals.”  This can only be okay when we aren’t really thinking about these kinds of people as real humans beings.

This reminded me:  As an undergraduate, I went to the University of California, Santa Barbara.  Our mascot was the Gaucho, which I remember being described as a Mexican cowboy (though South American cowboy may be more descriptive).  I went by the UCSB website and found these two logos.  There is a story about the first identifying it as a brand new logo; the second is for kids:

I am troubled by the Gaucho mascot for the same reasons that I don’t like the Orientals mascot, but at least authentic gauchos are not likely to enroll at UCSB the way that “Orientals” are likely students of the East High Schools.

Then again, this is the image on the front page of the UCSB athlectics website:

It does indeed read: “GLORY. HONOR. COURAGE. TORTILLAS.”  This seems to invalidate any argument that the use of the Gaucho mascot is “respectful.”

Thinking about the Orientals and the Gauchos, alongside the many American Indian mascots still found in the U.S., Notre Dame’s Fighting Irish, and the soccer team in the Netherlands who call themselves the Jews, may give us some perspective on this mascot phenomenon that thinking about one at a time doesn’t.  If we feel that one of these mascots is less discriminatory than another, what drives that feeling?  And is it logical?  Or does it stem from a trained sensibility that isn’t applied to all marginalized groups across the board?  Or is it in response to different characteristics of these different groups?  Or different contexts?

Maybe all five mascots are equally offensive and offensive for the same reasons.  But thinking about them together may also be useful for teasing out how, exactly, they are offensive.  What do you think?

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Lisa Wade is a professor of sociology at Occidental College. You can follow her on Twitter and Facebook.

In agriculture, monoculture is the practice of relying extensively on one crop with little biodiversity.  In the 1840s, a famine in Ireland was caused by a disease that hit potatoes, the crop on which Irish people largely relied.  At Understanding Evolution, an article reads:

The Irish potato clones were certainly low on genetic variation, so when the environment changed and a potato disease swept through the country in the 1840s, the potatoes (and the people who depended upon them) were devastated.

The article includes this illustration of how monocultures are vulnerable:

The Irish potato famine reveals how choices about how to feed populations, combined with biological realities, can have dramatic impacts on the world.  In the three years that the famine lasted, one out of every eight Irish people died of starvation.  Nearly a million emigrated to the United States, only to face poverty and discrimination, in part because of their large numbers.

The article continues:

Despite the warnings of evolution and history, much agriculture continues to depend on genetically uniform crops. The widespread planting of a single corn variety contributed to the loss of over a billion dollars worth of corn in 1970, when the U.S. crop was overwhelmed by a fungus. And in the 1980s, dependence upon a single type of grapevine root forced California grape growers to replant approximately two million acres of vines when a new race of the pest insect, grape phylloxera (Daktulosphaira vitifoliae, shown at right) attacked in the 1980s.

Gwen adds: The Irish potato famine is also an example of a reality about famines that we rarely discuss. In most famines there is food available in the country, but the government or local elites do not believe that those who are starving have any claim to that food. In the years of the Irish potato famine, British landowners continued to export wheat out of Ireland. The wheat crop wasn’t affected by the potato blight. But wheat was a commercial crop the British grew for profit. Potatoes were for Irish peasants to eat. We might think it would be obvious that when people are starving you’d make other food sources available to them, but that’s not what happened. In the social hierarchy of the time, many British elites didn’t believe that starving Irish people had a claim to their cash crop, and so they continued to ship wheat out of the country to other nations even while millions were dying or emigrating. Similarly, in the Ethiopian famines of the 1980s, the country wasn’t devoid of food; it’s just that poor rural people weren’t seen as having a right to food, and so available food was not redistributed to them. Many people in the country ate just fine while their fellow citizens starved.

So famine is often as much about politics and social hierarchies as it is about biology.

In the 1800s, the Irish (whether in Ireland, Britain, or the U.S.) were often very negatively stereotyped. In many cases the same negative characteristics attributed to Africans and African Americans (sloth, immorality, destructiveness) were often also associated with the Irish. In fact, some scientists believed the Irish were, like Africans, more closely related to apes than to other Europeans, and in some cases in the U.S., Irish immigrants were classified as Blacks, not Whites.

The next three political cartoons from the 1800s were found on the Nevada Department of Education website section about racism (as was the quote about the first cartoon).

This one is titled “The Workingman’s Burden” and depicts “a gleeful Irish peasant carrying his Famine relief money while riding on the back of an exhausted English laborer.” It might make a good comparison to how welfare recipients are viewed in the U.S.

This illustration ran in Harper’s Weekly magazine. Notice how the Irish are depicted as more similar to “Negros” than to “Anglo Teutonic” individuals, and both the Irish and Africans are caricatured as ape-like. It could also be useful for a discussion of scientific racism.

This cartoon, titled “Two Forces,” shows a figure representing Britain protecting a weeping, frightened woman, representing Ireland, from a rampaging Irishman; notice his hat says “anarchy.”

This image, found at the University College Cork website, depicts Daniel O’Connell, a leader of the Irish land reform movement, as an “ogre.” He is ladling poor Irish peasants out of a pot labeled “agitation soup,” and, presumably, cheating them out of money in the guise of helping them.

Here we see the Irish depicted as a Frankensteinian monster in a cartoon that ran in Punch in 1882 (image found at the website for a course at the University of St. Andrews):

These next three all come from the Center for History and New Media at George Mason University. Here we see drunken Irishmen rioting and attacking police:

In this one, John Bull (representing Britain) and Uncle Sam look on as an Irish man engages in reckless destruction; notice the empty bottle in the lower right corner, labeled “drugs”:

Here an ape-like Irish man, again drunk, sits on a powder keg, presumably threatening the entire country:

Finally, this one, published in 1882 (and found at the Michigan State University Museum website), is called “Uncle Sam’s Lodging House” and shows an Irish immigrant causing a commotion while other immigrants (notice the beds are labeled Russian, German, Negro, etc.) try to sleep. The smaller caption under the title says, “Look here, you, everybody else is quiet and peaceable, and you’re all the time a-kicking up a row!”

The message is, of course, that other immigrant groups (including Blacks) settle in and don’t cause problems, while the Irish don’t know how to assimilate or stay in their place.

You might compare these images to this recent post about how symbols of Irishness have lost any real negative implications, such that even politicians in non-Irish-dominated districts feel comfortable using them in campaign materials.

And yes, I know I’ve been posting a lot of stuff about race and ethnicity lately. I’m teaching a class on it this semester–it’s the stuff that I keep coming across while writing lectures.

And I’m dedicating this post to my boyfriend, Burk, who decided to go on a date with me even though, when he asked if I’d have trouble dealing with his hard-drinking Irish-American family, I said I could handle that but wouldn’t put up with any blubbering on about how Angela’s Ashes is the best book ever.

NEW!  This cartoon with poem was published in Life Magazine on May 11th, 1893.  The poem is suggesting that the monkeys in the zoo are sad that they get called by Irish names.

Text:

As we’ve dared to call the monkeys in the Zoo by Irish names, Erin’s sons, in wrath, declare us snobs and flunkies ;
And demand that we withdraw them–nor should we ignore their claims–
For it’s really very hard–upon the monkeys.

UPDATE: In a comment, Macon D asked how I address the ways in which Whites of some ancestries (Irish, Italian, etc.) often point to the fact that there was discrimination against those groups as a way of invalidating arguments about systemic racism. The logic is that both non-Whites and some White groups faced prejudice and discrimination but European groups overcame it through their own hard work, and thus any other group could too. If they continue to experience high levels of poverty, unemployment, or any other social problem, it is due to their own lack of hard work, intelligence, or some other characteristic.

I do indeed discuss this argument at length whenever I teach about race. A great reading to address it is Charles Gallagher’s article “Playing the White Ethnic Card: Using Ethnic Identity to Deny Contemporary Racism,” p. 145-158 in White Out: The Continuing Significance of Racism (2003, Ashley W. Doane and Eduardo Bonilla-Silva, editors, New York: Routledge). The tone might put some students off, because it doesn’t baby them or try to sugar-coat the issue of how Whites use their (often imagined) family stories of discrimination as a way to argue that systemic racism doesn’t exist and that they got to where they are by their family’s hard work, and nothing more. I know other professors often use the “How Jews Became White Folks” reading by Karen Brodkin, which also looks at this issue.

I also spend a good part of the semester looking at how government policies have had the effect of transferring enormous amounts of wealth into the hands of European immigrants and helping them accumulate resources over time–we look at the Homestead Act of 1862, the G.I. Bill (which Black veterans were often excluded from using), and how government subsidies for building suburban subdivisions were actively denied to groups wanting to build integrated communities. All these are examples of ways in which White Americans were aided in acquiring wealth and moving up the socio-economic ladder, while non-Whites often were explicitly excluded from these benefits.

I also point out that, while in these images the Irish are negatively stereotyped, it is clear that they are still viewed less negatively than, say, Africans or African Americans. If the Irish are the “missing link” between Africans and Caucasians…that still means they’re considered more evolved than Africans–at least somewhat more fully human. So even at the height of discrimination against White European groups, that did not necessarily mean they were treated “the same” as, say, American Indians or Blacks.