A new reality television series called Dating Naked began in the US last Thursday in which the traditional dating process is up-ended and the couples bare all at the start of their encounter and decide whether they can cast aside their inhibitions and find love, without clothes.
In terms of fatuousness, the programme plumbs the same depths as other "naked TV" reality shows in the US such as Naked and Afraid (nude castaways) and Buying Naked (helping nudists find the perfect homes).
Much like Dating Naked inverts the typical boy-meets-girl process, the recent flurry of takeovers by US companies of overseas rivals has revealed new levels of naked ambition in the corporate world.
So-called "inversions" – where a US company acquires or merges with a foreign rival enabling the American firm to shift its legal address for tax purposes to a low-rate country to avoid US taxes – have vexed some members of the Congress and incensed the White House too.
Ireland is drawn into the debate as many US corporate suitors have pursued Irish firms relocating their tax homes to benefit from the Irish corporate rate of 12.5 per cent and shun the US rate of 35 per cent.
American politicians are regularly heard moaning about the loss of company X, a big employer in their district/state Y, to country Z.
Moving overseas For a while the biggest inversion deal this year involves the takeover of Irish-based healthcare group Covidien by Minnesota-based medical device company Medtronic in a $42.9 billion deal that will see the US firm reincorporate in Dublin. Even that massive merger was overshadowed on Friday by the AbbVie/Shire deal. It seems to have been the final straw for some.
The Levin brothers – Senator Carl and Congressman Sandy – in Congress, who have a track record of bashing corporate tax dodgers, want to introduce legislation that limits the number of inversions.
Sandy Levin released a report earlier this month showing 47 inversions in the past decade, most since 2008. "Barely a week seems to pass without news that another corporation plans to move its address overseas simply to avoid paying its future share of taxes," he said.
Apple was left badly bruised last year after the California iPhone maker was hauled before a Senate panel chaired by Carl Levin. He accused the company of using Ireland – a "tax haven" – and Irish companies that were stateless for tax purposes to keep tens of billions of dollars of income beyond the reach of the American taxman.
The Irish Government challenged some of the claims made during that hearing. But the Senate soundbites resonated louder and Minister for Finance Michael Noonan announced plans last year to close the tax loophole between the Irish and US tax systems that Apple exploited.
Inversions are not specific to Ireland – the UK, the Netherlands and Switzerland are popular tax-shifting destinations too – but the practice is again attracting more unwelcome press for Ireland Inc.
Columnist Allan Sloan, referring to the reincorporations in Ireland in an opinion article in the Washington Post, noted how his annual July 4th celebrations were ruined by this "new kind of American corporate exceptionalism" with "companies that have deserted our country to avoid paying taxes but keep receiving the full benefits that being American confers, and for which everyone else is paying".
US treasury secretary Jack Lew echoed these comments last week when he wrote to Congress urging them to pass legislation preventing these corporate couples getting together and eloping overseas. He rallied for an economic patriotism to make them stay at home.
Even though the attention generates some discomfort, the problem is not Ireland’s. The greatest obstacle in the way of the US government – and a major threat to Irish interests if they ever get around to fixing it – is the uncompetitive US tax rate and unwieldy tax system.
The US levies corporate taxes on worldwide income and in an increasingly digital age when companies no longer ship products but sell the produce of intellectual property online, it makes sense for companies to create overseas entities to cut taxes as part of their fiduciary duty to maximise returns. Shareholders first, citizens second.
Comprehensive tax reform Multinationals regard tax costs as little different from staff costs. If they start rising, look for where they are cheaper and move there.
In the face of reflected criticism about Ireland’s tax regime in the growing debate about inversions - resentment about our tax rate was even raised in last week’s Senate confirmation hearing to vet Obama’s choice for Irish ambassador - Irish officials should adopt a “it’s not me it’s you” approach, an inversion of the traditional break-up strategy.
This may prove an inhibition too great to overcome for Irish representatives in diplomatic circles to point out to US officials that their problem is out-of-sync American tax exceptionalism.
Striping down to the ugly facts about a tax system that is not fit for purpose is the first task but when Democrats and Republicans cannot see eye-to-eye in the most rudimentary areas of governance, it seems unlikely they will tackle as divisive an issue as comprehensive tax reform any time soon.
