The late Nobel-prizewinning physicist Richard Feynman once said that nobody understands quantum mechanics. He could just as easily have said something similar about international tax law. The arrival in court this week of the State’s appeal against the EU Commission’s 2016 attempt to force Apple to pay Ireland €13 billion in back taxes has once again elicited the usual comments from the usual suspects.

Another Nobel-prizewinner is economist Joe Stiglitz who in recent days has accused Ireland of being a “bad citizen” and of “robbing its neighbours”. Every time Ireland’s corporate tax regime comes under the spotlight, Stiglitz and other luminaries appear to make similar comments. Gabriel Zucman, a prominent economist at Berkeley, regularly castigates Ireland as a tax haven.

There are many different strands to these arguments. The court hearing will deal with the legality of past tax decisions: did Ireland cut Apple a sweetheart deal not on offer to other companies? Such actions, termed state aid, are generally held to be illegal, at least under EU law.

Clearly, all of this will be a matter for the courts, probably including a higher court: the decision of the current judge will almost certainly be appealed. It’s currently reckoned that we will be hearing about this case, one way or another, for at least the next four years.

Legal technicalities

I don’t know whether economists such as Zucman and Stiglitz are well-qualified to judge the legal technicalities ahead of any official verdict. But, soundly based or not, their judgements are reasonably clear. And very damning.

More interesting, to me at least, are the other aspects of all of this. In particular, the explicit suggestion that Ireland has somehow acted unethically merits closer examination. It’s quite something to be accused of “robbing the neighbours”. Notwithstanding the fact that Stiglitz has tried to row back from some of these remarks, the reputational damage has been done.

Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration, is leading the global effort to try and level the multinational tax playing field. At The Irish Times/PWC Tax Summit last week, he struck a very different tone to Stiglitz about Ireland’s global citizenship.

We have engaged “positively” with the OECD’s efforts to improve the global tax system, he said, something that some people, apparently, feared would not happen. The OECD chief was not uncritical: phasing out of the infamous “double Irish” has been too slow; our current corporate tax take is almost certainly unsustainably high.

If Saint-Amans is successful, a lot of the current criticism of Ireland, fair or not, will become a matter of mostly historical interest. But that doesn’t mean it is, or will be, uninteresting. That point about reputational damage is important. And, in my view, needs careful attention if it is not to get further out of hand.

Fiendishly complex

Lazy commentary about a fiendishly complex area all too easily slips into the simplistic “Ireland as tax haven” narrative.

Whatever we did, we couldn’t have done it without the cooperation of other countries. This is not to defend any particular practice but an appeal for balance and full disclosure. In particular, there is a reason why so many US multinationals are here: the US tax authorities have been complicit in the sense that they have been more than happy, for years, not to collect taxes from their multinational corporations.

It was Ireland’s genius to notice US government policy not to tax their global corporations. Ireland simply rolled out a welcome mat that said “if you aren’t going to pay much tax – that explicit government policy choice – come and do it here with a well-educated, English speaking workforce”. Criticisms should begin with a focus on US tax policy before moving on to Ireland. Fairness requires a complete description of the facts rather than simplistic attacks on Ireland.

The Irish argument that we have always played by the rules merits repeating. The outcome of playing by those rules may not have always been to everyone’s liking but that surely is a case for improving the rules rather than appealing to fuzzy definitions of ethics, about which few of those Nobel-prizewinners are likely to agree.

Some countries try to compete via lower taxes; others offer lower wages and minimal regulatory standards. Global economic competition is a brutal game which can only ever be played according to hard rules with a referee. John Major, today widely described as a cuddly ex-prime minister of the UK, once said to the EU: you can have your social protection, we’ll take the jobs.

Breathtakingly silly claim

Stiglitz chides Ireland for not adopting a South Korean or Japanese economic development model. He says we didn’t need the low taxation regime to grow our economy.

That’s a breathtakingly silly claim. It assumes that there is a universally applicable and well-known set of policy choices that can turn a poor country into a rich one. That is simply not true. Natural resources, economic policy, geography, history, demography and dumb luck often combine to produce outcomes that were as unpredicted as they were uncontrollable.