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FDI th rough low taxes and low regulation, had suffered a loss of s overe ignty at the
hands of the EC, and was concerned about the legitimacy of Ireland’s claim to this
windfall, as well as the legitimacy of the EC’s approach and the retroactivity of its
ruling. I f urther argue that the Irish people are largely quiescent with their govern-
ment’s stance because they also belie ve in the benefits of defending their economic
model and the independence of Irish institutions.
Paper four then p rovides a more holistic analysis of the implications of tax a void-
ance as a cooperation problem in the international political economy. Due to the
possibility of dividing the fisc al subject, individual s and companies can benefit
from the public infrastructure of one state while using a nother state’s regulations
to avoid paying taxes (Palan 200 2). Tax polic y can thus be used to dire ctly or in-
directly incentivize and reinforce certain kinds of behavior and I look more closely
at the morality and redistributive effects of state-enabled corporate tax avoidance.
I discuss the relative winners and losers in terms of the various stakeholders in-
volved, i.e. governments, publics, shareholders, employees and consumers. My
ana lysis highlights the difficulties involve d in apportioning their respective share s
of corporate value generation, but nonetheless shows that corporate tax avoidance
is income, w ealth and equality distorting, and thus effects power relations.
I argue that the main beneficiaries of corporate tax avoidance are the shareholders,
the employees, and in particular the ‘management-power-driven’ top earners (sen-
ior executives) at the companies that avoid tax. The biggest losers are those that
pick up the tax burden in society, in particular the individua ls and Small and Me-
dium-sized Enterprises (SME) in larger high-tax sta tes that are unable to make use
of internat ional tax avoidance strategies, as well as those who depend on tax redis-
tribution the most. The rising share of income going to corporates in the economy,
driven by falling tax rates due to the proliferat i on of neo-liberal economic p olicy
and also as governments try to balance investment versus fiscal revenues due to to
