Corporation Tax to Zero Percent

hangover_ie_ie

Maybe Im looking at this too simply but what if we immediatly put the Corporation tax to Zero. Would we not very quickly see thousands of jobs and empty office blocks and warehouses buzzing again?

murphaph

Don't think it's that simple. The cost of labour is the problem in Ireland for employers or potential employers. Our taxes are not an issue and are favourable as it is. People just need to work for less pay.

Cookie_Monster

then we'd be labelled a tax haven and crucified on double tax treaties which would just be torn up by many countries.

topper75

How about revising down the rate a little to stimulate interest? I mean the latest figures show we are taking in a little higher than we had hoped anyway.

Would we also be subject to such treaty consequences by doing this?

The eurobunnies would be seething of course, but then again it's hardly like they were smiling at us in the first place.

Nody

hangover_ie_ie wrote: »

Maybe Im looking at this too simply but what if we immediatly put the Corporation tax to Zero. Would we not very quickly see thousands of jobs and empty office blocks and warehouses buzzing again?

No, all they would do is create a shell company here and move profits through it (this is on a general level and is currently very popular doing via Switzerland etc.). This is also something that many governments look at closing such loopholes on and if someone set zero tax you can be sure they would turbo through ways to stop it as well.

The problem is why should a company open up in Ireland and actually hire people? Well the answer is simple, to make money (as is the case with all companies). Ok, great! Now how will they make money in Ireland with the high base cost on salary, rent and charges and people who're not spending money (for various different reasons)? Well in general they will not (since setting up also has a lot of front loaded costs and profits take time) and hence zero corp. tax will not really affect their decision on opening shop here. Lower salary costs, lower cost for hire people, less stupid contracts (upwards only rent review I'm looking at you!) etc. could how ever make it possible for opening some serious business here and not only R&D center with tax breaks etc.

ei.sdraob

Instead of setting it to zero

give an incentive to new companies for every X people they hire and keep employed their rate goes down by Y from the 12.5%

speaking of corporation tax ive alot of it to pay this year that's what you get for being successful you hand over money to govt to piss away into any number of black holes


edit: do note that there is no corporation tax for any new companies this year (FF did something right for once?) up to a limit of 120K or so, which is an incentive of sorts

Sticky_Fingers

ei.sdraob wrote: »

speaking of corporation tax ive alot of it to pay this year that's what you get for being successful you hand over money to govt to piss away into any number of black holes

Your paying tax on profits at one of the lowest rates in the EU and your complaining about it.

ei.sdraob

Sticky_Fingers wrote: »

Your paying tax on profits at one of the lowest rates in the EU and your complaining about it.

Yes

1. It is not the lowest.
2. That's money being earned by us via exports that's being taken away only to be pissed away, That's what we get for trying to save up a cash cushion for a bad day.
3. I have not received (not want for that matter having experiences with EI before) any help in the last few years, the business does not have to be located in Ireland, and only things holding company here are family and me not wanting to be bullied out of the country by FF.
4. Unlike other companies I do not partake in money laundering operations here, Google being the moist recent example in the media...

St._Andalou

ei.sdraob wrote: »

Yes

1. It is not the lowest.
2. That's money being earned by us via exports that's being taken away only to be pissed away, That's what we get for trying to save up a cash cushion for a bad day.
3. I have not received (not want for that matter having experiences with EI before) any help in the last few years, the business does not have to be located in Ireland, and only things holding company here are family and me not wanting to be bullied out of the country by FF.
4. Unlike other companies I do not partake in money laundering operations here, Google being the moist recent example in the media...

It is one of the lowest tax rates in the E.U. At 12.5% it's by far the lowest in Western Europe. There are a few countries in Eastern Europe that have a corporate tax rate of 10%.

What do you mean being pissed away? You mean on stuff like hospitals, schools, etc.?

ei.sdraob

St._Andalou wrote: »

What do you mean being pissed away? You mean on stuff like hospitals, schools, etc.?

Only if they spend the money on hospitals, schools and roads

I' am talking about banks, overpaid mandarins and overgenerous welfare.

Take the HSE for example, Instead of cutting the numbers and salaries of employees and outsourcing services such as HR, IT and admin work they are closing down hospitals and wards. That's a ****ing sick joke (no pun intended)

Or welfare, instead of having a system where your first months welfare is almost same as your last wage to cushion out the blow and then going down overtime to encourage people back into employment, we have a system which promotes long-term dependance and abuse of the system.

CokaColumbo

We need to reduce the minimum wage significantly. That'll bring down the cost of living, making Ireland more attractive for people to come here on holidays, study here etc.; and it will also help unskilled and teenage workers to gain experience and skill now so that they'll be able to demand a higher wage in the future; and it will make it more attractive for people to invest in business here.

And lower taxes Fianna Fail!

ei.sdraob

And it aint just corpo tax that i feel is wasted (there are employer side taxes and vat of course as well),
like others I have to pay paye etc taxes and get much less tax credits due to the "privilege" of being a director

I do not agree with this government who at every turn keep making all the wrong decisions to save own backsides
and i feel they are undemocratic and denying us all an election, of course only making the situation worse by this.

CokaColumbo

ei.sdraob wrote: »

And it aint just corpo tax that i feel is wasted (there are employer side taxes and vat of course as well),
like others I have to pay paye etc taxes and get much less tax credits due to the "privilege" of being a director

I do not agree with this government who at every turn keep making all the wrong decisions to save own backsides
and i feel they are undemocratic and denying us all an election, of course only making the situation worse by this.

No government will ever spend its citizens' money as efficiently or as carefully as the citizens themselves will. This isn't a Fianna Fail problem; it's a government problem.

bleg

Cutting it by 1-2.5% would have the same effect as cutting it to 0%. We'd be widely rounded on by our European competitors and perhaps the US but we'd make headlines round the world and remind companies of our excellent rates.

HavingCrack

It's just relying on foreign investment to kickstart the economy. It's the equivelent of social welfare on a national scale, just looking for overseas companies to give us handouts. We need to be prioritising indigenous industry and fostering entrepenueurship ahead of FDI.

Shane732

Our Corporation rate is not what's deterring FDI, it's the cost of labour.

To give you an example -

A plant in Ireland recently announced that it's going to be making a large number of people redundant and is moving the plant elsewhere. It's estimated that the equivalent work can be carried out elsewhere for €25,000,000 less per annum.

The company is willing to pay circa €15,000,000 in statutory redundancy and nearly €10,000,000 to active a break clause in it's lease. Those figures may seem huge but they only equate to one year of the saving that it's going to achieve elsewhere.

There isn't much of an argument for a multinational staying in Ireland and paying €25m per annum above what it can elsewhere.

Tax doesn't even form part of the calculation for multinationals in Ireland anymore.

Also, you can have Corporation Tax at 0% but in order to pay Corporation Tax you must make a profit.

Shane732

HavingCrack wrote: »

It's just relying on foreign investment to kickstart the economy. It's the equivelent of social welfare on a national scale, just looking for overseas companies to give us handouts. We need to be prioritising indigenous industry and fostering entrepenueurship ahead of FDI.

Indigenous industries?

We already did that - it was called the Irish construction industry.

CokaColumbo

HavingCrack wrote: »

It's just relying on foreign investment to kickstart the economy. It's the equivelent of social welfare on a national scale, just looking for overseas companies to give us handouts. We need to be prioritising indigenous industry and fostering entrepenueurship ahead of FDI.

Social welfare is when somebody gets money for being unproductive. Only one party benefits. With investment we provide a company with the means to make a profit, and in return that company gives us employment and tax revenue. It's a mutually beneficial relationship. It was inward, international investment, i.e. free enterprise, which got our country off the bread line. 'Prioritising indigenous industry' (sounds like protectionism) ensured that our masses lived in economic hardship for decades.

ei.sdraob

CokaColumbo wrote: »

No government will ever spend its citizens' money as efficiently or as carefully as the citizens themselves will. This isn't a Fianna Fail problem; it's a government problem.

Erm, Fianna Fail made an art-form out of being able to waste money by the dozens of billion.

HavingCrack

Shane732 wrote: »

Indigenous industries?

We already did that - it was called the Irish construction industry.

Construction isn't an industry that helps the economy, at least not the way we were doing it. An economy has to be based on imports and exports. During our construction boom all we were doing was buying and selling to each other, not to other countries.

CokaColumbo wrote: »

Social welfare is when somebody gets money for being unproductive. Only one party benefits. With investment we provide a company with the means to make a profit, and in return that company gives us employment and tax revenue. It's a mutually beneficial relationship. It was inward, international investment, i.e. free enterprise, which got our country off the bread line. 'Prioritising indigenous industry' (sounds like protectionism) ensured that our masses lived in economic hardship for decades.

I don't think you understand what my point is. I didn't say there was anything wrong with foreign investment, just relying on foreign companies to provide employment isn't promoting any indigenous industry. Why do we expect American businesses to provide us with jobs? Why does everyone seem so opposed to fostering entrepeneurship? I'll admit my social welfare analogy isn't a great one but expecting other countries to provide us with employment and doing nothign to foster indigenous industries isn't the way forward. FDI can and regularly do pull the plug on their investments a la Dell, something and Irish firm probably wouldn't do as eagerly.

I'm not advocating protectionism which does not work as an economic policy. I'll give you four examples of where indigenous industry could be promoted.

1-Fisheries, we're surrounded by water and fisheries ought to be a massive part of our economy. Currently it takes 5 YEARS to get a fish farming licence in this country, the government is failign to promote this whatsoever. We should be exporting fish, not importing them as we are at the moment

2-Forestry. Cut out this idea of paying farmers to grow trees. If someone has enough land, capital and iniative let them set up a forestry business, felling and exporting timber. The government could help by giving tax breaks. There's a massive forestry industry in the Scandinavian countries, why nto one on a smaller scale here?

3-Rape seed oil. There's been experiments growing rape seed in Tipperary, give tax breaks and grants to farmers to grow this and we can lessen our dependency on foreign oil imports, giving money to Irish people instead of the Saudis as well as creating employment in the primary and secondary sectors.

4-Wave Power. We have the might of the Atlantic Ocean at our disposal. Utilise the power of waves to create power, once again lessening our dependencies on foreign fuel supplies. We could create jobs in Research and Development in our universities and i.t.'s, jobs designing and manufacturing wave turbines, jobs operating them etc. etc

There's four potential areas for development that don't require us needing FDI.