Corporation tax: Unfair Advantage?

bob the bob

<Playing devil's advocate for a minute.....>

Should Ireland be allowed to keep it's corp tax which is lower than other European counterparts?

If the answer is yes, what is the argument for keeping this possibly unfair advantage? (besides "we need it" )

Amhran Nua

bob the bob wrote: »

If the answer is yes, what is the argument for keeping this possibly unfair advantage? (besides "we need it" )

What's unfair about it? Nothing stopping anyone else dropping their own corporate tax rate.

Cookie_Monster

Our Corp Tax is not the big advantage everyone thinks it is TBH. Of much much greater important are all our various double tax treaties with other countries which allows its use for non-Irish derived income.
If they were to go and and the rate stay the same we'd still lose most multinationals.

Black Swan

Source: http://www.google.com/imgres?imgurl=http://pekin.mae.lu/var/fr/storage/images/media/images/total-tax-rates-for-eu2/178812-1-fre-FR/Total-Tax-Rates-for-EU_reference.jpg&imgrefurl=http://pekin.mae.lu/en/Doing-Business-in-Luxembourg-China/Tax-Information-Luxembourg&usg=__agk5PTIgLqzsKnTp6jq3SOsi27I=&h=306&w=500&sz=36&hl=en&start=16&zoom=1&tbnid=m-t_1-KPE8kUeM:&tbnh=103&tbnw=168&prev=/images%3Fq%3Dcorporate%2Btax%2Brates%2BEU%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1034%26bih%3D619%26tbs%3Disch:10,488&um=1&itbs=1&iact=hc&vpx=301&vpy=136&dur=4509&hovh=176&hovw=287&tx=142&ty=92&ei=2efjTJikK8XbngfAt7mODw&oei=DefjTM-dH8L7lwfnx8mLDg&esq=2&page=2&ndsp=15&ved=1t:429,r:1,s:16&biw=1034&bih=619

bob the bob

Blue_Lagoon wrote: »

Source: http://www.google.com/imgres?imgurl=http://pekin.mae.lu/var/fr/storage/images/media/images/total-tax-rates-for-eu2/178812-1-fre-FR/Total-Tax-Rates-for-EU_reference.jpg&imgrefurl=http://pekin.mae.lu/en/Doing-Business-in-Luxembourg-China/Tax-Information-Luxembourg&usg=__agk5PTIgLqzsKnTp6jq3SOsi27I=&h=306&w=500&sz=36&hl=en&start=16&zoom=1&tbnid=m-t_1-KPE8kUeM:&tbnh=103&tbnw=168&prev=/images%3Fq%3Dcorporate%2Btax%2Brates%2BEU%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1034%26bih%3D619%26tbs%3Disch:10,488&um=1&itbs=1&iact=hc&vpx=301&vpy=136&dur=4509&hovh=176&hovw=287&tx=142&ty=92&ei=2efjTJikK8XbngfAt7mODw&oei=DefjTM-dH8L7lwfnx8mLDg&esq=2&page=2&ndsp=15&ved=1t:429,r:1,s:16&biw=1034&bih=619

And which category does corp tax fall under?

Laminations

Profit taxes I'd imagine, but overall it looks like there is plenty of scope to be increasing taxes across the board in Ireland and still maintaining competitiveness compared with our high tax counterparts in Europe

Cookie_Monster

bob the bob wrote: »

And which category does corp tax fall under?

Its a tax on profits

enda1

I look at the EU as somewhat analogous to the privatisation of the mobile telecoms industry.

Each provider (country) is free to set its own tariffs (taxes) to an extent, and it is in this freedom and difference between tariff structure (tax base) that customers (people/corporation) can choose their provider.

This competition is necessary to ensure a competitive mobile telecoms market (Europe) and stop potential customers from choosing a completely different alternative solution such as VOIP over wifi (America/Asia etc.)

This analogy is not water-tight but I feel it can be a useful way of looking at things.

enda1

Laminations wrote: »

Profit taxes I'd imagine, but overall it looks like there is plenty of scope to be increasing taxes across the board in Ireland and still maintaining competitiveness compared with our high tax counterparts in Europe

Competitiveness is not entirely tax based. We must provide an extra tax incentive to some of European neighbours because we fall behind in some other categories such as (depending on the industry of course and which neighbour we compare against):

domestic market access,
infrastructure,
ready supply of skilled workers,
transport costs,
employment costs,
bureaucratic issues

LookingFor

Amhran Nua wrote: »

What's unfair about it? Nothing stopping anyone else dropping their own corporate tax rate.

Some argue it is unfair because companies make use of infrastructure and other advantages in one country - things meant to be funded by taxes in that country - but then turn around and pay (less) taxes on as much income as they can in other countries.

They also say that lowering corp tax is just 'race to the bottom' economics, but on that front I personally would prefer us to engage in that particular race, than - say - a race to the bottom on salaries and quality of life. I'd prefer us to compete on tax than on certain other things.

Every country has strengths and weaknesses IMO. Some are innate, and there's nothing you can do about them (like say geography and resources), and some could argue that's unfair. I think we should maximise the ones that are malleable, we kind of have to because we don't have a lot of 'built in' advantages that are policy-independent.

Amhran Nua

LookingFor wrote: »

Some argue it is unfair because companies make use of infrastructure and other advantages in one country - things meant to be funded by taxes in that country - but then turn around and pay (less) taxes on as much income as they can in other countries.

Its not like these companies pay no taxes at all in other countries, the only question is the tax on corporate profits. Again, I don't see that it's unfair - we aren't responsible for those countries, we're only responsible for our own little patch.

gollem_1975

Cookie_Monster wrote: »

Our Corp Tax is not the big advantage everyone thinks it is TBH. Of much much greater important are all our various double tax treaties with other countries which allows its use for non-Irish derived income.
If they were to go and and the rate stay the same we'd still lose most multinationals.

and if the rate was to change upwards..though not a betting man... I would wager we'd lose them too.

gollem_1975

Blue_Lagoon wrote: »

Source: http://www.google.com/imgres?imgurl=http://pekin.mae.lu/var/fr/storage/images/media/images/total-tax-rates-for-eu2/178812-1-fre-FR/Total-Tax-Rates-for-EU_reference.jpg&imgrefurl=http://pekin.mae.lu/en/Doing-Business-in-Luxembourg-China/Tax-Information-Luxembourg&usg=__agk5PTIgLqzsKnTp6jq3SOsi27I=&h=306&w=500&sz=36&hl=en&start=16&zoom=1&tbnid=m-t_1-KPE8kUeM:&tbnh=103&tbnw=168&prev=/images%3Fq%3Dcorporate%2Btax%2Brates%2BEU%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1034%26bih%3D619%26tbs%3Disch:10,488&um=1&itbs=1&iact=hc&vpx=301&vpy=136&dur=4509&hovh=176&hovw=287&tx=142&ty=92&ei=2efjTJikK8XbngfAt7mODw&oei=DefjTM-dH8L7lwfnx8mLDg&esq=2&page=2&ndsp=15&ved=1t:429,r:1,s:16&biw=1034&bih=619

don't know how useful the above graphic is to the discussion tbh.

tax on profits != corporation tax

otherwise wouldn't the EU be complaining about belgiums low rate!?

ardmacha

Even if the Corporation tax offered some kind of advantage, it should have been removed in 2006. We cannot be said to have an advantage now when unemployment is 15% and growth is negligible.

Inquitus

ardmacha wrote: »

Even if the Corporation tax offered some kind of advantage, it should have been removed in 2006. We cannot be said to have an advantage now when unemployment is 15% and growth is negligible.

Big MNCs brought here by the low Corp Tax and Taxonomy are one of the few bits of our economy actually hiring at the moment. Unemployment is not due to them, rather it is due to the complete collapse of the Construction sector and the knock on of that to other businesses, coupled with the reduction in spending brought about by the lowering of peoples standard of living through both unemployment and budget tax hikes.

keithclancy

gollem_1975 wrote: »

don't know how useful the above graphic is to the discussion tbh.

tax on profits != corporation tax

otherwise wouldn't the EU be complaining about belgiums low rate!?

Corporate Tax Rates
Country %
Ireland 12.50%
Netherlands 25.50%
United Kingdom 30.00%
China 33.00%
Belgium 33.99%
France 34.43%
Germany 38.60%
USA 39.50%
Japan 39.54%

Inquitus

gollem_1975 wrote: »

don't know how useful the above graphic is to the discussion tbh.

tax on profits != corporation tax

otherwise wouldn't the EU be complaining about belgiums low rate!?

keithclancy wrote: »

Corporate Tax Rates
Country %
Ireland 12.50%
Netherlands 25.50%
United Kingdom 30.00%
China 33.00%
Belgium 33.99%
France 34.43%
Germany 38.60%
USA 39.50%
Japan 39.54%

The Graph shows what % of tax revenue is from Taxs on Profits, mainly Corp Tax. not what a country's Corp Tax rate is, as correctly pointed out by MrClancy.

Low Corp Tax can bring in companies and result in a higher Tax Take than if one had a higher Tax Rate etc. etc.

Bob_Latchford

uk corporation tax was cut to 24% coming in sometime in 2014 i think. This would make it the lowest in the G7.

big b

Inquitus wrote: »

Big MNCs brought here by the low Corp Tax and Taxonomy are one of the few bits of our economy actually hiring at the moment. Unemployment is not due to them, rather it is due to the complete collapse of the Construction sector and the knock on of that to other businesses, coupled with the reduction in spending brought about by the lowering of peoples standard of living through both unemployment and budget tax hikes.

Are they though?
Haven't we already lost some of the MNC manufacturing jobs to elsewhere? The cadaver being that "we're still committed to Ireland, we see a great future in our R & D departments"

It's a terrifying prospect, but if we can't get our costs down, I can see us losing a whole lot more production jobs, while the MNC's keep a token workforce here to avail of our low Corpo tax for their worldwide operations.

kmick

CT tax in germany is 15%. Im not sure why they are so antsy about our 12.5% rate.

enda1

Inquitus wrote: »

The Graph shows what % of tax revenue is from Taxs on Profits, mainly Corp Tax. not what a country's Corp Tax rate is, as correctly pointed out by MrClancy.

Low Corp Tax can bring in companies and result in a higher Tax Take than if one had a higher Tax Rate etc. etc.

Which can somewhat be explained by the Laffer Curve.

enda1

kmick wrote: »

CT tax in germany is 15%. Im not sure why they are so antsy about our 12.5% rate.

Doesn't Germany also have a local trade tax around 15% pushing the real tax % close to 30%?

gollem_1975

Inquitus wrote: »

The Graph shows what % of tax revenue is from Taxs on Profits, mainly Corp Tax. not what a country's Corp Tax rate is, as correctly pointed out by MrClancy.

Low Corp Tax can bring in companies and result in a higher Tax Take than if one had a higher Tax Rate etc. etc.

yes I know that..

gollem_1975 wrote:

"!= "

means "does not equal"

I was pointing out that while at first it seemed that the graph was relevant to the discussion.. on further investigation it wasn't

gollem_1975

big b wrote: »

Are they though?
Haven't we already lost some of the MNC manufacturing jobs to elsewhere? The cadaver being that "we're still committed to Ireland, we see a great future in our R & D departments"

It's a terrifying prospect, but if we can't get our costs down, I can see us losing a whole lot more production jobs, while the MNC's keep a token workforce here to avail of our low Corpo tax for their worldwide operations.

12.5% of something is better than 100% of nothing.

opening up discussion about our costs (don't disagree with you on that score btw) is OT

thebman

Our low corporation tax should be viewed for what it is, compensation for our poor location as an island off the coast of Europe.

We need someway to offset our disadvantages or we would not get investment.

Its called competing for investment and there is nothing stopping other countries from doing similar.

I do think for the good of the EU, we should devise a system for measuring equality of locating in different regions and come up with a strategy that suits most countries in the union.

Euro_Kraut

This website has list of Corp Tax rate around the world: http://www.worldwide-tax.com/

This article note that the average rate in the EU has fallen of late: http://www.businessweek.com/globalbiz/content/jun2010/gb20100629_855797.htm

Cool Mo D

enda1 wrote: »

Which can somewhat be explained by the Laffer Curve.

Ecept the Laffer curve isn't a curve. All you can say for sure is that 0% and 100% tax rates both yield no revenue. In between, no-one really knows.

There is a historical reason for why other countries, generally large European countries, have high corporation taxes. Historically, the larger countries industrialized first, and built up a wide range of large companies, which are too ingrained and established into that countries economy to easily move without losing their current organisational knowledge and disrupting their current operations. These large companies are a cash cow for their Governments, who set a moderate to high rate of corporation tax.

Since Ireland does not have these companies, as we did not go through much early industrialization, it cannot profit in the same way from a higher tax. We set a lower rate to attract more mobile global companies. This annoys higher tax countries, as they worry that over time, their large companies may slowly drift to the lower tax regime.

bladespin

I don't see out corporation tax as an unfair advantage, it counteracts the fact that we're an island and the disadvantages that brings.

big b

gollem_1975 wrote: »

12.5% of something is better than 100% of nothing.

opening up discussion about our costs (don't disagree with you on that score btw) is OT

Our costs are indeed OT.

Was just pointing out that, in itself, low CT doesn't guarantee MNC's continuing to provide high levels of employment, as was alluded to above.

keithclancy

I posted this in another thread, but i think its more suited here

http://boards.ie/vbulletin/showpost.php?p=69071280&postcount=39

gandalf

As has been stated given we are on the periphery of Europe with high costs and low quality infrastructure the current rate of Corporation Tax can be seen as a balancing to make us attractive.

However if we continue to allow our costs to be uncompetitive then eventually that will erode whatever positive points of attraction that we have left.

gollem_1975

big b wrote: »

Our costs are indeed OT.

Was just pointing out that, in itself, low CT doesn't guarantee MNC's continuing to provide high levels of employment, as was alluded to above.

yeah perhaps my post would have been a more fitting reply to

ardmacha wrote:

Even if the Corporation tax offered some kind of advantage, it should have been removed in 2006. We cannot be said to have an advantage now when unemployment is 15% and growth is negligible.

so despite the advantage of low CT ( it is an advantage ) we have u/e of 13%. we would certainly have higher u/e if the MNCs weren't here.

1) CT is a major reason for the MNCs to be here
2) there are several domestic jobs relying on each MNC job
3) 12.5% of their profits going to Irish coffers is better than the neglible amount we'd have if we had a comparable rate of CT to the UK or Netherlands.

southsiderosie

thebman wrote: »

Our low corporation tax should be viewed for what it is, compensation for our poor location as an island off the coast of Europe.

We need someway to offset our disadvantages or we would not get investment.

Its called competing for investment and there is nothing stopping other countries from doing similar.

I do think for the good of the EU, we should devise a system for measuring equality of locating in different regions and come up with a strategy that suits most countries in the union.

gandalf wrote: »

As has been stated given we are on the periphery of Europe with high costs and low quality infrastructure the current rate of Corporation Tax can be seen as a balancing to make us attractive.

However if we continue to allow our costs to be uncompetitive then eventually that will erode whatever positive points of attraction that we have left.

I'm not buying the 'poor location' story. Smart countries make the most of where they are; the Low Countries exist today because of human ingenuity. If Ireland had spent the boom years making major upgrades to their national and international transport infrastructure instead of building ghost estates, they could be a major transfer point between the US and Europe/the Middle East and Asia. Plus Ireland is a small country that is not only part of one of the second-richest economic zone in the world, it has unusually close ties to the world's biggest economy.

I've said it in other threads, but at this point, I think Ireland is going to have to really choose what kind of economic model it wants going forward. It cannot simultaneously be a low tax haven and a Swedish-style welfare state with a large public sector - it has to choose. So maybe the question regarding the corporate tax rate shouldn't be 'Is it unfair', it should be 'Is it enough?".

two wheels good

http://www.bbc.co.uk/programmes/b00vhgpl

I'd like to draw your attention to a very interesting BBC Radio 4 program about corporations chasing low tax rates in Zug, Switzerland and Dublin where listed corporations consist of financial assets only; no fixed assets, no employees.

In Zug, Boots (the chemist) now owned by an Equity fund are registered to a PO Box number. Once they paid £128m per annum to the exchequer now they pay £28m yet they continue to avail of all the advantages of trading in the UK.

Also discussed: Barclays "double dipping" tax allowances in Dublin and the USA; Teams of tax avoidance experts in London working to exploit every loophole.

Corporations need to pay their share too, loopholes and tax havens need to be closed. And playing off one country against another is a strategy that will cost the national taxpayer in the long run.

Liam Byrne

If we are forced to change our corporation taxes to match the EU then we should also be forced to get rid of **** like VRT and other things that make this country less competitive and more expensive to live in.

gandalf

southsiderosie wrote: »

I'm not buying the 'poor location' story. Smart countries make the most of where they are; the Low Countries exist today because of human ingenuity. If Ireland had spent the boom years making major upgrades to their national and international transport infrastructure instead of building ghost estates, they could be a major transfer point between the US and Europe/the Middle East and Asia. Plus Ireland is a small country that is not only part of one of the second-richest economic zone in the world, it has unusually close ties to the world's biggest economy.

I've said it in other threads, but at this point, I think Ireland is going to have to really choose what kind of economic model it wants going forward. It cannot simultaneously be a low tax haven and a Swedish-style welfare state with a large public sector - it has to choose. So maybe the question regarding the corporate tax rate shouldn't be 'Is it unfair', it should be 'Is it enough?".

Of course it is an issue its called Geography. We are seen as a gateway into Europe and for software or paper based products it is not an issue however for manufactured physical goods then yes there are significant cost differences if an organisation wants to deal with the whole EU.

If the base themselves in Poland (like Dell did in the Foxconn plant from Limerick) they can reach the majority of the European market via the road networks cutting down on shipping costs dramatically. Now you factor in the difference in costs for labour for example then you see the real problems that Ireland is facing to attract investment from MNCs. Lose the advantage of the low corporation tax and then we are in big trouble.

All those who say we can raise the corporation tax further are basing their arguement on a very dangerous assumption. That all businesses will remain in Ireland if that happens. If they aren't what is an acceptable loss of companies. 10%, 20%, 50% and all the jobs that go with them both directly and indirectly.

Whatever this government do next they had better make sure that they ring fence our Corporate Tax rate and do not barter it away to save foreign bondholders.

K-9

gandalf wrote: »

Of course it is an issue its called Geography. We are seen as a gateway into Europe and for software or paper based products it is not an issue however for manufactured physical goods then yes there are significant cost differences if an organisation wants to deal with the whole EU.

If the base themselves in Poland (like Dell did in the Foxconn plant from Limerick) they can reach the majority of the European market via the road networks cutting down on shipping costs dramatically. Now you factor in the difference in costs for labour for example then you see the real problems that Ireland is facing to attract investment from MNCs. Lose the advantage of the low corporation tax and then we are in big trouble.

All those who say we can raise the corporation tax further are basing their arguement on a very dangerous assumption. That all businesses will remain in Ireland if that happens. If they aren't what is an acceptable loss of companies. 10%, 20%, 50% and all the jobs that go with them both directly and indirectly.

Whatever this government do next they had better make sure that they ring fence our Corporate Tax rate and do not barter it away to save foreign bondholders.

Economist's base raising Corporation Tax on certain elasticities. I don't think they apply to us!

thebman

southsiderosie wrote: »

I'm not buying the 'poor location' story. Smart countries make the most of where they are; the Low Countries exist today because of human ingenuity. If Ireland had spent the boom years making major upgrades to their national and international transport infrastructure instead of building ghost estates, they could be a major transfer point between the US and Europe/the Middle East and Asia. Plus Ireland is a small country that is not only part of one of the second-richest economic zone in the world, it has unusually close ties to the world's biggest economy.

I've said it in other threads, but at this point, I think Ireland is going to have to really choose what kind of economic model it wants going forward. It cannot simultaneously be a low tax haven and a Swedish-style welfare state with a large public sector - it has to choose. So maybe the question regarding the corporate tax rate shouldn't be 'Is it unfair', it should be 'Is it enough?".

We are an island, completely disconnected from mainland Europe.

Why would anyone locate here instead of Britain if not because we are cheaper to do business with because of tax rates or lower wages?

southsiderosie

gandalf wrote: »

Of course it is an issue its called Geography. We are seen as a gateway into Europe and for software or paper based products it is not an issue however for manufactured physical goods then yes there are significant cost differences if an organisation wants to deal with the whole EU.

If the base themselves in Poland (like Dell did in the Foxconn plant from Limerick) they can reach the majority of the European market via the road networks cutting down on shipping costs dramatically. Now you factor in the difference in costs for labour for example then you see the real problems that Ireland is facing to attract investment from MNCs. Lose the advantage of the low corporation tax and then we are in big trouble.

All those who say we can raise the corporation tax further are basing their arguement on a very dangerous assumption. That all businesses will remain in Ireland if that happens. If they aren't what is an acceptable loss of companies. 10%, 20%, 50% and all the jobs that go with them both directly and indirectly.

Whatever this government do next they had better make sure that they ring fence our Corporate Tax rate and do not barter it away to save foreign bondholders.

And like I said, smart countries deal with the geography and use it to their advantage. The Dutch learned to control the rivers and sea, and control shipping to and from Europe. The Finns live in a small cold country, and have focused on education and technology, to great effect. Ireland was never going to be a manufacturing powerhouse; its population is too small, and its infrastructure is not good enough. But it is English-speaking and has rich neighbors. It should not be as much of a basket-case as it is today.

I agree that Ireland should protect its corporate tax rates. Like I said though, they need to pick a model. I don't think they offer enough value to have a Swedish-style system, nor do they have enough indigenous industry. In the long term, I think it makes more sense to de-regulate more, and try to position themselves as the Hong Kong of Europe. But that would mean scrapping the clientelist political model, and staring down the unions, and I highly doubt either will happen.

Amhran Nua

Cool Mo D wrote: »

There is a historical reason for why other countries, generally large European countries, have high corporation taxes. Historically, the larger countries industrialized first, and built up a wide range of large companies, which are too ingrained and established into that countries economy to easily move without losing their current organisational knowledge and disrupting their current operations. These large companies are a cash cow for their Governments, who set a moderate to high rate of corporation tax.

Nail on the head and well said sir. Its all very well for these larger European countries to be complaining about our CT rate, but they are tring to close the door after they have their own industrial base well and truly established. Thats what I call unfair.

yoshytoshy

Not sure if other people heard on the pat kenny show ,a guy mentioning that ireland will probably have to increase it's corporation tax ,he said it was ridiculous that we were so low in the euro zone and in such bad financial ways.

Could this be part of the cost of a bailout for us ?

gandalf

yoshytoshy wrote: »

Not sure if other people heard on the pat kenny show ,a guy mentioning that ireland will probably have to increase it's corporation tax ,he said it was ridiculous that we were so low in the euro zone and in such bad financial ways.

Could this be part of the cost of a bailout for us ?

It could be especially if the ECB are running the bailout as they are subject to political interference from France & Germany. If the IMF are leading it probably not as all they will be interested in is that we can pay the money back and they would have the intelligence that FDI creates an awful lot of jobs in Ireland and is directly linked to our low corporation tax.

Austrian Finance Minister Josef Proell, however, was quoted as saying the Irish corporate tax rate would have to be discussed in any talks on aid, foreshadowing tough negotiations.

source here

yoshytoshy

Thanks ,when I heard that coming from an English spokesperson ,I was wondering if England was going to push for an increase in return for their help.

K-9

gandalf wrote: »

It could be especially if the ECB are running the bailout as they are subject to political interference from France & Germany. If the IMF are leading it probably not as all they will be interested in is that we can pay the money back and they would have the intelligence that FDI creates an awful lot of jobs in Ireland and is directly linked to our low corporation tax.


source here

An Austrian politician does not equate to the ECB.

Anything anyway concrete Gandalf, barring an Austrian source?

Nobody is in any doubt certain French and German politicians would love to see a rise in our CT rates.

The IMF is a small part of the fund. No doubt when this claim proves a non runner, it'll still get thrown out there, as inevitable sometime in the future.

gandalf

yoshytoshy wrote: »

Thanks ,when I heard that coming from an English spokesperson ,I was wondering if England was going to push for an increase in return for their help.

Yes I believe it is an issue for the UK however they are in a precarious situation with Irish debt as Royal Bank of Scotland are on the hook for £50 billion worth of outstanding loans to Ireland and the UK government are the majority shareholder. So I do not see them pushing for it to be changed.

It is a target for the French and for the Germans as well though.

yoshytoshy

gandalf wrote: »

Yes I believe it is an issue for the UK however they are in a precarious situation with Irish debt as Royal Bank of Scotland are on the hook for £50 billion worth of outstanding loans to Ireland and the UK government are the majority shareholder. So I do not see them pushing for it to be changed.

It is a target for the French and for the Germans as well though.

Phew , I was worried about that. For once Debt is on our side.

Amhran Nua

gandalf wrote: »

It could be especially if the ECB are running the bailout as they are subject to political interference from France & Germany.

Actually prior to the economic problems of the recession, the ECB was infamously inversely likely to take action according to the pressure put on it, in particular with reference to large European countries. It's probably more independent than the IMF.

HellFireClub

bob the bob wrote: »

<Playing devil's advocate for a minute.....>

Should Ireland be allowed to keep it's corp tax which is lower than other European counterparts?

If the answer is yes, what is the argument for keeping this possibly unfair advantage? (besides "we need it" )

Our CT rate of 12.5% is just plain stupid. It's like having 3 rooms in your house, a PAYE room where the tenant pays you fair market rate PAYE/Rent, a VAT room where the tenant pays you fair and market-rate VAT/Rent, but you've a CT room where the tenant pays very little by way of contribution to the mortgage you've to pay for the overall house...

When you are a few hundred Euro shy for the mortgage at the end of the month and you went looking for bail out to pay the difference, any half decent bank manager would tell you to get your act together and get fair rent off all three tenants before he/she would bail you out with a loan.

We are failing to look at our primary concern here when we look at CT, which is running our country and having the income to do so without borrowing huge sums. We are pandering and people pleasing again to a gang of employers who want to have the US FDI tail wagging the Irish sovereign dog. We employ approximately 1.5 million people in this country, US multinationals employ around 100K of those workers, which is around 6% of the workforce, and it's long since past time their commentry, chestbeating and "arms length" lobbying activities via IBEC and the American Chamber of Commerce in Ireland were viewed in that particular context.

Pandering and people pleasing got us nowhere in relation to the construction industry and it will get us nowhere in relation to the US MNC's... I don't recall seeing a box for DELL, Google or Microsoft on the last ballot paper I ticked...

Amhran Nua

HellFireClub wrote: »

Our CT rate of 12.5% is just plain stupid.

Stupid like employing hundreds of thousands of people, or stupid like a half thought out post on boards?

dRNk SAnTA

HellFireClub wrote: »

Our CT rate of 12.5% is just plain stupid. It's like having 3 rooms in your house, a PAYE room where the tenant pays you fair market rate PAYE/Rent, a VAT room where the tenant pays you fair and market-rate VAT/Rent, but you've a CT room where the tenant pays very little by way of contribution to the mortgage you've to pay for the overall house...

Nutty post but I'm tempted to play along. The first tenant is employed by the third tenant, by raising the "rent" and driving him away, you're also going to lose the now unemployed first tenant.

Here's another analogy. Germany complaining about Irelands corporation tax is like Lufthansa complaining about Ryanairs low fares. We aren't stealing anything, it's called ****ing competing. And we're doing great.

Ryanair carry the most passengers in the world, and Ireland creates the most FDI jobs (per capita) in the world. Do you reckon it makes long term business sense for Ryanair to increase their fares? We are a raging success in this area and everyone else has the serious green eye going on.

Ronan Lyons has a great post about the issue here: http://www.ronanlyons.com/2010/11/16/and-its-hard-to-craft-a-budget-when-youre-watched-by-olli-rehn-open-letter-to-soon-to-be-european-overlords/

HellFireClub

dRNk SAnTA wrote: »

Nutty post but I'm tempted to play along. The first tenant is employed by the third tenant, by raising the "rent" and driving him away, you're also going to lose the now unemployed first tenant.

Here's another analogy. Germany complaining about Irelands corporation tax is like Lufthansa complaining about Ryanairs low fares. We aren't stealing anything, it's called ****ing competing. And we're doing great.

Ryanair carry the most passengers in the world, and Ireland creates the most FDI jobs (per capita) in the world. Do you reckon it makes long term business sense for Ryanair to increase their fares? We are a raging success in this area and everyone else has the serious green eye going on.

Ronan Lyons has a great post about the issue here: http://www.ronanlyons.com/2010/11/16/and-its-hard-to-craft-a-budget-when-youre-watched-by-olli-rehn-open-letter-to-soon-to-be-european-overlords/

We are not "****ing competing" as you have put it, by any stretch of the imagination when we have to get bailed out by a whole load of other states. That isn't competing, that's the opposite of competition, that's called subsidising economic growth.

Think about how utterly stupid this policy is... In order to pander to and people please the US MNC employers of around 100,000 employees in the state, (who are going to be operaing from another continent anyway in 15 years time), we selfishly protect the employers of the remaining 1.4 million employees in the state. How stupid is that??? The only employers who consistently threaten this state with assured capital flight in the event of the CT rate being increased are the US multinationals and their minions in IBEC and AmCham... You never hear any of the indigenous Irish employers threatening to throw their toys out of the pram if they are subjected to more tax at a time of the most serious crisis that the state has encountered...

If you want to debate this point with me, debate it on merit or otherwise, and preferably not on the illogical and selfish whims/press releases/sabre rattling tactics of Ibec et al...