Raise the corporate tax

whiteonion

Corporation tax should be increased in Ireland, I can't see why this tax should be sacred when taxes for us ordinary people are increasing while services are being cut.

If you raised the corporate tax to 20% it would still be a quite low tax by EU standards. Where would the multinationals move to since taxes are still lower than in most countries even if you raised it to 20%.

The Nordic countries + Germany all have higher corporate tax and yet they seem to do pretty well.

Lockstep

The problem is that the Nordic countries/Germany have strong domestic companies and can make their own exports, we're extremely reliant on MNC to supply jobs.

Our 12.5% corporation tax is extremely attractive looking to foreign investors and businessmen. While we have a few other attractive features like EU membership and a well educated/Anglophone membership, we also have problems like poor infrastructure and a high cost of living. Reducing the tax rate to 12.5% was one of the smart decisions that was brought in by the last rainbow coalition (funnily enough, by Labour Minister for Finance Ruairi Quinn).

Basically, we don't have enough other comparative advantages to justify raising our corporation tax.

Sesshoumaru

I think you'd have to use a balancing scales. On one side you place our low corporation tax rate and on the other side you put poor infrastructure, higher energy costs, higher wage costs etc etc So then maybe on balance you might find it's less attractive to do business in Ireland compared to doing business in Germany if our corporate tax rate was at 20%

whiteonion

kickoutthejams wrote: »

The problem is that the Nordic countries/Germany have strong domestic companies and can make their own exports, we're extremely reliant on MNC to supply jobs.

Our 12.5% corporation tax is extremely attractive looking to foreign investors and businessmen. While we have a few other attractive features like EU membership and a well educated/Anglophone membership, we also have problems like poor infrastructure and a high cost of living. Reducing the tax rate to 12.5% was one of the smart decisions that was brought in by the last rainbow coalition (funnily enough, by Labour Minister for Finance Ruairi Quinn).

Basically, we don't have enough other comparative advantages to justify raising our corporation tax.

What Ireland needs right now is a balanced budget, at the moment our current politicians are selling future generations into debt bondage because these politicians on both the left and the right refuse to do what it takes to balance the budget. Raising corporate tax is a very good way to get some more badly needed revenue.

mgmt

whiteonion wrote: »

What Ireland needs right now is a balanced budget, at the moment our current politicians are selling future generations into debt bondage because these politicians on both the left and the right refuse to do what it takes to balance the budget. Raising corporate tax is a very good way to get some more badly needed revenue.

First Sugar Tax and now Corporation Tax???

Corporations employ 1000s. Where will they get jobs, when the MNC fock off when the corporation tax rate is increased?

jmayo

whiteonion wrote: »

What Ireland needs right now is a balanced budget, at the moment our current politicians are selling future generations into debt bondage because these politicians on both the left and the right refuse to do what it takes to balance the budget. Raising corporate tax is a very good way to get some more badly needed revenue.

You don't appear to think very much about the ways you suggest for raising taxes.
First it was sugar, not it is corporation tax. :rolleyes:

It is not a vcery good way of raising tax if in the medium to long term it drives out business.

Yes you might get big chunk of tax in this year, but next year you find less companies to tax, less workers in work and thus more unemployed to add a drain on the exchequer.

Taxes can become counter productive, as was seen by one of lenihan's great decisions in upping our VAT rate at exactly the same time as the UK lowered theirs.

Of course I get the feeling you will blatter something about how these FDI companies and MNCs will still stay in Ireland even though they will now have increased corporation taxes to go with the cr** infrastructure, high wage costs, high energy costs and decreasing calibre of graduates. :rolleyes:

Oh taxing ones way out of recession has been tried and it doesn't really work. :rolleyes:

It is like the old sailor joke that "floggings will continue until morale improves".
These measures don't work.

Lockstep

whiteonion wrote: »

What Ireland needs right now is a balanced budget, at the moment our current politicians are selling future generations into debt bondage because these politicians on both the left and the right refuse to do what it takes to balance the budget. Raising corporate tax is a very good way to get some more badly needed revenue.

As much as we need a balanced budget, even if we double the corporation tax it wouldn't do much in plugging the deficit. And that's assuming that the tax intake remains the same; far more likely it would lead to more companies leaving the country.

It's too much of a risky political move, especially for the minor revenue gains we would see.

RichardAnd

If anything, corporation tax should be lowered. Our MNCs are, like it or not, a huge provider of employment and for that alone, they are vital we must do all that is possible to ensure they stay whilst attracting even more.

Raising Corporation Tax would cause MNCs to leave Ireland, taking their profits with them. Thus, we would be trading the 12.5% tax on Microsoft's profits for 0% is they were to leave and that's not taking into account the job losses.

CT tax is precious.

whiteonion

RichardAnd wrote: »

If anything, corporation tax should be lowered. Our MNCs are, like it or not, a huge provider of employment and for that alone, they are vital we must do all that is possible to ensure they stay whilst attracting even more.

Raising Corporation Tax would cause MNCs to leave Ireland, taking their profits with them. Thus, we would be trading the 12.5% tax on Microsoft's profits for 0% is they were to leave and that's not taking into account the job losses.

CT tax is precious.

Where would the MNCs go to if taxes were raised? There are not many in Europe with a corporation tax below 20%. Also it is foolish to make oneself to dependent on big MNCs, what's next if they threaten us with moving out if we don't implement the same environmental laws and labour laws like Nigeria should we succumb under these threats too?

whiteonion

How are the Nordics able to have more strict labour laws, higher taxes in all levels of society and still have a prosperous economy. Ireland has much lower taxes and is doing pretty badly. If your theory was correct it should have been the other way around now shouldn't it?

We should lower it tbh.

stephendevlin

RichardAnd wrote: »

MNCs are, like it or not, a huge provider of employment
.

I agree I know lots of towns and surrounding areas depending on these jobs. If it pushed up .. all it takes is a couple of companies to pack up and leave and then a mass exodus ....

Be a grave mistake this country / government

Will leave Ireland an even poorer place with an even longer dole que! And for what??

stephendevlin

whiteonion wrote: »

Corporation tax should be increased in Ireland, I can't see why this tax should be sacred when taxes for us ordinary people are increasing while services are being cut.

If you raised the corporate tax to 20% it would still be a quite low tax by EU standards. Where would the multinationals move to since taxes are still lower than in most countries even if you raised it to 20%.

The Nordic countries + Germany all have higher corporate tax and yet they seem to do pretty well.

Those countries resent the fact for years that we can offer foreign investment companies cheaper tax and attract jobs

They would love nothing more to see us up our corp tax to thier level. We would end up a very sorry nation.

whiteonion

stephendevlin wrote: »

Those countries resent the fact for years that we can offer foreign investment companies cheaper tax and attract jobs

They would love nothing more to see us up our corp tax to thier level. We would end up a very sorry nation.

Obviously taxes are too low, otherwise we would not have massive budget deficits.

Tipp Man

whiteonion wrote: »

Obviously taxes are too low, otherwise we would not have massive budget deficits.

Ever think that we are spending way beyond our means???

A country that hasn't 2 cents to rub together can still pay some of the best levels of social welfare in the world, it can pay its teachers some of the best payrates in the world, its civil servants must be some of the worst value for money employees in any western economy.

Yet your answer is to tax more?? Ignoring of course that our corp tax is only about 3.5 billion - we could double that amount and we are still short about 11 billion - that is how high the governments expenditure is

whiteonion

Tipp Man wrote: »

Ever think that we are spending way beyond our means???

A country that hasn't 2 cents to rub together can still pay some of the best levels of social welfare in the world, it can pay its teachers some of the best payrates in the world, its civil servants must be some of the worst value for money employees in any western economy.

Yet your answer is to tax more?? Ignoring of course that our corp tax is only about 3.5 billion - we could double that amount and we are still short about 11 billion - that is how high the governments expenditure is

I think most people would prefer raising taxes over cutting down social services to third world levels.

ei.sdraob

whiteonion wrote: »

Raising corporate tax is a very good way to get some more badly needed revenue.

Its a very good way to ensure that by the next budget there isnt an economy left.

douglashyde

whiteonion wrote: »

Obviously taxes are too low, otherwise we would not have massive budget deficits.

That makes no sense. That's not how Ireland has a budget deficit, MNC don't create expenses for the country. What they do create is jobs (income tax), corporation tax (low relative to other nations) support services (more income tax and corp tax)

It's true that corporation tax could be raised a certain amount and have little effect on the amount MNC invest in Ireland. But that's not something I want the government to test the limit on.

MNC have been good to Ireland over the last 20 years and are one of the few areas of society that bring positivity in this country now. It seems typical Irish style to complain about everything, even the good!

stephendevlin

whiteonion wrote: »

Obviously taxes are too low, otherwise we would not have massive budget deficits.

You sound like an accountant ..


Cutting off your nose to spite your face ...

So up the taxes ... Our budget will see a tiny change but the .... Ohhhh .. 30,000 jobs are lost at €200 a week on dole I dunno you do the math..

later12

whiteonion wrote: »

Obviously taxes are too low, otherwise we would not have massive budget deficits.

The tax take is too low, that does not mean that the tax rate is too low relative to our expenditure. It can mean that there are less people paying tax, less money in circulation and generating retail and capital taxes, or that our expenditure is too great, or, more likely, all three.

Count Dooku

whiteonion wrote: »

I think most people would prefer raising taxes over cutting down social services to third world levels.

if country perform as third world country without own strong export base, then it deserves their world social services

whiteonion

stephendevlin wrote: »

You sound like an accountant ..


Cutting off your nose to spite your face ...

So up the taxes ... Our budget will see a tiny change but the .... Ohhhh .. 30,000 jobs are lost at €200 a week on dole I dunno you do the math..

30,000 x 200 x 52 = €312,000,000.

I think the tax revenue we'd generate would more than make up for the added cost of unemployment lines. Raising the corporate tax from 12,5% to 20% would generate billions of euros in extra revenue.

Looking at it from a budget perspective a raise of the corporate tax would make sense.

RachaelVO

whiteonion wrote: »

Where would the MNCs go to if taxes were raised? There are not many in Europe with a corporation tax below 20%. Also it is foolish to make oneself to dependent on big MNCs, what's next if they threaten us with moving out if we don't implement the same environmental laws and labour laws like Nigeria should we succumb under these threats too?

the Netherlands. The dutch rate is also very low, not to mention the fact that they have a bilingual work force and are withing driving distance of most countries... That's where they would go, leaving Ireland more FUBARED that it is already

ei.sdraob

or Cyprus who have a 10% rate
or several eastern european countries who wouldnt mind few jobs and MNCs...

later12

whiteonion wrote: »

30,000 x 200 x 52 = €312,000,000.

I think the tax revenue we'd generate would more than make up for the added cost of unemployment lines. Raising the corporate tax from 12,5% to 20% would generate billions of euros in extra revenue.

From whom? presumably the 30,000 figure that you yourself employ reflects a desertion of companies from Ireland in the event of a tax hike. Not only will public expenditure rise, the tax take will inevitably fall or plateau.

By the way, you could probably double that unemployment cost based solely on the auxiliary costs of unemployment like medical care and rental aid.

mgmt

whiteonion wrote: »

30,000 x 200 x 52 = €312,000,000.

I think the tax revenue we'd generate would more than make up for the added cost of unemployment lines. Raising the corporate tax from 12,5% to 20% would generate billions of euros in extra revenue.

Looking at it from a budget perspective a raise of the corporate tax would make sense.

Please repeat JC Maths.

€312,000,000

+30,000*€36,400*20%= €218,400,000 ...lost PAYE revenue (very conservative)

+ lost VAT revenue
+ lost PRSI
+ (drop in economic activity = more job loses)

=:eek:

MrMatisse

Hello 20% tax rate

Goodbye economy

Chucky the tree

It's not just unemployment cost. It's the drop in taxes like VAT from people spending less money now there unemployed. Then there's the knock effect of shops, pubs cafes etc that are based near the MNC. I'd be very confident that if we did up our CT to 20% another EU country would be straight in to drop there's to 12% or so and clean up.

stephendevlin

whiteonion wrote: »

30,000 x 200 x 52 = €312,000,000.

I think the tax revenue we'd generate would more than make up for the added cost of unemployment lines. Raising the corporate tax from 12,5% to 20% would generate billions of euros in extra revenue.

Looking at it from a budget perspective a raise of the corporate tax would make sense.

Sorry that was a poor example.. there are a lot more than this working for these companies also minus your intake of tax (billions) as these companies will no longer be in Ireland to pay these increased taxes

I really think your having a laugh though. You really couldnt be that silly to think what you think...

up the tax and were f.u.c.k.e.d ... simples..

you would just be giving them a reason to move to Poland (which is already happening) India (which is already happening)

Nermal

whiteonion wrote: »

I think most people would prefer raising taxes over cutting down social services to third world levels.

They're already at third world levels, the problem is we're not paying third world prices for them.

Atlantic Dawn

No company in their right mind would invest in this country if we had the same rate as the other English speaking country in the EU the UK, the 12.5% rate allows companies to wash profits here and that's the only reason they are here.

RichardAnd

whiteonion wrote: »

Where would the MNCs go to if taxes were raised? There are not many in Europe with a corporation tax below 20%. Also it is foolish to make oneself to dependent on big MNCs, what's next if they threaten us with moving out if we don't implement the same environmental laws and labour laws like Nigeria should we succumb under these threats too?

I don't know where they would go but I can assure you of this; If an MNC can make more money by operating in country another country then they will be out of here. Simple as.

Yes other counties have CT higher than 20% but you're not looking at the bigger picture here. In Germany, an MNC would pay more CT but this could be offset by lower wages, cheaper rent, better infra structure and more productive staff. The germans also have an excellent installed base for manufacturing that can't easily be moved whilst many MNCs here are just people in offices.

There fore, we are left with only our CT to keep Google, Intel, SAP and all the rest operating here. Google and Intel have already given jaded warnings about fiddling with CT tax so we can take it that they aren't here for our brilliant graduates or our work ethic . If we become as productive and competitive as the germans, then we can look at CT going up but for now, it simply must either stay at 12.5 or, even better, go down.

Also, OP, your comment that the increased revenue would make up for increased unemployment is a profoundly bizarre comment to make. Putting aside the loss of VAT and income tax, how can you possibly think that putting thousands of people out of work would be a good idea? If you worked for an MNC, you most certainly would not be of that opinion.

whiteonion

RichardAnd wrote: »

I don't know where they would go but I can assure you of this; If an MNC can make more money by operating in country another country then they will be out of here. Simple as.

Yes other counties have CT higher than 20% but you're not looking at the bigger picture here. In Germany, an MNC would pay more CT but this could be offset by lower wages, cheaper rent, better infra structure and more productive staff. The germans also have an excellent installed base for manufacturing that can't easily be moved whilst many MNCs here are just people in offices.

There fore, we are left with only our CT to keep Google, Intel, SAP and all the rest operating here. Google and Intel have already given jaded warnings about fiddling with CT tax so we can take it that they aren't here for our brilliant graduates or our work ethic . If we become as productive and competitive as the germans, then we can look at CT going up but for now, it simply must either stay at 12.5 or, even better, go down.

Also, OP, your comment that the increased revenue would make up for increased unemployment is a profoundly bizarre comment to make. Putting aside the loss of VAT and income tax, how can you possibly think that putting thousands of people out of work would be a good idea? If you worked for an MNC, you most certainly would not be of that opinion.

Higher CT could be used to fund better infrastructure, at the moment Ireland has a third world infrastructure to be honest.

Sesshoumaru

whiteonion wrote: »

Higher CT could be used to fund better infrastructure, at the moment Ireland has a third world infrastructure to be honest.

Other posters have already pointed out countries with a lower rate and now you yourself admit our infrastructure is rubbish. Do you want to give us some reasons why you think MNC's would stay if the tax rate was put up? Besides our low tax rate, what else have we got to keep companies here?

whiteonion

Sesshoumaru wrote: »

Other posters have already pointed out countries with a lower rate and now you yourself admit our infrastructure is rubbish. Do you want to give us some reasons why you think MNC's would stay if the tax rate was put up? Besides our low tax rate, what else have we got to keep companies here?

Supposedly Ireland has a "well-educated" workforce. Whatever that means.
Ireland needs to find other things to attract foreign investment on, it is not sustainable to rely on a low corporate tax which will have to be raised at some point.

mgmt

whiteonion wrote: »

Supposedly Ireland has a "well-educated" workforce. Whatever that means.
Ireland needs to find other things to attract foreign investment on, it is not sustainable to rely on a low corporate tax which will have to be raised at some point.

How about an emigration tax. Might cover the loses from a rise in corporation tax.

whiteonion

mgmt wrote: »

How about an emigration tax. Might cover the loses from a rise in corporation tax.

Well I suppose they could raise the airport tax a bit more. People won't stop flying because of another €10 tax slapped on their ticket.

the groutch

why is everyone talking about big hikes, like up to 20%
the incoming government should experiement with a nominal increase to 13%, then 14% in 2012, and finally 15% in 2013

a 2.5% increase will hardly have all the US companies running for the hills, and could reduced the need for such painful cuts or other taxes in the 4 year plan, or whatever equivalent new government will be implementing

RichardAnd

whiteonion wrote: »

Higher CT could be used to fund better infrastructure, at the moment Ireland has a third world infrastructure to be honest.

If you think Ireland has a third world infrastructure then you've never been to a real third world country. The infrastructure here is ok, it's not sterling but it's decent in most parts of the country.

But you're missing the larger point entirely here. The increased tax on profits will make very little difference to the money coming into the coffers. Putting aside the MNCs that would leave and the jobs lost in the process, Irish companies would see less profit too which would translate into lower wages for staff and lay-offs.

Count Dooku

the groutch wrote: »

why is everyone talking about big hikes, like up to 20%
the incoming government should experiement with a nominal increase to 13%, then 14% in 2012, and finally 15% in 2013

a 2.5% increase will hardly have all the US companies running for the hills, and could reduced the need for such painful cuts or other taxes in the 4 year plan, or whatever equivalent new government will be implementing

MNC's will run away only because it will be clear to them that government can break their promises any time in order to subsidize left wing populism

Shelflife

.

Spudmonkey

whiteonion wrote: »

Higher CT could be used to fund better infrastructure, at the moment Ireland has a third world infrastructure to be honest.

No. Higher CT would simply be used to pay for over inflated state wages and banks debts that we should even have. It would be nice to think that the tax intake would be spent on something that would benefit the economy, like infrastructure and education but it most likely wouldn't.

steve9859

Just because the tax rate went up by 5%, it does not follow that companies would leave. It has taken 2 decades to generate the kind of cluster of expertise that we have in various parts of Ireland - medical devices in limerick and Galway, software and design in East Point etc etc. Anyone who doesnt believe me, take a drive around East Point business park, and see the vast number of hardware and software companies that cluster around each other - this of course generate opportunities for our own entrepeneurs to thrive. Oracle for one, place a massive value on this cluster, and would swallow a certain increase in corporation tax.

Low value added manufacturing firms would leave, but these have left already (eg. Dells manufacturing facility). What we are left with right now is the high value added firms that place great value on the cluster of expertise that cannot be replicated elsewhere immediately (though admittedly technology is making it easier to make partnerships work from a distance through on-line design platforms etc).

A 5% increase wouldnt drive an exodus, a 10% might. As one poster said already, I dont want to test where that line is right now!

And the other issue is that ANY messing with the tax rate tells our inward investment partners that the tax rate is no longer stable, and the one thing that they do want is stability to enable them to plan ahead. If it were increased slightly, and then Legislation put in place to ensure that it would not change again for 10 years, that might address their concern around stability.

But even given all that, I dont think this is the right time to be testing where the line is, as we are so dependent on these guys right now!

thebman

whiteonion wrote: »

Where would the MNCs go to if taxes were raised? There are not many in Europe with a corporation tax below 20%. Also it is foolish to make oneself to dependent on big MNCs, what's next if they threaten us with moving out if we don't implement the same environmental laws and labour laws like Nigeria should we succumb under these threats too?

Other countries have far lower energy costs in particular as well as wages in many areas. Road and Communications infrastructures are also much better in other countries though they are improving here slowly to in the case of roads. Are Broadband is still beyond pathetic and about 10 times more expensive than it should be for consumers and business for about half the speed you'd get in many advanced countries and that is being generous.

A friend in Sweden has a 100Mbps broadband connection in his house and doesn't know what contention or download limits are. When I told him about Irish broadband, he literally laughed at me and told me how backward that seemed to him to have download limits and less than 50Mbps broadband which he had years previously.

keithclancy

thebman wrote: »

Other countries have far lower energy costs in particular as well as wages in many areas. Road and Communications infrastructures are also much better in other countries though they are improving here slowly to in the case of roads. Are Broadband is still beyond pathetic and about 10 times more expensive than it should be for consumers and business for about half the speed you'd get in many advanced countries and that is being generous.

A friend in Sweden has a 100Mbps broadband connection in his house and doesn't know what contention or download limits are. When I told him about Irish broadband, he literally laughed at me and told me how backward that seemed to him to have download limits and less than 50Mbps broadband which he had years previously.

The Energy Costs are about the same compared to most western eu countries.
Roads in Ireland on the main routes are quite good by European standards.

The broadband thing .. its around the same price in Ireland for UPC as it is here, think theres a euro in the difference of the 30mb package.

Germany is just as bad if you live in the sticks

jmayo

whiteonion wrote: »

How are the Nordics able to have more strict labour laws, higher taxes in all levels of society and still have a prosperous economy. Ireland has much lower taxes and is doing pretty badly. If your theory was correct it should have been the other way around now shouldn't it?

FFS stop comparing us to real economies with real indigenous industry, with real home grown world leading multinationals.

I hate it when people start comparing apples to spuds.

For a start Norway has huge amount of oil/gas and they actually have indigenous industry believe it or not like Statoil, Telenor, Norsk Hydro, Kverneland.
Sweden more so where they have some large multinationals.
Ever heard of Scania, Volvo, Saab, Ericsson, Husqvarna, Tetra Pak, or IKEA ?
Finland has Fiskars, Kone, Nokia, Valtra, Patria, Ahlstrom.
Who have we got apart from Ryan Air, Kerry Group, Fyffes, CRH, Glanbia, Glen Dimplex, Elan.

Please notice how many of those are food related and not heavy industry or technology.

whiteonion wrote: »

I think most people would prefer raising taxes over cutting down social services to third world levels.

Hyperbole much.

whiteonion wrote: »

Well I suppose they could raise the airport tax a bit more. People won't stop flying because of another €10 tax slapped on their ticket.

The more I read your posts the more I believe you really haven't a clue.
Why do I assume you are a young student of some sort ?

whiteonion

jmayo wrote: »

FFS stop comparing us to real economies with real indigenous industry, with real home grown world leading multinationals.

I hate it when people start comparing apples to spuds.

For a start Norway has huge amount of oil/gas and they actually have indigenous industry believe it or not like Statoil, Telenor, Norsk Hydro, Kverneland.
Sweden more so where they have some large multinationals.
Ever heard of Scania, Volvo, Saab, Ericsson, Husqvarna, Tetra Pak, or IKEA ?
Finland has Fiskars, Kone, Nokia, Valtra, Patria, Ahlstrom.
Who have we got apart from Ryan Air, Kerry Group, Fyffes, CRH, Glanbia, Glen Dimplex, Elan.

Please notice how many of those are food related and not heavy industry or technology.



Hyperbole much.



The more I read your posts the more I believe you really haven't a clue.
Why do I assume you are a young student of some sort ?

I'm not a student, I never was a student and I never will be a student.
I work

Spudmonkey

whiteonion wrote: »

I'm not a student, I never was a student and I never will be a student.
I work

Them fecking students, leeches....

Where do you work? In a company that brings real wealth into the country, or in a business that simply moves money around internally (vital though these may be)

average_runner

Need to keep the Corporation tax at 12.5% or lower it!

We need mulit national companies big time, look at it over the last two days, 250 technology jobs are to be created.

High skill jobs are what we need, the unskill people that are not working need to get on to courses and start up skilling now or else they be not working ever again or will end up leaving the country.

keithclancy

average_runner wrote: »

Need to keep the Corporation tax at 12.5% or lower it!

We need mulit national companies big time, look at it over the last two days, 250 technology jobs are to be created.

High skill jobs are what we need, the unskill people that are not working need to get on to courses and start up skilling now or else they be not working ever again or will end up leaving the country.

And where does the money come from to invest in infrastructure ?

Are you expecting the EU to pay for that aswell ?

RichardAnd

keithclancy wrote: »

And where does the money come from to invest in infrastructure ?

Are you expecting the EU to pay for that aswell ?

His point was simply that raising corp tax is, at present, not a viable option. As has been discussed before, raising CT isn't simply a case of putting up the tax and getting more more rather, it's a case of putting up the tax and risk loosing money.

For now, CT should simply be parked at where it is and not touched.