Cut in corporation tax

wiseguy

http://www.independent.ie/national-news/fury-at-french-leads-to-consideration-of-cut-in-corporation-tax-2654216.html

Last week in Europe, Finance Minister Michael Noonan -- who has previously been markedly restrained in his comments -- sharply criticised the current ECB bailout strategy and, for the first time, openly asked if it offered a realistic road to success.

Now, the Sunday Independent has learned that senior political figures are not ruling out the possibility that the under-fire Irish corporation tax rate of 12.5 per cent might be cut to 10 per cent or an even lower rate -- rather than being increased -- if the Irish Government does not soon receive a similar cut to that secured by Greece to the interest rate being on its bailout.

In a previous thread regarding corporation tax here there were jokes made about cutting the rate, seems like the idea is now being seriously considered.

One source close to the heart of the Government said it had not been discussed at cabinet level yet. But they noted that reducing corporation tax was "not that crazy. If they (the EU) are threatening to destroy us, we have to take whatever steps are necessary to protect ourselves."

Did someone in government actually say this :eek: ouch. Was this deliberately leaked to the media?
Is the media being used here as a tool, in order to get the French to back off with their demands?

I think lowering the rate is a good idea, and the only card left with which we can play.

rodento

At least they are starting to show some balls

dlofnep

They don't want to actually lower it - they just want to play hardball with the EU, and they are right too.

RonMexico

They should lower it to 7.5% - if only to see the look on Sarkozy's face when he finds out.

Inverse to the power of one!

Question is....if we set it to zero, would there be an uptake in companies moving to Ireland, maybe it's a matter of diminishing returns where below a certain point it's worth doing.....but it would still be an interesting calculation none the less.

Perhaps we should ask the IMF?

bbam

rodento wrote: »

At least they are starting to show some balls

Indeed... hopefully they'll do something other than sit round scratching them:rolleyes:

Anita Blow

Well if the papers are to be believed today, where they speak of the reason Cameron and Hague both coming to visit is to forge some alliance against France+Germany in the EU, and we have the backing of the IMF in the US, then I could see this happening.

Scofflaw

I'm not sure that something being in the Sindo necessarily means it's "being seriously considered". Nor would it necessarily impress our new BFF's in the UK, who have complained about our CT rate before. Still, it's a potentially credible threat, compared to default, and if it works, it works.

cordially,
Scofflaw

Boskowski

Ye sure a great way to tackle a budget deficit is to threaten tax breaks.
Does no-one see the perversity of this? While everyone gets fleeced to balance the state coffers over the next ten years we are actually welcoming an even lower rate for the all so high and mighty corporations. More hail the markets screw the people?

On another note I'd like to say it would literally be the act of a spoilt child now that were finally beginning to realise there won't be any easy, no-pain fixes for our self-made mess. No one was ever going to gift us 100 billion, a 'bailout' was only ever going to be a lifeline for pulling ourselves out of the mess and that won't ever be painfree.

In my opinion it's just populistic waffle from a paper I'm beginning to lose all respect for.

thebman

I've read some reports on this and seems that FG think their partners in Europe think they will be a soft touch as they push against the Irish as they have elections coming up.

They think FG will just sit by and take it while they try to maximise their votes but at last FG are making some noise at least.

wiseguy

Boskowski wrote: »

Ye sure a great way to tackle a budget deficit is to threaten tax breaks.
Does no-one see the perversity of this? While everyone gets fleeced to balance the state coffers over the next ten years we are actually welcoming an even lower rate for the all so high and mighty corporations. More hail the markets screw the people?

On another note I'd like to say it would literally be the act of a spoilt child now that were finally beginning to realise there won't be any easy, no-pain fixes for our self-made mess. No one was ever going to gift us 100 billion, a 'bailout' was only ever going to be a lifeline for pulling ourselves out of the mess and that won't ever be painfree.

In my opinion it's just populistic waffle from a paper I'm beginning to lose all respect for.

More companies leads to more jobs, last I checked the country needs jobs.

Dirk Gently

If they (the EU) are threatening to destroy us, we have to take whatever steps are necessary to protect ourselves."

I think that's worthy of a "wow".
I hope this is the thinking within the government and not just the sindo being creative with "unnamed government sources". It would be nice to have an Irish government looking out for Irish interests for a change.

View

Boskowski wrote: »

Ye sure a great way to tackle a budget deficit is to threaten tax breaks.
Does no-one see the perversity of this?

Oh, don't worry about stuff like that - if it means a larger budget deficit, we can always fill the government income-expenditure gap by borrowing from the other EU member states, can't we? I am sure they won't mind loaning us even more money to undercut their corporate tax rates!

Boskowski wrote: »

While everyone gets fleeced to balance the state coffers over the next ten years we are actually welcoming an even lower rate for the all so high and mighty corporations.

Most of the MNCs money is just funneled (tax-free) through here to the Bahamas anyways, so it is not as there is a whole lot of room for cutting their effective CT rate anyway.

hatrickpatrick

Ever watched "Yes, Minister"?
I know it's satirical but one of the true aspects of it is that politicians use press leaks for indirect diplomacy.

Scofflaw

hatrickpatrick wrote: »

Ever watched "Yes, Minister"?
I know it's satirical but one of the true aspects of it is that politicians use press leaks for indirect diplomacy.

Undeniably so - but so do other people, including the media owners themselves, and not everybody who is in the government or PS necessarily reflects actual policy when they're leaking something. In the case of the red-top tabloids, they also just basically make stuff up, or spin comments on rumours of speculation into government policy.

In this case, I'd have to say that the Sindo is very far towards the deniable end of the deniable-reliable spectrum, so that if this was a leak, it's unlikely to represent even a minority genuine policy option, and the likelihood of it being a real leak as opposed to somebody spinning an off the cuff remark by a civil servant is quite low.

cordially,
Scofflaw

RachaelVO

Boskowski wrote: »

Ye sure a great way to tackle a budget deficit is to threaten tax breaks.
Does no-one see the perversity of this? While everyone gets fleeced to balance the state coffers over the next ten years we are actually welcoming an even lower rate for the all so high and mighty corporations. More hail the markets screw the people?

On another note I'd like to say it would literally be the act of a spoilt child now that were finally beginning to realise there won't be any easy, no-pain fixes for our self-made mess. No one was ever going to gift us 100 billion, a 'bailout' was only ever going to be a lifeline for pulling ourselves out of the mess and that won't ever be painfree.

In my opinion it's just populistic waffle from a paper I'm beginning to lose all respect for.

I get why it provokes that response, but a simple question, if the coropation tax is lowered, Ireland becomes more attractive to multinationals. They come in a create loads of jobs. Less people on social welfare, so less government expenditure, and then they pay income tax, so more income. So am I being too simplistic thinking that less is spent and more money comes into the country?

thebman

Well, the real problem with reducing it is the negative affect it could have on relations with the rest of the EU.

However, we aren't in their good books and they (especially France) seem to be working very hard to get into our bad books.

As someone who is actually very pro-EU, this whole Euro crisis and its mismanagement is really damaging Europe and all for the careers of a few politicians that have elections coming up which they will probably lose anyway.

Thinkingaboutit

Another Sunday, another makey-upy Sindo story. Making up and lifting stories is usual for them, but perhaps this might indicate they the electoral loss of the FFailures means Drennan or whoever wrote/made-up this non-story is well out of the loop. This doesn't seem likely.