Ethics of our Corporation Tax

Rologyro · 04-03-2019 12:15pm #1

I’m starting this thread cause I’d like to know other people’s opinions on whether our government is right to try and keep our low corporation tax, as my own opinion has changed.

As someone who works in IT, I initially believed that our government should do everything in its power to keep our corporation tax low, so Irish people could have good jobs with companies that base themselves here to take advantage of it.

I now think that really it’s morally wrong to facilitate this tax avoidance. We are helping to global gap between the rich and the poor get bigger.

I understand the argument that we are a small country who needs to use whatever means available to keep our economy healthy, but imagine if our economy was based on something that everyone agrees is unsavory, like manufacturing arms, just because we do well out of it doesn’t mean we should continue.

So what’s other people thoughts on this?

LuckyLloyd · 04-03-2019 12:23pm

I think we should recover the actual amount of tax owed to the exchequer as per the applicable rate. That's the starting point.

mayordenis · 04-03-2019 12:28pm

I think the first 2 posts in this thread are not mutually exclusive and agree with both.

It would probably be doing my own job prospective harm, as in many of the companies that I may work in my career could reduce their employment here but it is in essence an immoral race to the bottom.

The starting point however is absolutely that corporations do pay the amount that they should pay. We should actively combat unreasonable transfers, at least attempt to remove egregious acts of tax fraud.

That said, without some manner of global corporation tax parity (which will never and can never happen), then some country is going to have the absolute lowest rate of tax, so where do we draw the line in the sand?

jm08 · 04-03-2019 12:34pm

Rologyro wrote: »

I’m starting this thread cause I’d like to know other people’s opinions on whether our government is right to try and keep our low corporation tax, as my own opinion has changed.

As someone who works in IT, I initially believed that our government should do everything in its power to keep our corporation tax low, so Irish people could have good jobs with companies that base themselves here to take advantage of it.

I now think that really it’s morally wrong to facilitate this tax avoidance. We are helping to global gap between the rich and the poor get bigger.

I understand the argument that we are a small country who needs to use whatever means available to keep our economy healthy, but imagine if our economy was based on something that everyone agrees is unsavory, like manufacturing arms, just because we do well out of it doesn’t mean we should continue.

So what’s other people thoughts on this?

Its not tax avoidance. Countries have different rates and if the tax rate is low, its the country (the Irish State in this instance) is the one that is losing out. Low corporate tax rate is only harming the Irish State, unlike selling arms to for example, Saudi Arabia which are then used to make war with Yemen.

Geuze · 04-03-2019 12:43pm

CT revenue has surged in recent years.

How is the State losing out?

jm08 · 04-03-2019 12:51pm

Geuze wrote: »

CT revenue has surged in recent years.

How is the State losing out?

The CT take would be even more if the rate was higher (for the record, I don't have an issue with the present tax rate).

My point is that I wouldn't put our low CT rate in the same ethical category as selling arms that end up killing people.

Rologyro · 04-03-2019 12:56pm

jm08 wrote: »

My point is that I wouldn't put our low CT rate in the same ethical category as selling arms that end up killing people.

My point was: just because something helps our economy doesn’t mean we should do it.

Obviously killing people is worse than tax avoidance...

lalababa · 04-03-2019 1:10pm

It's a basically unfair system that paye, small and some big businesses and sole traders are paying a higher rate of tax than the big boys. It's a bit like if the top 3 premiership teams got to play all their games at home and picking their own referee.
It's one rule for the big boys and another for the rest.
To add insult to injury the 12% is ridiculously diluted further by loopholes and special agreements.
Hopefully the eu as a whole will continue to tighten up homogenity in the area.
I saw a TV program about a small town in the North of UK where local shops and businesses were struggling big time . I think it was a butcher that was explaining to a friend that he was going to go out of business. The friend happened to be a corporate tax accountant. The friend turned the butchers into a corporate indity to survive. The UK revenue auditors nearly had a baby.

prawnsambo · 04-03-2019 1:14pm

Rologyro wrote: »

My point was: just because something helps our economy doesn’t mean we should do it.

Obviously killing people is worse than tax avoidance...

Yes, but it isn't tax avoidance. Putting aside issues like transfer pricing of course. There are actually lower CT rates elsewhere in the world. And elsewhere in the EU as well. Hungary and Montenegro have 9%, Macedonia, Bosnia Herzegovnia, Andorra and Bulgaria have 10% and Cyprus, Liechtenstein and ourselves have 12.5%. The Isle of Man and Monaco have 0%.

We're not by any means the lowest.

Franz Von Peppercorn · 04-03-2019 1:21pm

lalababa wrote: »

It's a basically unfair system that paye, small and some big businesses and sole traders are paying a higher rate of tax than the big boys. It's a bit like if the top 3 premiership teams got to play all their games at home and picking their own referee.
It's one rule for the big boys and another for the rest.
To add insult to injury the 12% is ridiculously diluted further by loopholes and special agreements.
Hopefully the eu as a whole will continue to tighten up homogenity in the area.
I saw a TV program about a small town in the North of UK where local shops and businesses were struggling big time . I think it was a butcher that was explaining to a friend that he was going to go out of business. The friend happened to be a corporate tax accountant. The friend turned the butchers into a corporate indity to survive. The UK revenue auditors nearly had a baby.

Why wouldn’t the butchers be a corporate entity to begin with. The corporate tax rate is the same for all businesses in Ireland. However small businesses whose owners live entirely off the earnings would be stupid to pay too much corporate tax as they would be doubled taxed.

Rologyro · 04-03-2019 1:43pm

prawnsambo wrote: »

Yes, but it isn't tax avoidance. Putting aside issues like transfer pricing of course. There are actually lower CT rates elsewhere in the world. And elsewhere in the EU as well. Hungary and Montenegro have 9%, Macedonia, Bosnia Herzegovnia, Andorra and Bulgaria have 10% and Cyprus, Liechtenstein and ourselves have 12.5%. The Isle of Man and Monaco have 0%.

We're not by any means the lowest.

The average global corporation tax rate is 23% (or 26% when you take GDP into account).

Agree that some countries are worse than us, but by having a rate that is so much lower, we are part of the problem. Companies are paying tax here rather than where their sales are.

As another poster said, using your argument just leads to a race to the bottom.

Amirani · 04-03-2019 1:51pm

Ireland's ethics (and by extension the ethics of its Government) are to its citizenry. Raising the corporation tax by any notable amount would cause increased hardship to its citizenry. There would be a lower corporate taxation take, and there would be a reduction in jobs. This is not an ethical change to make.

Ireland pushes up its corporation tax rate to 20% and the US multinationals just pay their corporation tax in the US (or an alternative low-tax country) instead. And the fruits of that just flow to the large US shareholders to pay feck all in wealth taxes and capital gains taxes anyway. How is that a more ethical outcome?

jm08 · 04-03-2019 2:17pm

lalababa wrote: »

I saw a TV program about a small town in the North of UK where local shops and businesses were struggling big time . I think it was a butcher that was explaining to a friend that he was going to go out of business. The friend happened to be a corporate tax accountant. The friend turned the butchers into a corporate indity to survive. The UK revenue auditors nearly had a baby.

Would the small towns in the north of England struggle as much if they had multinational employers like Intel or Boston Scientific in the area employing 1000s of local people paying very good wages so that ordinary workers could afford to go to the butchers to buy their meat?

prawnsambo · 04-03-2019 2:36pm

Rologyro wrote: »

The average global corporation tax rate is 23% (or 26% when you take GDP into account).

Agree that some countries are worse than us, but by having a rate that is so much lower, we are part of the problem. Companies are paying tax here rather than where their sales are.

As another poster said, using your argument just leads to a race to the bottom.

You're conflating two differnt things. Transfer pricing (which I excluded from my comparison because it's not confined to low CT territories) is a seperate issue. There is a broad case for it, where there is an IP content that originated somewhere other than where the sale is made or the product manufactured, is an acceptable method of allocating profit to where it's made. On a simplistic example where I invent a product here, manufacture it in (say) Bulgaria and sell it all over the world, there would be tax liability in Bulgaria on the added value from the manufacturing process, a tax liability on the sale markup here and the royalty that the Bulgarian manufacturing plant pays to me, would be tax free here and a deduction against tax in Bulgaria.

The use of the word 'worse' is unnecessarily emotive. The issue for smaller economies is that they have very little competitive advantage over much larger economies and so have to rely on other incentives to attract jobs and business to their shores.

Manic Moran · 04-03-2019 5:37pm

I would presume that an decision to locate anywhere is a multitude of factors, of which corporate tax is only one. Being in the EU with an English language workforce is probably worth paying a few percent extra on tax than setting up in Bulgaria. On the other hand, raising corporate tax to the extent that it becomes a decisive decision criterion will result not in an extra +10% or whatever revenue, but could result in an loss of everything if they up and leave. Not to mention the unemployment costs... Ireland has a bird in the hand right now, and seems to be doing well enough out of it. Is it ready to risk it for greed?

greenfield21 · 04-03-2019 6:21pm

But does corporate tax not directly effect that deicision. I thought I read somewhere that these companies need to bring employees here to meet a certain percentage of the value of total profits filtered through Ireland? So as to avoid shell company's setting up.

blanch152 · 04-03-2019 6:25pm

lalababa wrote: »

It's a basically unfair system that paye, small and some big businesses and sole traders are paying a higher rate of tax than the big boys. It's a bit like if the top 3 premiership teams got to play all their games at home and picking their own referee.
It's one rule for the big boys and another for the rest.
To add insult to injury the 12% is ridiculously diluted further by loopholes and special agreements.
Hopefully the eu as a whole will continue to tighten up homogenity in the area.
I saw a TV program about a small town in the North of UK where local shops and businesses were struggling big time . I think it was a butcher that was explaining to a friend that he was going to go out of business. The friend happened to be a corporate tax accountant. The friend turned the butchers into a corporate indity to survive. The UK revenue auditors nearly had a baby.

PAYE is paid on a different basis than corporation tax.

Small businesses get huge tax exemptions and many pay little tax.

Sole traders are much better off than PAYE.

It is not just a question of the rate of tax.

PeadarCo · 04-03-2019 6:48pm

blanch152 wrote:

Small businesses get huge tax exemptions and many pay little tax.

What's your evidence of this? Sole traders are taxed on taxable income. They are allowed claim expenses(which are regulated by revenue and general tax law) like any normal business. However they face largely the same taxes as everyone else. Nothing that could be described as a huge tax exemption. If you run a small business you also face the close company surcharge.

PeadarCo · 04-03-2019 6:55pm

blanch152 wrote:

Sole traders are much better off than PAYE.

Sole traders are better not incorporating in general at least from a taxation point of view because it makes cash extraction from a business far far expensive as they end up getting double taxed. They pay tax at their standard tax rate and the legal entity also has to pay tax. Obviously a person making the decision should consider more than just the tax impact.

lalababa · 04-03-2019 7:02pm

Franz Von Peppercorn wrote: »

Why wouldn’t the butchers be a corporate entity to begin with. The corporate tax rate is the same for all businesses in Ireland. However small businesses whose owners live entirely off the earnings would be stupid to pay too much corporate tax as they would be doubled taxed.

What in God's name are you on about?

ted1 · 04-03-2019 7:05pm

Rologyro wrote: »

I’m starting this thread cause I’d like to know other people’s opinions on whether our government is right to try and keep our low corporation tax, as my own opinion has changed.

As someone who works in IT, I initially believed that our government should do everything in its power to keep our corporation tax low, so Irish people could have good jobs with companies that base themselves here to take advantage of it.

I now think that really it’s morally wrong to facilitate this tax avoidance. We are helping to global gap between the rich and the poor get bigger.

I understand the argument that we are a small country who needs to use whatever means available to keep our economy healthy, but imagine if our economy was based on something that everyone agrees is unsavory, like manufacturing arms, just because we do well out of it doesn’t mean we should continue.

So what’s other people thoughts on this?

Tax avoidance and low corporation tax are different things

firemansam4 · 04-03-2019 7:23pm

Raising corporation tax significantly may bring in a temporary rise In Revenue but it would do irreparable damage to our economy in the long term.
It is not just the tax but the employment it brings to this country.
Yes there may be an ethical question as to whether it is right or not, but in the global scheme of things us raising our corporation tax is not going to make any real difference other than damaging our own economy.

Rologyro · 04-03-2019 8:06pm

ted1 wrote: »

Tax avoidance and low corporation tax are different things

One of the primary methods [of corporate tax avoidance] is corporate profit-shifting. This is where a multinational company registers its headquarters in a low-corporation tax jurisdiction and then books its profits there, rather than in the country in which it actually makes its sales.source

Wheeliebin30 · 04-03-2019 8:11pm

Corporation tax is 12.5% on profits only.

If they want to take money from the profits after that they still pay tax.

People think this is all the tax big companies pay.

Another myth pushed by the left.

They pay huge tax on behalf of the employees and any money they want to take out is subject to the same tax as anyone else.

Cookie_Monster · 04-03-2019 8:56pm

PeadarCo wrote: »

Sole traders are better not incorporating in general at least from a taxation point of view because it makes cash extraction from a business far far expensive as they end up getting double taxed. They pay tax at their standard tax rate and the legal entity also has to pay tax. Obviously a person making the decision should consider more than just the tax impact.

I've been out of Ireland too long to be current on this but surely it's still more tax efficient to setup a company and rail as many expenses through it as possible and pay yourself a lower salary as a result, thus saving a lot overall?
Can also claim VAT on any expense.

My wife is a H&S consultant here in NZ and I setup a company for her as it's so much more tax efficient, can claim part of mortgage interest, rates, company pays broadband, pays for phones, will shortly own the car, can claim depreciation on any asset (phone, laptop etc), can write off all day to day expenses. You get the GST benefit (local VAT) as a deductible on everything too so thats another 15% saved.
You save a ton paying all these out of pretax income and salary can be lower as a result, paying less tax here again, all for a little bit of corporate tax at the end... why would you not setup a company? and thats with NZ's 28% rate, 12.5% would be even better.

Eric Cartman · 04-03-2019 9:05pm

Rologyro wrote: »

I’m starting this thread cause I’d like to know other people’s opinions on whether our government is right to try and keep our low corporation tax, as my own opinion has changed.

As someone who works in IT, I initially believed that our government should do everything in its power to keep our corporation tax low, so Irish people could have good jobs with companies that base themselves here to take advantage of it.

I now think that really it’s morally wrong to facilitate this tax avoidance. We are helping to global gap between the rich and the poor get bigger.

I understand the argument that we are a small country who needs to use whatever means available to keep our economy healthy, but imagine if our economy was based on something that everyone agrees is unsavory, like manufacturing arms, just because we do well out of it doesn’t mean we should continue.

So what’s other people thoughts on this?

I really haven't heard anything so wrong in my life. Our corporation tax should only ever be debated to go lower. This low rate has transformed Ireland from an agriculture centric poor country into the 5th richest country in the world (per capita) . It is responsible for so much FDI and putting food on so many peoples tables.

James Brown · 04-03-2019 9:29pm

The system encourages a race to the bottom. There's nothing wrong in business making money where it can and availing of more lenient taxation where it can. That said, thankfully we have some forms of social legislation protecting workers or we might be having a 'If we improve standards for workers, Nike might go back to China and we'd lose those jobs' conversation.

Franz Von Peppercorn · 04-03-2019 9:30pm

lalababa wrote: »

What in God's name are you on about?

I’m explaining corporate tax to you.

Franz Von Peppercorn · 04-03-2019 9:35pm

Cookie_Monster wrote: »

I've been out of Ireland too long to be current on this but surely it's still more tax efficient to setup a company and rail as many expenses through it as possible and pay yourself a lower salary as a result, thus saving a lot overall?
Can also claim VAT on any expense.

My wife is a H&S consultant here in NZ and I setup a company for her as it's so much more tax efficient, can claim part of mortgage interest, rates, company pays broadband, pays for phones, will shortly own the car, can claim depreciation on any asset (phone, laptop etc), can write off all day to day expenses. You get the GST benefit (local VAT) as a deductible on everything too so thats another 15% saved.
You save a ton paying all these out of pretax income and salary can be lower as a result, paying less tax here again, all for a little bit of corporate tax at the end... why would you not setup a company? and thats with NZ's 28% rate, 12.5% would be even better.

Other countries tend to be different but in Ireland wages and dividends are taxed as normal income. It makes no sense to pay yourself dividends after you pay corporation tax, unlike the U.K. where dividends are not taxed for the first 30k or so. In the U.K. you can (or at least could a few years ago) get away with no personal tax on approx 40K (dividends and wages) but you will pay corporation tax on the profits. Wages are of course excluded from profits.

In Ireland dividends are taxed as normal income and as a sole trader you can expense what you could have with the company. There’s little or no tax advantage to a company for many.

I think the company is the safer route though, insurance wise, but it doesn’t have the same advantages as other countries with regards tax.

Rologyro · 04-03-2019 11:11pm

Eric Cartman wrote: »

I really haven't heard anything so wrong in my life. Our corporation tax should only ever be debated to go lower. This low rate has transformed Ireland from an agriculture centric poor country into the 5th richest country in the world (per capita) . It is responsible for so much FDI and putting food on so many peoples tables.

I think you’re saying the same thing as I am, but your conclusion is that it is a good thing because our economy benefits.

My argument is that it is not a good thing, because we are helping large corporations avoid paying a fair amount of tax.

You haven’t anything so wrong in your life?

Rologyro · 04-03-2019 11:23pm

Manic Moran wrote: »

I would presume that an decision to locate anywhere is a multitude of factors, of which corporate tax is only one. Being in the EU with an English language workforce is probably worth paying a few percent extra on tax than setting up in Bulgaria. On the other hand, raising corporate tax to the extent that it becomes a decisive decision criterion will result not in an extra +10% or whatever revenue, but could result in an loss of everything if they up and leave. Not to mention the unemployment costs... Ireland has a bird in the hand right now, and seems to be doing well enough out of it. Is it ready to risk it for greed?

Agree that the best thing to do for Ireland is to leave our corporation tax the way it is.

If these companies were taxed based on where they made their sales it would solve this without Ireland having to touch its tax rate. There would be huge resistance to that though.

PeadarCo · 04-03-2019 11:38pm

Cookie_Monster wrote:

I've been out of Ireland too long to be current on this but surely it's still more tax efficient to setup a company and rail as many expenses through it as possible and pay yourself a lower salary as a result, thus saving a lot overall? Can also claim VAT on any expense.

You can rail all the expenses you want but ultimately you will be taxed at your normal tax rate when you try to withdraw the money from the company/legal entity . So you will pay corporation tax and then you will end up paying standard income taxes. Whereas if you were just a sole trader you would just pay your income tax and no corporation tax. You also have to factor in the close company surcharge on retained earnings which off the top of my head to get away from a company needs 5 or more unconnected shareholders. The issue fundamentally is how to get money out of company/legal entity. There is a career there with the topic alone.

prawnsambo · 05-03-2019 12:17am

Rologyro wrote: »

Agree that the best thing to do for Ireland is to leave our corporation tax the way it is.

If these companies were taxed based on where they made their sales it would solve this without Ireland having to touch its tax rate. There would be huge resistance to that though.

You don't appear to grasp the essentials of taxation. You can base tax on where sales are made, but you can't apply that tax to non-existent profits. Or impute a profit to something that wasn't created where the sale was made. It's not that complicated.

Schnitzler Hiyori Geta · 05-03-2019 11:08am

Rologyro wrote: »

I think you’re saying the same thing as I am, but your conclusion is that it is a good thing because our economy benefits.

My argument is that it is not a good thing, because we are helping large corporations avoid paying a fair amount of tax.

You haven’t anything so wrong in your life?

No we aren't. We're simply enforcing our own tax policy.

05-03-2019 12:54pm

it isn't the tax rate as such, it is the numerous loopholes that the multinationals use to avoid paying tax.

https://en.wikipedia.org/wiki/Double_Irish_arrangement

it seems that as quick as they are being shut down,new ones are being created. That is where the ethical question comes in.

There is a lot said about the offshore tax havens like the Caymen Islands and the Bahamas, but Ireland is the channel these companies use to get the money there in the first place.

Amirani · 05-03-2019 1:45pm

Rologyro wrote: »

If these companies were taxed based on where they made their sales it would solve this without Ireland having to touch its tax rate. There would be huge resistance to that though.

This "solves" nothing. You've already shown a certain naivety towards how taxation works, but this just makes it clear.

For example - you have an Irish producer of widgets, that they fully export to the UK. They're owned by a group of people living in Meath and they employ 1000 people in Ireland. They utilise Irish utilities, and are very much an Irish company. They're pretty successful, and make profits of about 10 million per year. Under your proposal, they pay €0 in corporation tax in Ireland. Instead, they must pay tax at whatever rate Brexit "Singapore of Europe" Britain decides to set its ultra competitive tax rates at because all their sales are there?

This is a nonsense proposal and offers perverse incentives for national Governments. Why should taxation revenue on what is clearly Irish entrepreneurship go to the UK Government in this scenario?

James Brown · 05-03-2019 2:38pm

The ultimate verdict regarding ethics and corporation tax is if it benefits the general public. That's the only thing we should be concerning ourselves with. I think too often we use, 'not breaking the law or doing anything wrong' in situations where the tax payer feels the brunt. Also we need a sense of fair play to ensure nobody is getting unfair advantage. A good example is lower taxes on vulture funds which make buying up on the Irish market attractive. This may help the economy but makes the housing crisis worse. If small business is having to fight harder against multinationals that too would stunt any potential growth. We can't leave it at low taxation equals more jobs. It's got many more levels.

Wanderer78 · 05-03-2019 2:39pm

I completely agree with apple founder steve wozniak, that all corporations should be paying at least 50% tax, and I would add, in all jurisdictions. Unfortunately we re nowhere near trying to achieve this, and by the looks of things, we potentially could be going in the opposite direction.

I do think the best way to start tackling this is by partially accepting tax revenues as stocks and shares from the corporations active in our jurisdiction, and placing them into a sovereign wealth fund.

Wanderer78 · 05-03-2019 2:41pm

Matt Barrett wrote:

The ultimate verdict regarding ethics and corporation tax is if it benefits the general public. That's the only thing we should be concerning ourselves with. I think too often we use, 'not breaking the law or doing anything wrong' in situations where the tax payer feels the brunt. Also we need a sense of fair play to ensure nobody is getting unfair advantage. A good example is lower taxes on vulture funds which make buying up on the Irish market attractive. This may help the economy but makes the housing crisis worse. If small business is having to fight harder against multinationals that too would stunt any potential growth. We can't leave it at low taxation equals more jobs. It's got many more levels.

Is there a disconnection going on between our economic needs and our social needs?

James Brown · 05-03-2019 2:46pm

Wanderer78 wrote: »

Is there a disconnection going on between our economic needs and our social needs?

Completely. Look at the economy and job numbers and compare that to the worsening crises. There's a disconnect for certain.

Wanderer78 · 05-03-2019 2:49pm

Matt Barrett wrote:

Completely. Look at the economy a job numbers and compare that to the worsening crises. There's a disconnect for certain.

Completely agree, I'm not convinced the general public, and those in a position of power, including within our political institutions, realise this yet, if this is true, what will cause the turning point!

James Brown · 05-03-2019 3:15pm

Wanderer78 wrote: »

Completely agree, I'm not convinced the general public, and those in a position of power, including within our political institutions, realise this yet, if this is true, what will cause the turning point!

FG/FF are no fools. They are well aware. Some members of the public in the throws of the housing crisis might see the connection but we've the PR spin of 'forever homes' and 'them that want something for nothing' fooling many into believing any working tax payer having a hard time is some how separate from any crisis and the crises only relate to Ne'er-do-wells, so in effect isn't really a crisis. While news of big corporations opening up and new jobs are announced theres less pressure to tackle societal problems. That's another knock on effect of making corporation taxes attractive. We're putting a glaze on a rotting cake.
The turning point will come when we reach the bottom and enough working tax payers are finding it tough to pay their way. Then we can blame FF/FG pandering to the left and vote FF/FG

oscarBravo · 05-03-2019 10:51pm

Wanderer78 wrote: »

...all corporations should be paying at least 50% tax...

As a part-owner of a small business employing 20-odd people, I'll respectfully disagree. With 50% corporation tax, I wouldn't employ anyone.

paul71 · 05-03-2019 11:00pm

Matt Barrett wrote: »

FG/FF are no fools. They are well aware. Some members of the public in the throws of the housing crisis might see the connection but we've the PR spin of 'forever homes' and 'them that want something for nothing' fooling many into believing any working tax payer having a hard time is some how separate from any crisis and the crises only relate to Ne'er-do-wells, so in effect isn't really a crisis. While news of big corporations opening up and new jobs are announced theres less pressure to tackle societal problems. That's another knock on effect of making corporation taxes attractive. We're putting a glaze on a rotting cake.
The turning point will come when we reach the bottom and enough working tax payers are finding it tough to pay their way. Then we can blame FF/FG pandering to the left and vote FF/FG

The disconnect may come at the point where low paid workers (not unemployed) providing vital services to higher paid workers can no longer afford to live in the same city. Essentially a teacher or accountant cannot buy food because the supermarket employee cannot afford to live within 60 miles of a commercial city center.

PeadarCo · 05-03-2019 11:24pm

Matt Barrett wrote:

Completely. Look at the economy and job numbers and compare that to the worsening crises. There's a disconnect for certain.

I assume you are referring to the housing crisis. That is caused in part by the booming economy and that house building has not kept up. Back in the recession there were plenty of unemployment and lots of empty houses. For anyone renting or buying it was a tenants/buyers market. The two housing crisis and employment boom are linked. Now if you were to massively increase corporation tax you could definitely sort out the housing crisis over night. However you would face an issue with the resulting unemployment and emigration. Then again emigration is one way to reduce hospital waiting lists and housing shortages.

The impact of minor increases in the rate and changes to any reliefs available would be interesting to see though.

Geuze · 06-03-2019 12:51am

Wanderer78 wrote: »

I completely agree with apple founder steve wozniak, that all corporations should be paying at least 50% tax, and I would add, in all jurisdictions. Unfortunately we re nowhere near trying to achieve this, and by the looks of things, we potentially could be going in the opposite direction.

I do think the best way to start tackling this is by partially accepting tax revenues as stocks and shares from the corporations active in our jurisdiction, and placing them into a sovereign wealth fund.

Who would you like or hope bears the incidence of this higher CT rate?

The workers, via lower pay rises?

The customers, via higher selling prices?

The shareholders, via lower profits/dividends?

Wanderer78 · 06-03-2019 8:52am

oscarBravo wrote:

As a part-owner of a small business employing 20-odd people, I'll respectfully disagree. With 50% corporation tax, I wouldn't employ anyone.

Is a small business, a large corporation? I'm actually in favour of the introduction of policies that try benefit your business, as many smaller, indigenous businesses, struggle to compete against larger global monopolies and corporations, its currently not a level playing field. have the abilities of creating and promoting our own, I'm also in favour of the promotion of cooperatives.

Geuze wrote:

The shareholders, via lower profits/dividends?

There's clearly methods of wealth extraction occuring with large corporations, regarding avoidance of tax revenues etc, and not only in this country. It's getting to the point of being dangerous now, there's a reason why companies such as apple have multiples of billions sitting in bank accounts around the world, in tax havens such as ourselves. Large corporations are hugely beneficial for our societies in many ways, job creation and the creation of much needed goods and services being such benefits, but what they are truly dreadful at, is wealth distribution. It's important to bear in mind where the 50% figure came from, an actual apple founder!

Some large corporations are so wealthy now, that a large proportion of their business is in fact based in the activities of the financial sector, they're effectively behaving like banks, creating their own wealth, and arguably, money, via methods such as 'share buy backs' etc .

Please be aware, I don't think there's a hope in hell of ever making corporation taxes 50%, not in my lifetime anyway, and an immediate introduction of this would be catastrophic, it would probably lead to a major economic crisis, possibly depression, but this problem isn't going away, expect it to rare it's ugly head again, very soon.

Cryptopagan · 06-03-2019 11:28am

Manic Moran wrote: »

I would presume that an decision to locate anywhere is a multitude of factors, of which corporate tax is only one. Being in the EU with an English language workforce is probably worth paying a few percent extra on tax than setting up in Bulgaria. On the other hand, raising corporate tax to the extent that it becomes a decisive decision criterion will result not in an extra +10% or whatever revenue, but could result in an loss of everything if they up and leave. Not to mention the unemployment costs... Ireland has a bird in the hand right now, and seems to be doing well enough out of it. Is it ready to risk it for greed?

Bringing it into line with our European partners wouldn't be greed though, would it? They would argue that it's greed that keeps it low - greed for investment that might otherwise go to some other EU state. People don't argue that Ireland should raise its corporation tax rates because we'll get loads of extra revenue (Ireland is already heavily dependent on revenue from multinational companies); they argue that it's unfair that Ireland competes on this basis.

James Brown · 06-03-2019 3:37pm

PeadarCo wrote: »

I assume you are referring to the housing crisis. That is caused in part by the booming economy and that house building has not kept up. Back in the recession there were plenty of unemployment and lots of empty houses. For anyone renting or buying it was a tenants/buyers market. The two housing crisis and employment boom are linked. Now if you were to massively increase corporation tax you could definitely sort out the housing crisis over night. However you would face an issue with the resulting unemployment and emigration. Then again emigration is one way to reduce hospital waiting lists and housing shortages.

The impact of minor increases in the rate and changes to any reliefs available would be interesting to see though.

So the government are actively purposefully going ahead with policies to make the economy boomier despite full knowledge that they are exacerbating the housing crisis and lowering the quality of life for the tax payer? You'll note there isn't a direct link between the two. We've not reached the boom of the Celtic Tiger, yet we consistently break records for children homeless, homeless, hospital trolleys etc. There is no parity.
The idea that we can't grow the economy without causing societal suffering tells me we've a big problem with 'the way we do business' and there certainly is a disconnect. It's not acceptable and bad management.

We need look at if making the state attractive to large corporations is fully benefiting the state or is it only doing so in some areas while making others worse?

prawnsambo · 06-03-2019 3:52pm

Matt Barrett wrote: »

So the government are actively purposefully going ahead with policies to make the economy boomier despite full knowledge that they are exacerbating the housing crisis and lowering the quality of life for the tax payer? You'll note there isn't a direct link between the two. We've not reached the boom of the Celtic Tiger, yet we consistently break records for children homeless, homeless, hospital trolleys etc. There is no parity.
The idea that we can't grow the economy without causing societal suffering tells me we've a big problem with 'the way we do business' and there certainly is a disconnect. It's not acceptable and bad management.

We need look at if making the state attractive to large corporations is fully benefiting the state or is it only doing so in some areas while making others worse?

There's obvious time lags you seem to be missing. The economy starts to pick up, this leads to an increase in tax revenue (time lag 1), then there's government incentives/investment in housing (time lag 2) and fiinally completion of extra housing (time lag 3).

James Brown · 06-03-2019 4:01pm

prawnsambo wrote: »

There's obvious time lags you seem to be missing. The economy starts to pick up, this leads to an increase in tax revenue (time lag 1), then there's government incentives/investment in housing (time lag 2) and fiinally completion of extra housing (time lag 3).

I'm responding to the premise of another. We never had this bad a set of crises under, leading up to any boom when the state was doing well economically. My point is the pay off for the economy doing well need not be society suffering to an equal degree. That's all I'm saying.
The idea that society must ultimately suffer for the good of the economy negates the whole point of a growing economy, which is the betterment of society.

I don't buy the 'these things take time' spiel. It's a complete con when the moves aren't made and an excuse for dragging heels.

Ethics of our Corporation Tax

Comments