EU states-"Ireland-no longer low Corp.Tax"

dunsandin · 01-10-2010 11:00PM #1

It appears, perhaps rightly, that we no longer hold the whip hand when it comes to our own affairs. Tonights statement from the EU that in the future, Ireland will not remain as a low tax economy is a damning condemnation of our Governments position. Due to our economic balls-up we now are in the position whereby we have to dance rather than call the tune. Although ostensibly a result of our ailing deceased economy, this has been in the offing since the time of the Lisbon treaty of surrender. As with individuals, when you have money, you have power. Remove the money, and you are dictated to by others. Are we in for a long period of being dictated to? I think we are. As the old saying goes, "no mun, no fun".

MrDarcy · 01-10-2010 11:27PM

Just so you know who is really running the country...

http://www.irishtimes.com/newspaper/breaking/2010/1001/breaking23.html

The American Chamber of Commerce in Ireland has issued a strongly-worded statement calling on the Taoiseach to "categorically rule-out" any increase in the country's corporation tax rates following comments by the EU commissioner for economic and monetary Affairs Olli Rehn earlier today.

Do you see any other group getting assurances??? This kind of rubbish should be faced straight down.

Dirk Gently · 01-10-2010 11:31PM

they might have been better off to just STFU tbh. Puts Cowen in a very awkward position now as if he doesn't raise corpo tax he'll be seen as bowing to corporate demands.

dunsandin · 01-10-2010 11:34PM

Reminds me of a post some time ago by a guy called Dunsandin who said there would be a trade "scuffle" between the EU and the states over Irelands Corporation tax rate. Looks like the gloves are on. Wonder what will happen when the gloves come off??

Scofflaw · 01-10-2010 11:50PM

dunsandin wrote: »

Reminds me of a post some time ago by a guy called Dunsandin who said there would be a trade "scuffle" between the EU and the states over Irelands Corporation tax rate. Looks like the gloves are on. Wonder what will happen when the gloves come off??

It reminds me of a wide variety of inaccurate claims often sparked by such comments. In this case, the Commissioner in question made an observation which is, frankly, likely to be pretty accurate - that we probably won't continue to be a low tax economy. The thread title is therefore pretty inaccurate, since it makes it sound like the EU has issued some kind of decree.

Maybe he shouldn't have said that - although there's no rule that other people can't comment on our economy - but it's no more than has been said a thousand times here on boards.ie and elsewhere. Indeed, he didn't go as far as most posters here would go, and call for an end to the 'low tax' regime - he just observed that it was likely to end.

cordially,
Scofflaw

dunsandin · 02-10-2010 12:20AM

So, with respect Scofflaw, instead of one of your breathy decrees, what is your opinion of the long term effect of a corporation tax rise on our economy? I notice you are very quick to respond to any thread that does not fall within your definition of "un-systemic" . Anything fundamental, or opposed to current Govt policy is sure to get your rapid attention. I suspect your motives and your motivation. Could you please highlight the line where I state that the EU "orders" anything???????????????????????????????????

Scofflaw · 02-10-2010 12:28AM

dunsandin wrote: »

So, with respect Scofflaw, instead of one of your breathy decrees, what is your opinion of the long term effect of a corporation tax rise on our economy?

I suspect a long-term rise in corporation tax would be bad for the strategy of operating as an FDI hub and tax shelter. The same is probably true of CCCTB.

dunsandin wrote: »

I notice you are very quick to respond to any thread that does not fall within your definition of "un-systemic" . Anything fundamental, or opposed to current Govt policy is sure to get your rapid attention. I suspect your motives and your motivation.

I'm not sure what constitutes 'fundamental' or 'un-systemic', but I find inaccuracy irritating, and you're being inaccurate here. I presume your claim that I support government policy results from my daring to challenge you on the subject of NAMA, which was also motivated by correction of your inaccuracies.

You're also being rude, and as far as I can tell calling me some kind of government shill, which is no more acceptable in my direction than in the direction of any other poster.

dunsandin wrote:

Could you please highlight the line where I state that the EU "orders" anything???????????????????????????????????

You're inaccurate in remarkably short order, too. Here's what I said:

The thread title is therefore pretty inaccurate, since it makes it sound like the EU has issued some kind of decree.

Alas, I haven't said that you said the EU ordered anything - I said you've made it sound like that, and the reference to it being the thread title is really quite clear.

regards,
Scofflaw

View · 02-10-2010 12:50AM

dunsandin wrote: »

I suspect your motives and your motivation.

Scofflaw suffers from a strange affliction. He actually reads what people (or Treaties) say. In addition, he doesn't automatically conclude that because things happen after each other that they must be connected.

For instance, he doesn't appear to believe that a crisis today in the state's finances (which had gone off the rails by Q3 2007) is necessarily linked to Lisbon anymore than he appears to believe it is linked to the 9/11 attack.

I realise that it must be difficult for you to comprehend this affliction but please be understanding. A registered charity is being set up for donations to help fund a cure for his unfortunate ailment. Soon he too will be babbling away like the best of Eurosceptics...

Yag reuoY · 02-10-2010 05:15AM

Every decision Ireland now makes gets passed on to Europe for scrutiny and evaluation.

To suggest Ireland aren't in the thralls of the EU is downright absurd.

Nehaxak · 02-10-2010 05:17AM

In fairness though, there'd be an awful lot more on the dole if the multinationals left Ireland. There's no other reason for them to be here other than the tax breaks they get. Even take Microsoft as an example, they're all mostly just box packers in Microsoft's EU base here - there's no other rational reason why they are in Ireland other than the tax breaks.

So yeah, would be pretty feckin' hard on the economy if they all left due to the tax breaks being removed.

Far as I saw the comment and more so the media reporting on it, was to further try to dampen or hurt the Irish economy/people and not just our crap government.
Whether that EU minister meant it in such a way or that it was just media interests pushing the matter, I don't know, but I'd suspect media manipulation over the EU.

Diarmuid · 02-10-2010 07:23AM

MrDarcy wrote: »

Do you see any other group getting assurances??? This kind of rubbish should be faced straight down.

What about the largest unions in the country getting guarantees that their pay wouldn't be cut? As you say, we know who is running this country

dvpower · 02-10-2010 07:47AM

Did someone mention Corporation Tax?
I dont think the EU commissioner specifically mentioned it.

dvpower · 02-10-2010 07:49AM

Yag reuoY wrote: »

Every decision Ireland now makes gets passed on to Europe for scrutiny and evaluation.

To suggest Ireland aren't in the thralls of the EU is downright absurd.

That assertion is downright absurd.

dvpower · 02-10-2010 07:54AM

Nehaxak wrote: »

Even take Microsoft as an example, they're all mostly just box packers in Microsoft's EU base here - there's no other rational reason why they are in Ireland other than the tax breaks.

I think you may be a bit out of date here. Microsoft started here packing boxes, moved up to higher level activities like localisation and are now involved on the design and development of core product features.

ashleey · 02-10-2010 08:51AM

dvpower wrote: »

That assertion is downright absurd.

http://www.independent.ie/business/irish/eu-raises-spectre-of-hike-in-125pc-corporate-rate-2361789.html

Just in case you missed the relevant bit:

"The commission will have to sign off on new spending and revenue targets -- including detailed measures on how they will be met -- when they are set out in a four-year budget plan to be published by Finance Minister Brian Lenihan in November."

dvpower · 02-10-2010 09:29AM

ashleey wrote: »

http://www.independent.ie/business/irish/eu-raises-spectre-of-hike-in-125pc-corporate-rate-2361789.html

Just in case you missed the relevant bit:

"The commission will have to sign off on new spending and revenue targets -- including detailed measures on how they will be met -- when they are set out in a four-year budget plan to be published by Finance Minister Brian Lenihan in November."

We are currently outside of the stability pact, an agreement that we have with the EU. It is sensible that they would want some oversight of our plans to bring ourselves into line. But it is clear that the details of this are for us to decide. It couldn't be more clear that we have a veto in respect of our corporation tax rate.
To suggest, as you do, that we are somehow enslaved by Europe is absurd.

ashleey · 02-10-2010 09:37AM

Good luck with that, then.

Dirk Gently · 02-10-2010 09:59AM

corpo tax will remain at 12.5%

http://www.rte.ie/news/2010/1002/tax.html

Scofflaw · 02-10-2010 10:35AM

dvpower wrote: »

Did someone mention Corporation Tax?
I dont think the EU commissioner specifically mentioned it.

In fact, he specifically said it was none of his business when asked about it, but at no point in any EU-related debate have mere definitive statements of that kind stopped the Chicken Littles from screaming the exact opposite of what was said.

cordially,
Scofflaw

ashleey · 02-10-2010 11:03AM

I think you are dead right Scofflaw, but I can't help feel that what is being said in public by our venerable masters is not quite reflective of how things are going in private. German meps are openly discussing Ireland 's Corp tax rate and they are paying the bills after all. Have you added up the ecb supports to the Irish banking system?

RichardAnd · 02-10-2010 11:32AM

I don't see corporation tax rising. Even if the IMF or Europe got involved, they can't actually dictate what a country does as Ireland will always remain a sovereign state. I also don't believe that they would want to raise corp tax because, contrary to popular belief, the IMF don't actively seek to destroy a country's economy but to stabilise it.

They would see that low corp tax here creates alot of revenue in wages of people employed by the MNCs who would leave if it was higher so raising it really wouldn't make much more money at all.

ashleey · 02-10-2010 12:35PM

The IMF aren't involved at the moment. It's all the ECB. Who is the primary funder of the ECB?

Amhran Nua · 02-10-2010 01:14PM

ashleey wrote: »

Who is the primary funder of the ECB?

Doesn't really matter at this stage, the ECB has always been a ferociously independent entity, the rule of thumb was that the chances of the ECB taking action were inversely proportional to the amount of pressure being put on them. That changed somewhat with the economic crisis of course, but I wouldn't call it a puppet organisation by any stretch.

Jane5 · 02-10-2010 01:48PM

We don't have anything to fear from the Germans, and as such should tell them to blow it out their ass and that we'll keep our corporation tax and any other tax we have, any damn level we feel like.

I mean, why do you think they/ECB are going to such trouble to buy our bonds and keep us ticking along in the Eurozone?

If we defaulted, and left the Eurozone, the entire thing would come crashing down around their ears. The euro would collapse. They are benefiting from the euro at the moment, while we are not. Hence the best thing they could do is try by any means necessary to keep us here, even if it means buying our crappy, crappy debt.

If the Government had any balls, or brains, they would tell the ECB/Germany to bail out Anglo or we crash the Eurozone. That conversation would be over in about ten seconds. Hell, there is more than enough in the EFSF, with some left over, and it would stabilise the whole Eurozone if they did it.

We should not put up with being bullied from Germany though. They know damn well what side their bread is buttered on.

MrDarcy · 02-10-2010 01:51PM

Nehaxak wrote: »

In fairness though, there'd be an awful lot more on the dole if the multinationals left Ireland. There's no other reason for them to be here other than the tax breaks they get. Even take Microsoft as an example, they're all mostly just box packers in Microsoft's EU base here - there's no other rational reason why they are in Ireland other than the tax breaks.

So yeah, would be pretty feckin' hard on the economy if they all left due to the tax breaks being removed.

Far as I saw the comment and more so the media reporting on it, was to further try to dampen or hurt the Irish economy/people and not just our crap government.
Whether that EU minister meant it in such a way or that it was just media interests pushing the matter, I don't know, but I'd suspect media manipulation over the EU.

We have been saying the very same about the construction industry, what would we ever do if the boom ended??? Well now we know to our complete detriment what the ramifactions are when we rely far too much on one particular industry. The multinationals have already indicated that they are looking else where for their next bargain. Where's Dell now?!? Half of Intel out in Leixlip has been closed and you'll see another raft of redundancies from that multinational probably early next year.

We are deluding ourselves if we think that these businesses are here long term, we are no longer the low cost economy that they originally came here for. Regardless of what our CT rate is, these guys already have plans in place to re-gear their business costs by moving to a much lower cost economy.

While they are here, they should be contributing fairly. It is actully scary how the American Chamber of Commerce issues a press release on a Friday morning saying that they want concrete assuarances on Corporate Tax being utterly untouchable and before lunchtime on the same day, the government have gotten down on bended knee to these saps and assured them in no uncertain terms that their wishes have been granted. I hope people remember this when they have an absolute saddle strapped onto their backs this December...

ashleey · 02-10-2010 02:12PM

Exactly to both the last two posts. Dell left despite the current tax rate and Germany should be made to realise who is importing their stuff. Unfortunately it's china so they would probably call your bluff and then get the French to clear up what's left of the euro. Either way it doesn't look pleasant for Ireland.

hatrickpatrick · 02-10-2010 04:02PM

Raising our corporation tax would be a DISASTER.

What is it about trying to be competitive that critics of the tax rate don't seem to understand? Companies will invest in the cheapest, smartest economy they can find. If we want that to be us we need to be competitive.

The EU has always been bitter about our tax rates. Hey lads, if you're not willing to lower your rates to compete with us, not our problem. **** off.

MrDarcy · 02-10-2010 04:05PM

http://www.irishtimes.com/newspaper/breaking/2010/1002/breaking6.html

"The Department of Finance has ruled out any change in the State’s low corporation tax rate – a matter which is emerging as the first battleground between the Government and the EU authorities as work begins on drawing up a drastic four-year austerity plan.
The EU economics commissioner Olli Rehn said yesterday that no tax policy changes should be excluded from the Government’s plan to return the national deficit to 3 per cent of gross domestic product by 2014.
Mr Rehn’s comments, as well as briefings from senior European officials, were taken as raising doubts over whether the State could achieve such dramatic reductions in the national deficit while retaining the 12.5 per cent tax, which has proved controversial with some EU countries."

They are 200% right, as long as we cannot pay our own way and are making a joke out the borrowing/stability & growth rules of the EU, we should not expect to be bailed out, while at the same time, claiming that we cannot raise anymore tax, just because we want to be global people pleasers to the US multinationals when it comes to Corporation Tax.

Our low tax model is not sustainable in the long term, we cannot have 50% of taxpayers outside the tax net, great, we have now learnt that lesson and we seem to be prepared to make the necessary changes.

But a CT rate of 12.5%, also unsustainable and wrong. The EU should rightly make it a condition of any financial support that we must require.

Germany take 15% for CT and they run a stable economy because it does the right things right, we should listen to people who are managing sound economies and not be going around with our heads up our arse telling people that we wil do things our own way when the country is in such a state, we must be the laughing stock of the EU.

MrDarcy · 02-10-2010 04:10PM

hatrickpatrick wrote: »

Raising our corporation tax would be a DISASTER.

What is it about trying to be competitive that critics of the tax rate don't seem to understand? Companies will invest in the cheapest, smartest economy they can find. If we want that to be us we need to be competitive.

The EU has always been bitter about our tax rates. Hey lads, if you're not willing to lower your rates to compete with us, not our problem. **** off.

Complete rubbish. We are not competitive, we have been offsetting our lack of competiveness, by offering a CT rate of 12.5% that is not sustainable for OUR needs. We are going to have to get competive at some point so we may as well get our house in order now and stop trying to cod everyone with our super "aren't we just brilliant" 12.5% CT rate.

We did the same with the property game, "look at us aren't we just great, nobody has to work in Ireland anymore, everyone can be a f*cking property investor!"

The chickens came home to roost and now we are up sh*t creak central without a pair of arms never mind a paddle. The same will happen with the multinational community, we are not competitive, so they are going to head anyway, that's what they do...

astrofool · 02-10-2010 06:03PM

If we raise CT, the net effect, long, term will be less tax returns, this won't help reduce the deficit at all.

dunsandin · 02-10-2010 06:34PM

Scofflaw wrote: »

In fact, he specifically said it was none of his business when asked about it, but at no point in any EU-related debate have mere definitive statements of that kind stopped the Chicken Littles from screaming the exact opposite of what was said.

cordially,
Scofflaw

Again, with respect Scofflaw, and I do recognise that you are a bright type of a lad, but if I had not read through reams of your posts about how we(the realists) were being patently absurd by suggesting that NAMA would be a loss making disaster, I would take what you say with a smaller pinch of salt. No doubt you will retort that NAMA is exactly on track, business plan motoring as required, etc,etc, but if you cannot see that it will lose its pants in the medium to long term, I give up. Equally, if a person takes an overview and draws the conclusion that we are likely, not certain, to be funneled in a certain direction, their opinion has valididity. It is a tad arrogant to dismiss the view that we are going to be dictated to(and incidentally, I care not a whit that it is happening) to a greater extent in the future. I mentioned some weeks ago that some of the FDI companies were watching this very closely, and yet you assume that this is just speculation. It seems to have always had to have happened already before you acknowledge an event as a possibility.

EU states-"Ireland-no longer low Corp.Tax"

Comments