"Would an EU bailout be all that bad?" - the DEFINITIVE thread

Amhran Nua wrote: »

If expenditure was at 2004 levels, we'd be breaking even right now, or close to, and we're cutting expenditure to that level. I don't recall the CT rate being any higher then. Also, I don't really care what they think is unfair, let them cut their own corporate tax rate. I'm not getting the confusion here - if the CT rate is raised, nobody will be seeing any of their money back this side of the twenty second century.

Expenditure is not at 2004 levels though is it ?
Where is the money supposed to come from ? Do you expect other members of the EU to pay for Irelands problems that are self generated?

I'd expect them to say no less.

No, its not true, competition is not theft. If the UK or any other country wants to compete with Ireland they can just drop their own corporate tax rate, and the UK is living in cloud cuckoo land if they think they can dictate Irish tax law.

As one of the larger contributors to the Union they have a say as opposed to Ireland which is just a mountain of debt at the moment.

Unfortunately I do not think Ireland will have much of a choice.

jimmycrackcorm wrote: »

Veto says no.

Not talking about a veto, politically they have a say.
Look what happened when Angela Merkel spoke about the bonds last week.

Amhran Nua wrote: »

One thing I do note is that Ireland is on the verge of becoming a net contributor. How long do you think it will take for that to happen if the corporation tax rate is adjusted upwards? Talk about cutting off your nose to spite your face.

At the end of the day, the books will have to be balanced, but its apparent that undercutting and driving out FDI from Ireland will not only make that much more difficult, but will in fact increase the overall burden on the EU. There's really no argument here. Once the books are balanced, and they will be, borrowing requirements drop drastically.

I'll put it this way, If the Netherlands has a Corporation tax rate of 25.5% and Ireland raised its rate to 20%, why would they up sticks and move to the Netherlands, or anywhere else for that matter ?

Ireland needs to invest in its infrastructure and have long term incentives for companies to stay in the country, at the moment Ireland is being used as a Tax Bridge into the Union. In the IT Industry for example, most of the work is done abroad and then sold through Ireland to avoid high corporation tax.

Microsoft - Development happens in Israel, sold via Ireland into the EU

Apple - Devlopment Happens in the US, Products are Maufactured in Taiwan.

Google - Majority of work is done in Switzerland, profits funneled through Ireland

Dell - Money pushed through Ireland, Manufacturing moved to Lodz, Poland.

My point is they do not need the Jobs in Ireland, they just need to move the money through Ireland to have a low Corporate tax rate for sales in the EU.

Whats attractive to companies, depending on their industry is Good Transport and Infrastructure, a skilled workforce and a good quality of life for employees and employers, with an honest government running the show.

Tax Breaks (and to a lesser extent Grants) add a SHORT term benefit, in the long term they only cripple the country as there is no money to invest in the infrastructure that keeps business there.

I mean, by your argument, Germany should be a desolate wasteland with everyone unemployed, but its not.

Long term development is the Key, Ireland is pretty young in economic terms and as a result grew too fast with borrowed money.