Is the jig up for our economic one trick "low" corp tax pony? ( Future UK, US =<15% )



Shpake

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My own humble view
I hope the Franco-German detente was not too comfortable with their asses on the hotplate of the cooker,
Because this drive to lower the corpo-tax is going to turn the heat up full blast onto 'High'.
Li'l ole Ireland off there on the western sea-shore doing a solo-run with the corpo tax was possible to be ignored,
but mark ye, when Trump, Theresa May, Orbit the Hungarian fellow all start doing the same thing... {did I read somewhere that one of the baltic or Balkan states wants to do same?}, then that is going to challenge the Franco German social democracy and entire social system big-time.
The French won't be able to afford to pay the dole in the Banlieus any more.
Bataclan will be a picnic in the park once these lads start demonstrating.

But then again, if enough new arrivals come, they might vote in an islamic government :)
Give the people what they want.
 

NYCKY

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So - y'all have heard by now that Trump intends to drop the US Corporation tax to about 15% with an even lower 10% to companies who come home.

Add this now, as of TODAY 21/11/2016 - PM promises businesses tax cut but cools on workers on boards plan



EDIT: Thanks to Oscurito:

Hungary to cut corporate tax rate to lowest in EU



With respect to our Corporation Tax as the main leg of our economic plan, I have been hearing IBEC and other biz bods saying Nothing to see here folks, doesnt matter. We are more than out corporation Tax rate. FDI comes here primarily for our highly educated workforce and as a base to access Europe .. so no worries from these guys. Is this the usual green jersey crap OR is there any truth to this?

So is the jig up? OR is all this really a non-story, nothing to worry about?
Did anyone say anything about a soft landing?
 

Zapped(CAPITALISMROTS)

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daxxdrake
Heading for rocky times ....hang on to your hats and euros....:rolleyes:
 

Franzoni

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Heading for rocky times ....hang on to your hats and euros....:rolleyes:
Wait till Noonan or his successor put the plan into place to start raiding peoples savings to bail out the banks the next time.....



I notice it's been allowed to slip quietly off the radar.........



And there will be a next time.....
 

Hewson

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MNCs locate to other jurisdictions for any number of reasons, and they're not all of American origin, by the way.

Access to a key market is one and wrapped up in that is the availability of an educated workforce with a good grounding in the relevant sector with appropriate language skills. Ireland has built up an enviable skills base in the tech sector since the 1980s. Remember when Atari came to Limerick and it was viewed as a pioneer in computer games technology? Wang and Dell followed on, and Apple, now over 30 years in Cork. All of these enterprises created spinoffs and their own entrepreneurs who went on to make their own contributions to the creation of a thriving tech industry in Ireland.

The Government's job is to create and maintain a business-friendly tax regime. That's what we've done successfully and it's a compliment to Ireland that both Britain and the US are now talking about mimicking what we've done. We've had a good head start though and it's to our advantage. A Company like Apple is unlikely to uproot itself from Ireland and move to the UK because they've belatedly decided to introduce a competitive CT rate. It wouldn't make economic or financial sense.

As for how the US structures its carrot and stick approach to overseas US Corporations, let's wait and see. The drivel spewed out by Trump on the election circuit about punishment and reward for US Companies based abroad amounts to little more than empty rhetoric, and that rhetoric will be modified and toned down to comply with harsh economic realities - dispensable realities when imminent decisions aren't a necessity.

There's one certainty though, and that is that a post-Brexit Europe and a more isolationist and nationalistic US will make for a more competitive environment in attracting FDI.
 

mossyman

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MNCs locate to other jurisdictions for any number of reasons, and they're not all of American origin, by the way.
Approx 70 percent of MNC employment in Ireland is in US companies. You are right Apple isn't going to uproot overnight. But the fact is that there is significant change of mandate within these operations all the time so you have to be constantly winning new investment to replace what has become redundant. The foreign owned sector created no net new jobs between 2000-2014. Employment remaind below the 2000 peak of 184k throughout that whole time. That is how competitive an environment it is. Now with Brexit and Trump it will become much harder to win new investment to replace what will become obselete in these operations. So I would expect to see a gradual decline in numbers employed in the foreign owned sector.
 

cabledude

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Then why does the IDA say our low corporate rate is essential and must be defended to the hilt? Do they not know what they are talking about?
I was referring to my own company. Do you work for a multinational?
 

cabledude

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Bausch & Lomb a few years ago moved one of their production lines to Rochester NY to save costs. The terms and co&nditions of the employees over there were more favourable to the company. It seemed a brilliant idea. Some young executive possible got a massive bonus and a company wife for coming up with this phenomenal idea.

But then the swill hit the fan. Why? Because the folks over there did not have the technical expertise to produce the product as well as the Waterford site could. So, B&L moved the line back to Waterford.

This story is not an isolated one. Remember Dell? Dell used to build really good machines. Then they went to Poland. Who buys Dell now?

I also understand Pfizer had a similar experience.

Its not all about tax lads. Tax is important but the skills, knowledge and experience we bring to the table is a MAJOR factor.
 

mossyman

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I was referring to my own company. Do you work for a multinational?
No. But my point was, while they I'm sure there are many reasons MNCs come to Ireland, tax must be important if IDA say it is and they say our low rate must be defended to the hilt.
 

cabledude

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No. But my point was, while they I'm sure there are many reasons MNCs come to Ireland, tax must be important if IDA say it is and they say our low rate must be defended to the hilt.
You defend everything Mossy.. Everything.
 

mossyman

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You defend everything Mossy.. Everything.
Do you not think our low rate of corporate tax rate is important? That's the only point I was making. I'm not in favour of low taxes and am against the race to the bottom.
 

wombat

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Do you not think our low rate of corporate tax rate is important? That's the only point I was making. I'm not in favour of low taxes and am against the race to the bottom.
It is important and likely vital for some operations like call centres or office backup, less so for established capital intensive operations.
 

TakeitAll

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Other jurisdictions lowering their rate of corporation tax, will test the assumptions made by this jurisdiction that foreign companies come to Ireland because

(a) we've the brightest workforce in the whole wide world
(b) we speak English.
I'd rule point (a) out based on what I observe everyday in the US multinational that I work for.

It is not just the Corp rate it is the IDA grants which is basically the state subsidising by means of these incentives those companies employing.
 

SideysGhost

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Corporation tax is only about 4bn a year, about 10% of tax revenue. And the bulk of that is from local companies. MNCs pay very little corporation tax in reality, they pay much more in PAYE/PRSI/VAT etc. It really isn't a major factor, though the political class and media have convinced themselves that it is.
 


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