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We can keep our corpo tax as low as we want...and then some. Here's why.


jane5

Active member
Joined
Mar 12, 2009
Messages
138
I note the latest bully-boy tactics by the Germans, practically demanding that we raise our corporation tax. They should of course realise by now that they are in no position to demand anything.

At the moment the German economy is benefiting tremendously from the whole Eurozone shenanigan, and will also in the future. The ECB is currently buying our bonds when no-one else will, to avoid us defaulting and pulling out of the Eurozone.

Now why would smart people like that buy our crappy, crappy debt? Well, if we pull out of the Eurozone, the whole house of cards comes crashing down. The euro would fail overnight.

So we are in a pretty good bargaining place, from where I'm sitting. There is more than enough in the EFSF to completely bail out Anglo, and still leave plenty. And it cannot be denied that bailing out Anglo, and hence Ireland, would stabilise the Eurozone, and stop the euro falling against the other currencies and once and for all quell the markets anxieties re: Anglo and its effect on the Eurozone.

So why in hell aren't we saying to Germany, and the ECB: "Hey, um, achtung there, we can't bail out Anglo. You do it with the EFSF, or we in Ireland will have funny looking green money with leprechauns on it by sundown. Enjoy the resulting economic fallout, we'll be too busy devaluing to care."

We are in a position of huge power. Surely they realise this?
 
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jane5

Active member
Joined
Mar 12, 2009
Messages
138
Then explain to me why this isn't so.

If we leave the eurozone, it will seriously destabilise, and in all probability, will collapse.

Leaving it, for us, is probably one of our best options right now.

So we have basically nothing to lose. The Germans, on the other hand, do.

What part of this is incorrect? Enlighten me.
 

Passer-by

Well-known member
Joined
Feb 27, 2010
Messages
1,436
I note the latest bully-boy tactics by the Germans, practically demanding that we lower our corporation tax.
They want us to lower them?

We must be in more trouble than I thought if they want us to lower them. :)
 

Old Mr Grouser

Well-known member
Joined
Aug 29, 2009
Messages
6,490
Then explain to me why this isn't so.

If we leave the eurozone, it will seriously destabilise, and in all probability, will collapse.

Leaving it, for us, is probably one of our best options right now.

So we have basically nothing to lose. The Germans, on the other hand, do.

What part of this is incorrect? Enlighten me.
Your talking about two separate things.

1. Corporation Tax. International companies only benefit from Ireland's low rate of Corporation Tax because other countries accept it. Those other countries have only to 'tweak' their own tax laws, so that there are surcharges and restrictions on a Corporation's 'Irish' profits, and Ireland's attractions vanish.

2. " if we pull out of the Eurozone, the whole house of cards comes crashing down. The euro would fail overnight. " The Eurzone is unstable anyway. If Ireland declares itself insolvent and leaves then it's no worse, perhaps better, for the other countries than if Ireland, insolvent, stays in the Eurozone and drags the others down.
 

jane5

Active member
Joined
Mar 12, 2009
Messages
138
Ireland cannot pull out of the eurozone regardless of how bad things get. It can't be done.

We owe our debts in euro. They must be repaid in euro. We cannot 'pull out' of that.
Umm, defaulting kinda means you're not paying it back. So those debts could be in gold doubloons, euros or whatever. It ain't getting paid back.

It won't be anyway. There is no physical way to service the debt that the private banks have run up, even by forcing the public to pay against their wishes, which also will not work, no matter what they think. Everyone I know who HAS a job is leaving the country, in addition to the ones who don't. Tonnes of people are leaving. Even some pensioners I know are choosing to live out their days (and hence spend their pensions) in a different country with more going for it.

No matter what, we have to start thinking of credible alternatives. Forcing the public into penury will not put a dent in these debts, and will cause massive civil unrest, the likes of which have probably not been seen in most of our lifetimes. Most people in addition, will not stay to have this done to them.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
Then explain to me why this isn't so.

If we leave the eurozone, it will seriously destabilise, and in all probability, will collapse.

Leaving it, for us, is probably one of our best options right now.

So we have basically nothing to lose. The Germans, on the other hand, do.

What part of this is incorrect? Enlighten me.
+1

Nothing at all, apart from non conformist thinking and rattling a few cages of the Eurotrons while they read the Sunday editions of their beloved Eurotron papers such as the Guardian.

They will no doubt track you down and pack you in to a back of a military police truck and send you to a "correctional facility" deep underground of the Ministry of Truth. There inside Room 101, you will be tortured to accept the Euro by being confronted with your greatest fear, a naked Brian Cowen, Mary Harney and Michael Noonan lecturing you about the benefits of EU integration for 48 hours constant.
 

Cassandra Syndrome

Well-known member
Joined
Aug 23, 2009
Messages
16,908
Your talking about two separate things.

1. Corporation Tax. International companies only benefit from Ireland's low rate of Corporation Tax because other countries accept it. Those other countries have only to 'tweak' their own tax laws, so that there are surcharges and restrictions on a Corporation's 'Irish' profits, and Ireland's attractions vanish.

2. " if we pull out of the Eurozone, the whole house of cards comes crashing down. The euro would fail overnight. " The Eurzone is unstable anyway. If Ireland declares itself insolvent and leaves then it's no worse, perhaps better, for the other countries than if Ireland, insolvent, stays in the Eurozone and drags the others down.
If we pull out of the Eurozone and default on our debt, it would make the collapse of Lehman Bros look like your local chippie shutting its doors.
 

dapman

Active member
Joined
May 7, 2008
Messages
133
Why dont we just drop our corpo tax to 10% and mop up any multinationals that are currently contemplating a location within Europe? That will go down well along the Rhine, but who cares. Its would go down better over here, roll the dice one more time.
 

ibis

Well-known member
Joined
Mar 12, 2005
Messages
12,359
I note the latest bully-boy tactics by the Germans, practically demanding that we raise our corporation tax. They should of course realise by now that they are in no position to demand anything.
Given the fact "the Germans" in this case amount to two MEPs speaking personally, they are indeed in a position to demand nothing.
 

zeleneye

Well-known member
Joined
Nov 13, 2008
Messages
531
This is being discussed elsewhere
http://www.politics.ie/economy/139467-end-irish-low-corporate-tax-rate.html

However, I think you are missing the point. The point I would ask is: should we not raise our corporate tax rate a couple of points? That would bring in more revenue overnight, whilst keeping our rate lower than other western European economies: Tax rates of Europe - Wikipedia, the free encyclopedia - and thereby retaining this last vestige of our economy's competitiveness.

Why should we not raise to, say, 15%?

Why does nobody challenge the orthodoxy that refuses to contemplate any change?
 

antiestablishmentarian

Well-known member
Joined
May 25, 2009
Messages
2,151
I note the latest bully-boy tactics by the Germans, practically demanding that we raise our corporation tax. They should of course realise by now that they are in no position to demand anything.

At the moment the German economy is benefiting tremendously from the whole Eurozone shenanigan, and will also in the future. The ECB is currently buying our bonds when no-one else will, to avoid us defaulting and pulling out of the Eurozone.

Now why would smart people like that buy our crappy, crappy debt? Well, if we pull out of the Eurozone, the whole house of cards comes crashing down. The euro would fail overnight.

So we are in a pretty good bargaining place, from where I'm sitting. There is more than enough in the EFSF to completely bail out Anglo, and still leave plenty. And it cannot be denied that bailing out Anglo, and hence Ireland, would stabilise the Eurozone, and stop the euro falling against the other currencies and once and for all quell the markets anxieties re: Anglo and its effect on the Eurozone.

So why in hell aren't we saying to Germany, and the ECB: "Hey, um, achtung there, we can't bail out Anglo. You do it with the EFSF, or we in Ireland will have funny looking green money with leprechauns on it by sundown. Enjoy the resulting economic fallout, we'll be too busy devaluing to care."

We are in a position of huge power. Surely they realise this?
If we pulled out it would stabilise the Euro: no need to worry about our sovereign debt problems endangering the single currency.
 

Cato

Moderator
Joined
Aug 21, 2005
Messages
20,561
If we pulled out it would stabilise the Euro: no need to worry about our sovereign debt problems endangering the single currency.
Indeed. It is the possibility that we might default on our debts and our bank's debts that is the real threat to the euro, as if we do so it would annihilate more than a few German banks.
 

jane5

Active member
Joined
Mar 12, 2009
Messages
138
This is being discussed elsewhere
http://www.politics.ie/economy/139467-end-irish-low-corporate-tax-rate.html

However, I think you are missing the point. The point I would ask is: should we not raise our corporate tax rate a couple of points? That would bring in more revenue overnight, whilst keeping our rate lower than other western European economies: Tax rates of Europe - Wikipedia, the free encyclopedia - and thereby retaining this last vestige of our economy's competitiveness.

Why should we not raise to, say, 15%?

Why does nobody challenge the orthodoxy that refuses to contemplate any change?
That is a fairly typical Irish idea-raise prices/taxes and hence revenue will raise and we'll all make more money.

Ideally, we should drop it to 8%, and watch as the MNCs roll in here. This has the added effect of more companies paying corporation tax, albeit at a lower rate, and also taking people off of welfare and employing them, so they are 1) not using tax money up by being on the dole and 2) paying taxes themselves. They spend this earned money in the Irish economy and strengthen that, which means more people stay in work, stay off the dole, and pay taxes.

Raising the corporation tax will finish Ireland. Absolutely finish it, if it isn't finished already.
 

iartaoiseach

Well-known member
Joined
Jan 30, 2009
Messages
1,232
This is being discussed elsewhere
http://www.politics.ie/economy/139467-end-irish-low-corporate-tax-rate.html

However, I think you are missing the point. The point I would ask is: should we not raise our corporate tax rate a couple of points? That would bring in more revenue overnight, whilst keeping our rate lower than other western European economies: Tax rates of Europe - Wikipedia, the free encyclopedia - and thereby retaining this last vestige of our economy's competitiveness.

Why should we not raise to, say, 15%?

Why does nobody challenge the orthodoxy that refuses to contemplate any change?
I don't see why we should not use this opportunity to try to minimize our dependence on multinational corporations who do nothing unless it benefits them full stop. I am not a fantasist and I accept that we will always have a need for a certain amount of MN companies due to our small size and the fact that we aren't endowed with huge amounts of natural resources but this business of asking 'how high' when they say 'jump' is half the reason we are so screwed right now. these corporations are only interested in one thing - ever increasing profits. they have zero loyalty to anyone or any place bar their shareholders. any socially beneficial activities they engage in are only a means to achieving that end and any benefits they receive from this state will only keep them here as long as that situation remains (Dell, Digital and so on) so we can either keep on impoverishing our own businesses and citizens in order to have these soulless giants lavishing us with their favour or we can start now and try to build up our own business base by giving the same breaks and encouragment to irish owned enterprises and then the corporate tax thing wouldn't be such a big stick for the likes of the germans to beat us with. it will most definitely take time but it may be worth it in the long run. I suppose sending Willie O'Dea and Mary Coughlan to wind up the Dell bosses was a good start even if it was unintentional.
 

Old Mr Grouser

Well-known member
Joined
Aug 29, 2009
Messages
6,490
..... International companies only benefit from Ireland's low rate of Corporation Tax because other countries accept it. Those other countries have only to 'tweak' their own tax laws, so that there are surcharges and restrictions on a Corporation's 'Irish' profits, and Ireland's attractions vanish. ....
Would you all please have a look at an article "Double Irish More than Doubles The Tax Savings - Hybrid Structure Reduces Irish, U.S. and Worldwide Taxation - BY JOSEPH B. DARBY III (GREENBERG TRAURIG LLP) AND KELSEY LEMASTER (TYCO HEALTHCARE)" in the International Securitization & Finance Report of May 15, 2007 - http://www.wtexecutive.com/cms/documentstorage/com.tms.cms.document.Document_secur_051507/SR051507.pdf.

They praise Ireland's low tax policy, "Ireland is a vivid and vibrant example of the fact that, when it comes to taxing business profits, less is often more." but they explain that the policy's success depends on many factors, such as the way that the USA tolerates the loss of its tax revenue.
 

MarkD

Active member
Joined
Aug 10, 2005
Messages
124
Website
cork2toronto.blogspot.com
Funny thing is that the article I read the other day about the Double Irish, it was a Dutch tax loophole that allowed Forest Pharmaceutical to send a bunch of cash from Ireland to Bermuda...

http://www.bloomberg.com/news/2010-05-13/american-companies-dodge-60-billion-in-taxes-even-tea-party-would-condemn.html
"To avoid another Irish tax, Forest’s profits don’t fly direct to Bermuda. They have a layover in Amsterdam.

Fees paid to the Bermuda unit pass through yet another subsidiary, Forest Finance BV in the Netherlands, according to the internal Forest document, Dutch corporate records and a person familiar with the transaction.

That route bypasses a 20 percent Irish withholding tax on certain royalties for patents, according to Richard Murphy, a U.K. accountant who worked on similar transactions and is director of Tax Research LLP. The structure takes advantage of an exemption from the levy if payments go to a company in another EU member state, Murphy said."
 

forest

Well-known member
Joined
Mar 19, 2006
Messages
3,363
my dad come up with an idea the other day
Raise corporation but give the company free land that the state now owns to build their factories on
 
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