Zerohedge: "Ireland's Corporation Tax about to be Hiked Up"

Cassandra Syndrome

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Zerohedge seems to know the most about this country. He now claims that we have been lied and deceived yet again. Our corporation tax is going to be hiked by the IMF / EUSSR.

One of the sad conclusions about today's Irish bailout is that despite numerous lies to the contrary, the country's corporate tax rate, that staple which has allowed so many corporations to skirt the record US corporate tax rate, is about to be hiked. The bailout ink on Irish pre-foreclosure mortgage note was not even dry (and you bet Bank of America is not going to lose this one) and already the European Commissioner for Economic and Monetary Affairs Olli Rehn showed the now insolvent island who's boss: "When asked in an interview with RTÉ News if the corporate tax rate was now off the table for good, Mr Rehn said that by Ireland's ceasing to be a low tax country this did not imply specific measures, but 'it is likely unfortunately to imply tax increases." Ironically, the biggest losers in this transition to a higher tax rate would be various multi national corporations, as was observed yesterday, while the biggest gainers would be other European states, which would be on a more competitive footing with Ireland when it comes to attracting foreign direct investment and new business domiciles. And since banks such as Bank of America and Citigroup would be among some of the legal tax evasion losers, it was only a matter of time before Citi provided the following reasoning for why Ireland would either not allow a corporate tax hike (we are confident this is inevitable), or why any benefits from such an action would be de minimis (this appears far more reasonable).

First, here a chart showing comparative tax rates among the OECD countries. It becomes obvious why the Irish tax rate is its primary trump card when it comes to attracting foreign business:
What Will Happen To Ireland (And Various MNCs) When Ireland Is Finally Forced To Hike Tax Rates? | zero hedge
 


Shambo

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But but Fianna Failure said it was non negotiable

As an employee of an American co here in GAlway, all I can say is Yikes!
 

HarshBuzz

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I really don't get this (from the persective of the bailouters)

on the one hand, you want to turn Ireland into a debt repayment slave for 20-30 years

but on the other, you want to remove the single most important lever that Ireland has that might enable it to actually pay back these debts

it's nuts
 

Clanrickard

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Zerohedge seems to know the most about this country. He now claims that we have been lied and deceived yet again. Our corporation tax is going to be hiked by the IMF / EUSSR.



What Will Happen To Ireland (And Various MNCs) When Ireland Is Finally Forced To Hike Tax Rates? | zero hedge
Irish Bailout--impact on taxes uncertain | Angry Bear

Reports on the above link that "negotiations are ongoing". What is there to negotiate.? If the government agree to this it will be the ultimate sell out and proof positive that Lisbon was a big fat lie.
 

cozzy121

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Great, back to rearing our young, to be exported like cattle. Thanks bertie, you scum.
 

Mitsui2

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Not doubting zerohedge's credentials for a moment, but surely this Rehn interview is old news? And at least in the bit directly quoted I can't see any straightforward reference to corporation tax.
 

Amach na Casca

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Was watching BBCs coverage of the bailout the other night and prominent EU politican Daniel Gros was saying that Irelands Corporation Tax would likely be going up in about a month after the start of the IMF bailout. They sneakily won't introduce it at the start but wait till the hysteria dies down a bit.
 

vanla sighs

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You must be kidding me? Are FF totally f*cking insane? This will not and can not stand, our low corporation tax is a huge incentive for getting industry into Ireland. This could very well lead to job losses and will deter future investment. This cannot and will not be allowed to stand - when FG/LAB get in they will have to reverse it.

But I wonder if this is really so? Unless I misread it didn't specifically say corporation tax - just tax in general, personal income tax etc. We'll see, CRAZY if true.
 

jacko

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Lenny will do whatever he's told by the IMF

bet 20 or 25% as the new rate
 

grafter1

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Would it really be terrible to raise it to perhaps 15% for the 4 year period and revert to 12.5% in 2015?

I'm not sure how much additional revenue it would raise (about €1Bn?) but it would mean a small portion of the pain being taken by the companies we work for.

Surely its worth a discussion?
 

needle_too

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I consider myself a socialist but I also recognise the fact that our low corporation tax is a huge incentive for getting industry into Ireland.
First time for everything, I suppose.

Welcome to the real world; its complicated, I know but youre heading in the right direction.
 

SideysGhost

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I really don't get this (from the persective of the bailouters)

on the one hand, you want to turn Ireland into a debt repayment slave for 20-30 years

but on the other, you want to remove the single most important lever that Ireland has that might enable it to actually pay back these debts

it's nuts
Nothing about any of this makes any sense whatsoever. Provide possibly up to €200bn in loans to a bankrupt drunk that is trying to deny he doesn't owe the casino hundreds of billions more already? In what f*** ing parallel universe does any of this make sense?

Part of me was angry at the humiliation of the loss of sovereignty, but like most people a part of me was also secretly relieved that at last the adults were coming in to supervise Lenny and Cowen.

But now it seems the Eurocrats are just as irresponsible, just as sly sneaky and dishonest, just as full of blustering denial and lunatic grandiose bullshyte schemes and scams as any FFer.

Time to get this verminous parasite collective of "politicians" off all our backs. It's Us Vs Them now.
 

constitutionus

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I really don't get this (from the persective of the bailouters)

on the one hand, you want to turn Ireland into a debt repayment slave for 20-30 years

but on the other, you want to remove the single most important lever that Ireland has that might enable it to actually pay back these debts

it's nuts
not exactly new though .

look at the banks reposessing the gaffs of property speculators that have tennants in their properties but are in debt, chucking out the tennants who are in there PAYING rents...

..and then trying to flog the gaffs on the same market the original owner couldnt sell in to meet his debts to the bank in the first place ! !

i dont think they care man.

for the record i agree with you, that rate is key to us getting them out quicker.

maybe other agendas at play? alot of people arent happy with us getting all that tax moola.
 

Doodah

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There are quite a few self-promoting scare stories like this floating around, originating primarily from members of the news-generating industry who have no interest whatsoever in the consequences or veracity or otherwise of the "news".
It is obvious to even the most economically illiterate that in the event of a "hike" in corporation tax, foreign direct investment will evaporate and existing multinationals will emigrate to EU competitors.
The capacity of the country to grow economically will be handicapped for a generation and the ability of the country to repay the current sovereign debt will no longer exist.

The logical action to take, in the event of a forced Corporation tax increase, is for Ireland to leave the Euro, declare bankruptcy and renegotiate/default on the sovereign debt.

It would not be rational to do otherwise.

Perhaps the promoters of this particular action might give a rational coherent explanation of the reasons for and the consequences of such a tax increase, instead of boring us with the same old lazy irrational headlines and illogical unexplained reports.
 

mothball

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It only makes sense if they know they won't get their money back. They're slowing down the "contagion" until they attempt a fix Spain and that's worth something to them. In that case, they might as well try to take business out of Ireland as well as laying claim to any semi-state body and our natural resources. Essentially, whatever "we" are putting up as collateral.
 
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Seems like there is new bad news coming out every day. I think we should have a News Holiday some day. It's just a constant chipping away of any faith that you can have in this country. Hopefully this won't happen but if it does happen I am already not looking forward to all the people who will be saying, the government always wanted this, we had always been trying to get this raised. I'm beginning to feel as if we've all gone down the rabbit hole.

Oirish Times, Saturday 1/1/11

The government are now also proposing that all Irish taxpayers should donate a kidney in order to reduce the national debt. During the boom years we all went crazy thinking we needed two kidneys. Everyone was a part of this madness and everyone benefited from the extra filtration and excretion capacity of the extra kidney, some more so than others. This type of ridiculous excess needs to be reduced now that we are entering more austere times. A government source has pointed out that this can only benefit the Irish people and it is in the National Interest. The government says this will affect everyone but that some of those who have only one kidney might be means tested to see if they are exempt.
 

sking81

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If our corporation tax is bumped we'll become and economic backwater, plain and simple. The multinationals have a track record of getting out of here if conditions arent favourable-for example Dell leaving Limerick has devestated the whole Mid West region.

How are we supposed to pay back the IMF if our workforce cant find jobs to create tax revenue?
 

constitutionus

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Would it really be terrible to raise it to perhaps 15% for the 4 year period and revert to 12.5% in 2015?

I'm not sure how much additional revenue it would raise (about €1Bn?) but it would mean a small portion of the pain being taken by the companies we work for.

Surely its worth a discussion?
its about optics dude.

dont underestimate how much money comes in from this from companies that are just plaques on a door. they can be gone quick sharp.

you have to remember that this is about trust and credibility and youve got to understand what a culture of sheer terror these guys operate in. BILLONS was taken out of the banks on the risk of them not being covered by our guarenttee.

now this risk was the equivellent of being struck by lighting twice while ridding a donkey on dollymount strand after winning the lotto and THEN being hit by a meteor...

..but they took the money out.

i agree that raising it to 15% for a while and then lowering it again DOES make sense.

but the signal that sends out is we lied about it staying where it is so why the hell should they believe it will EVER come back down.

i know its kinda sad but thats the markets for ya.
 

sic transit

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Not really a lot in that story apart his need to be able to say "You heard it first", although some of the comments on his analysis are interesting . Politically it's radioactive and as we are not in contravention of any EU directives very hard to sell. He also seems to ignore the fact that the EU is like a dysfunctional family. We're always annoyed with one or other over something or other. The EU cannot be shown to be deliberately increasing unemployment in Ireland. It's hard to gauge the MNC reaction but comments to date suggest they would push very very hard against this.
 


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