will obama's tax policies damage Ireland?

jon1981

hi,

I just caught the end of Q&A's last night, i briefly heard that obama could force american companies outside of the US to pay corporate tax or something to that affect, anyway the gist of it was that it would really damage our attractiveness to bring companies here. does anyone have any more information on this?

cheers

Irlbo

Everyone here seems be jumping up and down for this guy,and hoping see him in the white house,but if you look at his policies towards US foreign investment,we wont be faring to well,in an already dwindling economy,I think McCains our man

mike65

It would have a disproportionate impact on Ireland, we are very exposed to the policy if implimented

Mike

mickoneill30

I'm no business man but would a policy like that not just make companies move out of the US and base themselves in India / Ireland / Poland / whatever?

sovtek

Obama isn't going to do anything to hurt American corporations so I wouldn't be worrying yer pretty little heads about Obama rocking any boats.

The_Minister

If he actually follows through on his promise (which he might), then yes, we'd better hope that some raving Klansman takes him out, or that McCain gets elected:pac:
He wants to penalise companies that take jobs overseas by denying them tax breaks, and expanding corporate tax.

mickoneill30

Is there a link to this promise / policy. Googles not helping me out on this one.

leninbenjamin

mickoneill30 wrote: »

Is there a link to this promise / policy. Googles not helping me out on this one.

he's been pretty vague on how he's going to implement it.

you can see the lipservice here: http://www.barackobama.com/issues/economy/

the relevant part is this, moreso the first one:

• End Tax Breaks for Companies that Send Jobs Overseas: Barack Obama and Joe Biden believe that companies should not get billions of dollars in tax deductions for moving their operations overseas. Obama and Biden will also fight to ensure that public contracts are awarded to companies that are committed to American workers.
• Reward Companies that Support American Workers: Barack Obama introduced the Patriot Employer Act of 2007 with Senators Richard Durbin (D-IL) and Sherrod Brown (D-OH) to reward companies that create good jobs with good benefits for American workers. The legislation would provide a tax credit to companies that maintain or increase the number of full-time workers in America relative to those outside the US; maintain their corporate headquarters in America if it has ever been in America; pay decent wages; prepare workers for retirement; provide health insurance; and support employees who serve in the military.

Boggle

He wants to penalise companies that take jobs overseas by denying them tax breaks, and expanding corporate tax.

Does he not have a point though in many respects? I know its against free market principles in many ways but how else can first world countries, with the associated human rights costs (insurance, holiday pay, unions, etc) compete against the likes of China otherwise?

Also, is it not likely that other countries would then follow suit? Personally, I feel the current model of free market is flawed as it means those countries with good human rights will always be less competitive than those with poor human rights - how to address the situation though is beyond me...

Voipjunkie

If and thats a big IF implemented it will not make a huge difference multinationals cannot exclusively operate from with the borders of the US so they will have to have operations abroad for example Dell cannot produce all it computers in the US and ship them around the world it wouldn't work.
Companies that are going to operate in europe need a base in Europe this would not make Ireland any less attractive to base in compared to anywhere else once you are moving outside of the US

the groutch

The_Minister wrote: »

If he actually follows through on his promise (which he might), then yes, we'd better hope that some raving Klansman takes him out, or that McCain gets elected:pac:
He wants to penalise companies that take jobs overseas by denying them tax breaks, and expanding corporate tax.

can moderators get banned?

The_Minister

the groutch wrote: »

can moderators get banned?

Yes. A moderator in a forum that he does not mod is an ordinary user.
It was a (admittadly bad taste) joke about the number of hicks who keep talking about "someone" taking him out, and the two crappy plots to do so. Also about how everyone just assumes that because he's black someone is going to shoot him.:rolleyes:
I don't actually want Obama shot.

EDIT: Feel free to report the post using the smalll symbol in the corner, if you want a mod to review the post. I feel it's obvious that I was being lighthearted, but its up to them.

lostexpectation

it'll give us the kick up the ass we need to develop more home grown business.

djpbarry

Boggle wrote: »

Does he not have a point though in many respects? I know its against free market principles in many ways but how else can first world countries, with the associated human rights costs (insurance, holiday pay, unions, etc) compete against the likes of China otherwise?

Countries like ourselves and the US shouldn't really be trying to compete with the likes of China, largely because, as you allude to, it's extremely difficult to do so. We've got to start looking beyond manufacturing as a pillar of our economy and stop relying on other countries so much for FDI.

Boggle wrote: »

Personally, I feel the current model of free market is flawed as it means those countries with good human rights will always be less competitive than those with poor human rights...

While a little overly-simplistic, I know what you mean. But, at the end of the day, consumers are happy to buy cheaper produce even if human rights abuses have occurred during it's production. I think that is changing though, with more and more people becoming more aware of how goods are produced. Companies are quick to promote their "ethical" image nowadays.

xOxSinéadxOx

why do people love multinationals so much and think they're the be all and end all, it's time we started doing things for ourselves

Macha

Maybe when people stop expecting to do their weekly food shop for €20 and buy a whole wardrobe of clothes for under €100, there would be more European manufacturing and jobs.

molloyjh

Sorry but didn't McCain also want to do something similar? He was quoting Ireland and our (incorrect) corporation tax rate on a number of occasions and saying how the American companies that are here should be back in the US and he wanted to make that happen.

LostinBlanch

Well I heard on newstalk last week, that while US multinationals employ about 120,000 over here, Irish companies employ approx 90,000 in the US. Sop it's not as cut and dried as it seems on the surface.

Nevermind, the fact that Obama more than likely got substantial contributions from the same multinationals.

molloyjh

LostinBlanch wrote: »

Well I heard on newstalk last week, that while US multinationals employ about 120,000 over here, Irish companies employ approx 90,000 in the US. Sop it's not as cut and dried as it seems on the surface.

Nevermind, the fact that Obama more than likely got substantial contributions from the same multinationals.

But those figures are relative to the size of population. 90,000 in the US means very little. Here it's huge.

Akrasia

If Obama closes off the tax loophole that allows corporations to 'transfer price' then Ireland could be in severe danger. I have been talking about this for ages. Ireland is no better than bermuda or the cayman islands. Corporations 'sell' components to irish subsidiaries for peanuts, then sell them to other subsidiaries at inflated cost allowing them to 'generate' massive profits in Ireland where they pay 12% tax.

Its tax evasion, it's a sham and its terribly depressing that the FF PD government were allowed to ride on the back of this loophole for more than a decade while the real productive irish economy was being destroyed by developers and banks.

Its also a part of the 'laffer curve' nonsense where right wingers state that the lower the tax the greater the tax receipt. This is only true because we're encouraging fraud and tax evasion and stealing taxes from other nations who actually did the productive work to generate the wealth.

oscarBravo

"Tax evasion" implies that it's illegal. What law is being broken?

Économiste Monétaire

Akrasia wrote: »

If Obama closes off the tax loophole that allows corporations to 'transfer price' then Ireland could be in severe danger. I have been talking about this for ages. Ireland is no better than bermuda or the cayman islands. Corporations 'sell' components to irish subsidiaries for peanuts, then sell them to other subsidiaries at inflated cost allowing them to 'generate' massive profits in Ireland where they pay 12% tax.

Its tax evasion, it's a sham and its terribly depressing that the FF PD government were allowed to ride on the back of this loophole for more than a decade while the real productive irish economy was being destroyed by developers and banks.

Its also a part of the 'laffer curve' nonsense where right wingers state that the lower the tax the greater the tax receipt. This is only true because we're encouraging fraud and tax evasion and stealing taxes from other nations who actually did the productive work to generate the wealth.

First, transfer pricing is tax avoidance. Second, that's not what the Laffer curve states.

Sand

Yep, we're effectively screwed. Just how badly screwed is a matter of debate, but far and away McCain would have been a better option from an Irish point of view.

Ireland is already under tremendous cost pressures from EU member states like Poland. Its cheaper to do business in Poland, about the only thing holding them in Ireland currently [and they are currently moving everything that isnt nailed down abroad as it is] is the corporation tax.

If Obama makes concrete efforts to make it less attractive for US multinationals to declare income under Irish taxation [ and he will, its a no brainer electorate winning move to act to punish corporations moving american jobs overseas], then thats one more additional pressure on an economy thats already tottering.

So yes, were screwed.

why do people love multinationals so much and think they're the be all and end all, it's time we started doing things for ourselves

Yeah, we tried protectionism for something like 60-70 years. Then we tried tax and spend. We got the 80s. As bad as the current situation is, its nothing like the 80s when hordes of young Irish people abandoned the country in droves as it sank into ruin.

Theres nothing stopping Irish business's from developing and succeeding under the current model. There have been some quiet success stories. And some loud ones. But in terms of the Irish budget, the tax take on foreign corporations declaring their income here is completely vital, the employment they provide with the knock on spending in the economy is completely vital.

K-9

Don't think there is much we can do about US Govt. tax policy!

blast05

I'm sure i read somewhere over the last couple of weeks that the Democrats have a list of 10 areas / zones that they want to tackle including China due to the way the wouldn't adjust their currency (or something like that) and obvious places like the Cayman Islands. Ireland did not feature.

As for

we'd better hope that some raving Klansman takes him out

well 4 lads were arrested this evening on their way from Coolock to Kilbarrack :P

Macha

Seanies32 wrote: »

Don't think there is much we can do about US Govt. tax policy!

Exactly - and doesn't it call into question the mantra of "globalisation, globalisation" that we have followed for the last 20 years? We are now so incredibly dependent on factors that are largely entirely outside our control.

The construction sector, as well, was something we were too dependent on.