Corporation tax: Unfair Advantage?

K-9

HellFireClub wrote: »

Yeah that sounds familar that strategy. I think we now refer to it as, "having too many of your eggs in one basket"... Our first priority should be restoring a viable tax base and start dismantling what has been a failed policy framework in relation to taxation.

For the same reason why we should start dragging all those low paid workers into the tax net where they should have been all along, we need to stop trying to people please everyone and stop trying to convince the rest of the world that we are some sort of economic wonderworld where the usual rules of taxation can be set aside and that a the same time we can still be an economic marvel. Our low tax framework has been proven to be something that shouldn't be touched with a bargepole. We need to stop trying to play fancy football and basically show off, and go back to basics, which is matching expenditure with income. This means reducing expenditure and increasing income...

Corporation Tax is performing well and ahead of target. Indeed it is the reason we are more or less on target re revenues. As a % of GDP, we are in the top 5 in Europe for Corporation tax receipts.

I agree with Income Tax etc.

Inquitus

ei.sdraob wrote: »

http://www.irisheconomy.ie/index.php/2010/11/18/more-on-corporation-tax/

The ratio of Corp Tax to GDP does not correlate with the numbers of people working in the sector, the tax they pay, and the money they spend in the wider economy. Useless stat is Useless stat.

Duiske

Interesting post taken from the IMF - One Simple Fact sticky.

rmarie1 wrote: »

The IMF sometimes advocates "austerity programmes," increasing taxes even when the economy is weak, in order to generate government revenue and bring budgets closer to a balance, thus reducing budget deficits. Countries are often advised to lower their corporate tax rate.

(Wiki)

Perhaps the Governments insistence that they have put a redline under our Corp Tax actually translates to "they were never going to touch it anyway, but lets use it to make ourselves look like good" Interesting that they have not mentioned other tax increases.

I realise that the EU also have a say, but the IMF is the main man here.
The Goverment guaranteed the bank deposits, the EU will guarantee the Governments guarantee, and finally the IMF will guarantee the EU's guarantee of our guarantee. Or something like that.

Inquitus

Duiske wrote: »

I realise that the EU also have a say, but the IMF is the main man here.
The Goverment guaranteed the bank deposits, the EU will guarantee the Governments guarantee, and finally the IMF will guarantee the EU's guarantee of our guarantee. Or something like that.

The EU are the main man here, they are going to put up the vast majority of the money.

keithclancy

Some people here have some seriously twisted views.

On one hand you are all upset at the economic sitiuation of the country, the upcoming economic hardship and how the government and the banks screwed everyone over.

One the other hand you would never want to expect the Multinational Corporations to contribute to an economy that they operate in during times of financial hardship.

Hellfireclub suggested that an increase to 15% which is still well below the EU Average, which I believe is around 22.5%.

In the end the country won't even have a choice, the IMF are in Dublin, for a minister to come out and say "The Corporation Tax rate will be protected" is amusing.

End of the day, if you stick financial hardship on Irelands brightest and best, they'll leave and go somewhere and send money home to their loved ones to pay the debts, completely outside the remit of the revenue commisioner.

If the skills are not in the country the companies will leave anyway.

Inquitus

keithclancy wrote: »

One the other hand you would never want to expect the Multinational Corporations to contribute to an economy that they operate in during times of financial hardship.

They do contribute, they employ directly or indirectly getting on for 300k people, who are mostly professional, and are all part of the around 1m people who actually pay tax in this country. They also make up 15% of our governments revenues. What sort of crazy person would want to mess with that?

David Malone

In the last couple of days I was contacted by a German banker. This person was angry about what was happening to Ireland and wanted to talk as an insider.

She was very frank and confirmed a lot of what I have been arguing for a while - about the coroporation tax, Germany's desire to see it cut and what this woud do to Ireland.

Some of you may have visited my site to read the article about who eh ANglo Irish bond holders are. These two pieces follow on from that and deal with Irish German links,ill feeling and the present fight over the bailout and corporate tax poison pill.

http://golemxiv-credo.blogspot.com/2010/11/why-ireland-is-resisiting-bail-out.html

http://golemxiv-credo.blogspot.com/2010/11/who-bankrupted-ireland.html


I hope this isn't considered rude to post a link like this but I thought some of you might be interested.

Duiske

Inquitus wrote: »

The EU are the main man here, they are going to put up the vast majority of the money.

The EU are putting up a load of IOU's from member states. There is not one cent in that 600 billion EU Emergency Fund. Ultimately, it will be IMF cash that will be flowing if the eurozone finds itself in trouble and those IOU's turn out to be worthless. Hence the IMF keeping a watchful eye on what is going on in Dublin.

ei.sdraob

Inquitus wrote: »

The ratio of Corp Tax to GDP does not correlate with the numbers of people working in the sector, the tax they pay, and the money they spend in the wider economy. Useless stat is Useless stat.

The export wing of the private sector which avails of the low tax is the only good thing this country economy has going for it.

If you are unable to comprehend this then I am sorry.

keithclancy

Inquitus wrote: »

They do contribute, they employ directly or indirectly getting on for 300k people, who are mostly professional, and are all part of the around 1m people who actually pay tax in this country. They also make up 15% of our governments revenues. What sort of crazy person would want to mess with that?

Theres over 400,000 people unemployed.
As I said above .. the Average is around 22.5%, Sklled workforce + English speaking. The Technology companies do not benefit from the lack of infrastructure as Ireland is basically used as a tax base. If it was still much lower than the EU Average, why would they move ? Say if it was raised to 15%.

People are already leaving anyway, they have no choice, they have mortgages and bills to pay. If you have the skills and the qualifications and you cannot get a job in Ireland, whats to stop you working abroad ?

Sort of what happened with the Polish, except with the Irish going abroad to work.

A Skilled workforce is worth its weight in gold, if you do not have that, you can say goodbye to those Multinationals.

Inquitus

ei.sdraob wrote: »

The export wing of the private sector which avails of the low tax is the only good thing this country economy has going for it.

If you are unable to comprehend this then I am sorry.

What has that got to do with the nonsense stats in your blog post, or indeed what I said in regard to them?

keithclancy

David Malone wrote: »

In the last couple of days I was contacted by a German banker. This person was angry about what was happening to Ireland and wanted to talk as an insider.

She was very frank and confirmed a lot of what I have been arguing for a while - about the coroporation tax, Germany's desire to see it cut and what this woud do to Ireland.

Some of you may have visited my site to read the article about who eh ANglo Irish bond holders are. These two pieces follow on from that and deal with Irish German links,ill feeling and the present fight over the bailout and corporate tax poison pill.

http://golemxiv-credo.blogspot.com/2010/11/why-ireland-is-resisiting-bail-out.html

http://golemxiv-credo.blogspot.com/2010/11/who-bankrupted-ireland.html


I hope this isn't considered rude to post a link like this but I thought some of you might be interested.

I find your blog .. Interesting but some of it is a bit too far fetched.

For a start alot of Multinationals do not hold money in an Irish bank, they would only hold operating capital, all profits (if they use someone like Deloitte) would be held offshore.

Second, the EU did not create the situation that Ireland is in.

Third, the EU couldn't organise a pissup in a brewery let alone a massive plot to increase Irelands Corporate tax.

Inquitus

David Malone wrote: »

In the last couple of days I was contacted by a German banker. This person was angry about what was happening to Ireland and wanted to talk as an insider.

She was very frank and confirmed a lot of what I have been arguing for a while - about the coroporation tax, Germany's desire to see it cut and what this woud do to Ireland.

Some of you may have visited my site to read the article about who eh ANglo Irish bond holders are. These two pieces follow on from that and deal with Irish German links,ill feeling and the present fight over the bailout and corporate tax poison pill.

http://golemxiv-credo.blogspot.com/2010/11/why-ireland-is-resisiting-bail-out.html

http://golemxiv-credo.blogspot.com/2010/11/who-bankrupted-ireland.html


I hope this isn't considered rude to post a link like this but I thought some of you might be interested.

Reading your blog posts I find it incredible you got a book published.

David Malone

Hello Keithclancy,

I understand the banks wouldn't keep their capital in Ireland. But if they are registered and domiciled there they do have to declare the profits there and would chose to do so because of Ireland's carefully worked out tax agreements which avoid double taxes.

They would then, as you say, move it off shore. But the advantage to Irish banks remains that the flow of profits gives them a large through put of liquidity. Or at least it used to. And it is a fact that foreign corporations have moved about 20 billion euros out of two of Ireland's big banks just since august.

I would never claim there is a conspiracy. There's no need for anything so involved. Simply one nations desire to gain advatage over another. Germany and others will be very happy for Ireland to be forced to raise its corporation tax. It will cut away one of Ireland's attractions as a corporate base for mulitnationals and as a domicile for SIV's.

As for Europe and its organizational powers I think we can hapily agree on that one.

Thanks for stopping by and taking the time to read.

HellFireClub

K-9 wrote: »

Corporation Tax is performing well and ahead of target. Indeed it is the reason we are more or less on target re revenues. As a % of GDP, we are in the top 5 in Europe for Corporation tax receipts.

All the more reason to gently increase it. We need to stop consulting everyone with a pair of lungs in this country and just make firm but fair decisions that work for Ireland.

RichardAnd

HellFireClub wrote: »

All the more reason to gently increase it. We need to stop consulting everyone with a pair of lungs in this country and just make firm but fair decisions that work for Ireland.

No we don't, we need to leave it alone. Raising it even slightly could spook MNCs into leaving by making them think that there will be further increments. We should be happy with what we're getting from CT tax as it is and not shoot ourselves in the foot by trying to get more.

K-9

HellFireClub wrote: »

All the more reason to gently increase it. We need to stop consulting everyone with a pair of lungs in this country and just make firm but fair decisions that work for Ireland.

There is a perception that this country is a low tax economy. Direct taxes are quite low by European standards but Indirect and Capital taxes are quite high.

I'm not opposed to an increase in Corporation tax but we shouldn't just dispel the idea that it may backfire, especially if our tax rules are under threat.

keithclancy

RichardAnd wrote: »

No we don't, we need to leave it alone. Raising it even slightly could spook MNCs into leaving by making them think that there will be further increments. We should be happy with what we're getting from CT tax as it is and not shoot ourselves in the foot by trying to get more.

The bit in bold would sound strange if it was coming from the voice of an economic powerhouse.

Christ .. I'd love to hear Bertie say that ...

With a few .. eehhhs and aammm .. thrown in for good measure

HellFireClub

RichardAnd wrote: »

No we don't, we need to leave it alone. Raising it even slightly could spook MNCs into leaving by making them think that there will be further increments. We should be happy with what we're getting from CT tax as it is and not shoot ourselves in the foot by trying to get more.

And of course we can't go upsetting them now, can we??? We cannot afford to be happy with any income under any tax heading at the moment, our efforts should be on maximising every Euro of tax under every tax heading, and with equal fortitude and determination, we should be cutting our public spending, and we should be taking absolutely no threats from any party, not the unemployed, not the public sector unions, not the private sector unions, not the pensioners, not the PS worker or the private sector worker, we need to take more tax off EVERYONE and we need to cut EVERY area of public spending, some more than others, but cut we must do and we should be apologising to no person or party...

That's what is required, no more and no less...

HellFireClub

What if the American Chamber of Commerce were to come out tomorrow morning and say that their members have issued a statement that it is not worth their while staying here unless we cut the CT rate from 12.5% to 7.5%.

Where are we then???

RichardAnd

HellFireClub wrote: »

And of course we can't go upsetting them now, can we??? We cannot afford to be happy with any income under any tax heading at the moment, our efforts should be on maximising every Euro of tax under every tax heading, and with equal fortitude and determination, we should be cutting our public spending, and we should be taking absolutely no threats from any party, not the unemployed, not the public sector unions, not the private sector unions, not the pensioners, not the PS worker or the private sector worker, we need to take more tax off EVERYONE and we need to cut EVERY area of public spending, some more than others, but cut we must do and we should be apologising to no person or party...

That's what is required, no more and no less...

If you make cuts and raise taxes indiscriminately, you are firing a gun in a crowded room whilst wearing a blindfold. Cuts should be surgical and tax increases equally so. Yes, CT tax might get us more money, in theory, if it was raised to 15-20% but if enough MNCs up and leave, then it will get us less. It's extremely difficult for a nation to tax its way out of recession.

keithclancy

HellFireClub wrote: »

What if the American Chamber of Commerce were to come out tomorrow morning and say that their members have issued a statement that it is not worth their while staying here unless we cut the CT rate from 12.5% to 7.5%.

Where are we then???

Wouldn't happen, the IRS already loses enough money through Irelands tax loophole.

Victor

Blue_Lagoon wrote: »

Source: http://www.google.com/imgres?imgurl=http://pekin.mae.lu/var/fr/storage/images/media/images/total-tax-rates-for-eu2/178812-1-fre-FR/Total-Tax-Rates-for-EU_reference.jpg&imgrefurl=http://pekin.mae.lu/en/Doing-Business-in-Luxembourg-China/Tax-Information-Luxembourg&usg=__agk5PTIgLqzsKnTp6jq3SOsi27I=&h=306&w=500&sz=36&hl=en&start=16&zoom=1&tbnid=m-t_1-KPE8kUeM:&tbnh=103&tbnw=168&prev=/images%3Fq%3Dcorporate%2Btax%2Brates%2BEU%26um%3D1%26hl%3Den%26sa%3DG%26biw%3D1034%26bih%3D619%26tbs%3Disch:10,488&um=1&itbs=1&iact=hc&vpx=301&vpy=136&dur=4509&hovh=176&hovw=287&tx=142&ty=92&ei=2efjTJikK8XbngfAt7mODw&oei=DefjTM-dH8L7lwfnx8mLDg&esq=2&page=2&ndsp=15&ved=1t:429,r:1,s:16&biw=1034&bih=619

Note the graph compares pre-tax profits to taxes.

HellFireClub

RichardAnd wrote: »

If you make cuts and raise taxes indiscriminately, you are firing a gun in a crowded room whilst wearing a blindfold. Cuts should be surgical and tax increases equally so. Yes, CT tax might get us more money, in theory, if it was raised to 15-20% but if enough MNCs up and leave, then it will get us less. It's extremely difficult for a nation to tax its way out of recession.

I never said it should be done in a random or indiscriminate way. But the attitude should be that EVERYONE is going to have to put their back into it and CONTRIBUTE. Maybe we should leave CT alone, but we could have said at the same time that we want some kind of a once off lump tax off businesses that are in profit. That would at least send some message that we need a contribution. Instead we bend over for these lads and we basically tell them that the pensioners and the unemployed will make a deeper contribution on their behalf.

K-9

HellFireClub wrote: »

I never said it should be done in a random or indiscriminate way. But the attitude should be that EVERYONE is going to have to put their back into it and CONTRIBUTE. Maybe we should leave CT alone, but we could have said at the same time that we want some kind of a once off lump tax off businesses that are in profit. That would at least send some message that we need a contribution. Instead we bend over for these lads and we basically tell them that the pensioners and the unemployed will make a deeper contribution on their behalf.

I'd have no problem with a levy of say 2% for the 4 years of the budget plan.

Multi Nationals allegiance is to the bottom line though, not society, we should know that by now.

HellFireClub

K-9 wrote: »

I'd have no problem with a levy of say 2% for the 4 years of the budget plan.

Multi Nationals allegiance is to the bottom line though, not society, we should know that by now.

Well I'm under no illusions as to what the priorities of the MNC's are, but we have our own bottom line here to worry about and it is in bits. The irony of this is that if our MNC's had a bottom line that came anywhere remotely close to where our bottom line is, they would not be MNC's, they would be dissolved businesses assigned to history...

thebman

HellFireClub wrote: »

The whole approach is what bothers me. We appear to have learnt absolutely nothing here. Sending the wealthiest companies on earth a message that they are completely untouchable in terms of our critically serious budgetary situation, while cutting the poorest people in the state, it's disgusting, there is no other word for it.

There is a serious moral hazard in dealing with vested interests on this basis...

There is a reason they are being treated like they are untouchable, if they are touched they will leave ....

You keep ignoring that point for some reason like there are loads of other reasons they are here.

Please list them...