No it would not. The opposite is the case. The reason we need to protect our CT is not to protect the rate but to protect our ability to adjust the rate, when and if we see fit.Originally Posted by Ireland2015
Personally, I would like us to increase the rate by 2.5% for 3 years, with a promise to reduce the rate by 1.5% for the 3 years after.
Sorry for trying to answer a question with questions-
What message do you think would Ireland send out to international business and to other still-sovereign governments if Ireland was to increase it's CT rates, following the opportunistic and hypocritical demands of competitors of Ireland for FDI?
What message would it send to the existing MNCs?
What political precedent would it set, not alone for Ireland but for other small countries within the EU?
What effect would it have on the fragile Irish economy?
It is obvious that increasing CT rates, in the current political and economic context, would be fairly disastrous for Ireland.
Demolition of the Irish economy may not be in the EU's best interest. Departing MNCs would probably relocate outside the EU, (consider the recent competition between Ireland and Israel for the 0.5billion euro Intel investment).
What are the arguments in favour of increasing the rates? The ones articulated here on p.ie are, for example,
-The Irish economy should not be dependent on FDI or MNC investments. Therefore their elimination is a good thing. It should have it's own global-level exporting industries instead.
-Ireland is begging from the EU, therefore it should do as it's told by EU politicians and raise it's CT rates.
-The increased tax rates will consequently generate increased tax revenue.
-The current rate is immoral and represents a tax scam and characterises the country as a tax haven in an international community of morally upstanding nations. Therefore for moral reasons, the rate should be increased.
-The gesture of increasing the rate would assist EU politicians in justifying to their electorate the "bail-out" loans to feckless and irresponsible Ireland.
Pay your money and take your choice, but there is little logic in any of these arguments, save for those with an idealogical interest in the demolition of the economy or for for those competitor countries happy to oblige relocating MNCs with their own package of incentives.
The elimination of incentives is not realistic in a fiercely competitive world. Among other tax changes, at least 2 rates could be introduced - a standard 12.5% rate and a 0% rate for local innovative start-up businesses for the first 3 years, with a gradual increase after that.
Considering the current economic context, rather than increasing CT rates, further incentives such as the brilliant French incentives for R&D companies should be introduced. The negotiations with the EU should include discussions on how low to cut the standard CT rate in order to generate jobs and income tax and reduce dependency on social welfare.
Because Official D'Ireland simply cannot conceive of an Ireland where the vast bulk of employment and wealth is provided by strong world-class indigenous industry.
No, better to beg for scraps from the tables of our international masters, in return for a small slice of the profits getting trousered by the native gombeen rubber-stamping class. That's the way forward alright.
Sure why would ye be bothered comparing yourself and trying to emulate the success of other small trading nations like Holland, Denmark, Finland, Switzerland, Singapore? Don't be coming out with that auld crazy talk now, just you keep the head down and slave for your masters, to keep them in the lifestyle that they deserve, there's a good peasant.
If you think we will be able to determine our own tax rate, you are deluded. The IMF is here, forget about the eu, look at the actions the IMF around the world, we determine very very little now.
Either we become creative and give enough to retain a partial hold of self-determination or we better all start learning German.
Are you saying that encouraging FDI and simultaneously encouraging indigenous industry is impossible?
I suggested incentives for innovative native start-ups. The world-class native agri-food industry is doing pretty well and all native industries such as Energy, nanotech, software design, tourism etc can be given more incentives to grow.
I guess you're against FDI on idealogical grounds and job maintenance and creation are not high on your agenda. Fair enough.
Wouldn't it be great if there was no reliance on MNCs? Then any of them wanting for whatever reason to locate in Ireland would have to comply with whatever tax rate was demanded of them, or take a hike. Wouldn't it be great if international companies were lining up at the proverbial door begging the Irish to work for them? Wouldn't it be great if Ireland had it's own army of huge indigenous industries dominating world markets and making everyone rich? Yeah enough of that ol' crazy talk now. There are enough cranks and wishful thinkers here to maintain the Irish tradition of talking the talk while the young take the emigrants walk.
What's this "Official Ireland" lark?
What indigenous industry does Singapore have?
The more I read your post the more absurd it appears. As an alternative to "slaving" for MNC or FDI "Masters" as you put it, you propose that Ireland emulate countries like Switzerland and Singapore, which is quite astonishing given that Switzerlands major industry, banking(!), is totally dependent on FDI!
Singapore's economy is hugely dependent on western MNCs and FDI and markets itself abroad as a Gateway to Asia for western Multinationals and financial services companies!
Bar Finland, the countries you mentioned are also favoured by their geographical location on centuries-old established trade routes and adjacent to major population centres. Finland also had it's banking crisis in the 90's!
It's easy to be a socialist patriot - never having to think pragmatically about awkward things in the real world like job provision.
Last edited by Doodah; 26th March 2011 at 11:45 PM.
The corporation tax rate is now treated as some sort of fetish when in reality it was a specific policy for a specific time. While it might be correct to keep it for the time being, I would have no problem with introducing some criteria - eg. it should not apply to companies with less than 30 employees, etc. - in order to stop foreign companies opening offices in the IFSC purely to avail of our tax rate. We are a country not a tax haven - 1916 was about depending on our own resources, not about siphoning off the profits from the labours of others.
A previous poster made a point about the excellent R&D incentives offered by France - how can a low-tax country offer similar incentives if the tax rate is so low to begin with? The logical thing from a multinational point of view is to do low-skill work in Ireland and R&D in France. To a large extent, a low-tax economy is a low-skill economy.
Britain is reducing corporation tax but is excluding banks from the low rate - we should look at introducing a higher tax rate for banks also.
We should also look at eliminating the whole parasitic tax avoidance industry - perhaps starting by introducing a 500% VAT rate on services of tax consultants.
We should also not be afraid of looking at the whole CCCTB idea - in the long run it may be to our benefit.
Vive le Québec libre ! Ag beathú na dtochardán ón mbliain 2007.
Converting to low skills means competing with India and china, to do that wages would have to drop by about 60 to 80 per cent at least. Whatever pain we think we are feeling now would seem like a pin prvck.
Either we return to agri sector or we need to figure out how to maintain fdi.
The fact that our 'friends' in Europe want to take the low corporation tax off us so badly, is evidence enough that it's not in our best interests to raise it.
TBH the answer is in some of the posts. What is the problem raising it even .1 of a percent? It's not the fact that it is still low - it is the fact it is going up. That's the problem. Catch 22. We simply cannot raise it. Madness to attack the only part of the economy that is functioning.
The CT rate is a useful red herring with which to fool people.
Im sure FG have plans to cede a percentage or two .
First we have to put up with a few months of charades and tomfoolery .
Then after a 'hard battle' Neville ChamberKenny will come back with a 'good deal '
Yawn .
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