I have just been sent a Press Association story I can’t find on the web yet, saying:
Ireland's main opposition party is to call a parliamentary vote on contentious low taxes on company profits.
Enda Kenny, Fine Gael leader, said there were real fears the attractive 12.5% rate was on the IMF/EU's negotiating table.
"There are genuine fears that the Fianna Fail/Green Government will sacrifice our 12.5% corporation tax rate as part of its bailout negotiations," the Opposition leader said.
"A low corporation tax rate is a cornerstone of Ireland's economy, and will play a crucial role in rebuilding the country."
I’d remind you of what Joseph O’Connor said in the Guardian this morning:
We sustained the mediocrities and buffoons who have led us into the swamp, assuring ourselves in the privacy of our deluded consciences that happiness is index-linked to the purported commercial value of the arrangements of bricks that make our houses.
Those mediocrities and buffoons are still there as yet.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
And what will be the consequences for this country? “Call Me Dave” is right to indicate concern about this.
@James from Durham
Serious indeed, but so too has been the abuse that Ireland has promoted of UK taxation
Google, for example, there is almost no tax in the UK because its profits are shifted Ireland. Likewise Microsoft.
If tax was paid on these profits in the UK some of the cost of meeting the obligations that Ireland might create wouuld be met
and let’s remember, it is them over a barrel, not us
Pardon if you’ve read this in any other form/at:
http://www.dailyfinance.co.uk/2010/11/11/one-off-wealth-tax-backed-by-74/
And apologies for using the post as an email !
That’s a real topper johnM, its strange that this hasn’t made the front pages. Disregarding yougov’s extremely odd methodology, they usually get very good coverage.
I have to say, being lucky enough to go to a comprehensive that had the glasgow media group’s ‘Bad news’ in the school library, its great that some corner of the academy is still in such good health.
Another little money-maker revealed ?
http://www.bbc.co.uk/news/business-11796277
@ John M
Very interesting article and comments and of course 74% are in favour. The only surprise is that it isn’t 89% (Leaving out the 10% richest and the 1% who aren’t sure). If you didn’t read all of the comments I think below by Ted8 is the best answer. I would emphasise that we really need to start MAKING products for ourselves and to sell abroad instead of importing everything. It is proven beyond doubt that we cannot rely on Oxbridge Hooray Henrys who think they can pull a few clever tricks in the City and produce a paper profit on which they take a real mega bonus only for it all to prove to have been smoke and mirors, any more than we can sustain a huge public sector into the future. I say people who have worked hard and built REAL businesses for REAL economic growth should keep the vast bulk of their wealth “pour encourager les autres”.
I would add one important rider to the views of Ted8. I think that those pulling the strings in the finance sector over the past 15 to 20 years who did the most damage and took the big bonuses should be pursued, prosecuted and have any traceable assets siezed. (Yes Richard, even if they are in the Isle of Man and our Government readily cooperates in these kind of criminal investigations.)
Ted8
11-12-2010 @ 6:14AM
Ted said…
This is just plain laughable. Great. Let’s have MORE taxes and MORE government spending. I have to assume that the people that thought this up are government funded. There might be the smallest germ of good sense in it if it wasn’t for the fact that it wouldn’t solve the problem. It only solves a short term problem – the long term problem of this country’s addiction to a bloated, inefficient, overbearing state is not sorted at all. All it does is set ‘the bank balance’ back to a theoretical zero. For one day. The government is still racking up unprecedented levels of debt and would no doubt use the opportunity to borrow even more. Especially if Labour got back into power. And the most damaging notion of all is the belief we have all been brainwashed into that government spending promotes growth – real growth only comes from the wealth creating private sector. That’s the private sector completely OUTSIDE and not dependent on government spending. Recirculating the real taxpayer’s money (that’s somebody completely outside of government spending) around the economy does not solve the problem. A contractor who is running a private business but is making a fortune contracted to the government and employing twenty people is still a civil servant, as are all his employees and they are ultimately consuming wealth, not creating it.
Apologies for generalising the thread – I just realised it is about Ireland but I think given the current UK situation the same applies.
I did read the comments.
The trouble with that viewpoint is that it is not possible to establish a manufacturing industry, on the scale of the developing countries, because the wage required for the operators along with other factors (biz rates and the forthcoming “parking spaces levy”, let along planning) effectively set the cost higher here….than there. People set where the product is made by their electing to buy cheaper.
I know of at least one person who buys from China (for electronics parts) and accepts a 30% failure rate of parts as a price worth paying for an overall lower cost !
Irrelevant I know. But biz start-ups are a long drawn-out saga here.
Richard – while I personally agree that holding the tax rate to ransom over the bailout would be lunacy, and that ceteris paribus its probably best for it to go up. But I think declaring that a nation-state setting its tax rate lower than another nation-state’s as ‘tax abuse’ and ‘an act of war’ is frankly a bit offensive. And its why your voice is getting progressively easier to marginalise.
@Daragh McDowell
Hang on…
The EU
Germany
France
All are saying what I’m saying now
So I’m being marginalised, am I?
Weird definition is all I’d say…
@ John M
Not irrelevant at all – you hit the nail right on the head. Globalisation is the viscious child of global capital using the principle of buying everything where it’s cheapest and damn the quality of the goods or the conditions of the workers. But can we just lie down and accept that? Thatcher facilitated the current situation by the abolition of exchange controls so there was a huge migration of investment to cheap wage economies. I am not saying that this was entirely wrong – the Scargills and Red Robbos have a great deal to answer for. We simply have to try to reverse the process and make more things at home. In the words of the lady herself, “there is no alternative” because how else are we going to earn our living in the world? Not by banking services methinks!
This is why bureaucracy and its costs – business rates, parking space levy, planning and so much else – needs to be retrenched. Can we public spend our way out of trouble? Well, maybe we could put off the evil day for a while but then the currency will eventually collapse. Yes, I know that it can be devalued, quantitively eased etc. but that’s no good when the world concludes that it’s worthless because we don’t have a plan. Remember, the pound of 1914 is already down to about two pence in value. Painful? Certainly. But coming out of a fools paradise always is.
We should look at Germany for an example of a country that has looked after its manufacturing industry – still exporting as much as China and four times the UK – and at Ireland for an example of where we are going if we don’t. The situation is nothing short of a national disgrace. We cannot build a decent sized ship anymore. We gave railways to the world and now we have to buy trains from Italy and soon from China (stand by for lots of breakdowns). We build aircraft wings and then… ship them to France to be fixed to the plane.
Think how many hospitals, schools, doctors, nurses, policemen and OK, tax inspectors at a push (but please not happiness and wellbeing counsellors)could be bought if the UK exported as much world class manufacture as does Germany. We DO have the talent. The environment needs to be made attractive, so lets see big “tax and bureaucracy breaks” for new manufacturing industry. Perhaps the salary expectations will have to be less than hitherto but it will be better than starving. Wake up people – this is the death of a nation we are watching.
Again apologies for this thread jumping between Ireland and UK but now I know why I was confused. The article that John M commented on is re the UK.
@Richard Murphy
Well, President Sarkozy’s remarks, as reported by the Telegraph, are as follows:
“It’s obvious that when confronted with a situation like this, there are two levers to use: spending and revenues. I cannot imagine that our Irish friends, in full sovereignty, [would not use] this because they have a greater margin for manoeuvre than others, their taxes being lower than others.”
It is rather more measured than the “casus belli” or “act of war” comment made by some low-level EU negotiator, isn’t it?
Hold on Richard: you originally quoted a source saying (and I quote verbatim from your posting on this blog)
“One European official involved in the talks said that the corporate tax increase would be a casus belli with the Irish”
What is your evidence that this is no longer the view of one official but now the view of the EU, Germany and France?
@woolley
I agree with you on the issue of a lack of investment
But only a Keynesian revolution will solve that
Germany rejected neoliberalism
Unless we do we are sunk
Tax havens are part of what we have to jettison in that case
@Frank Black
So Sarkozy uses diplomatic language
Is that a surprise?
@Richard Murphy
So Sarkozy uses diplomatic language
Is that a surprise?
Coming from Sarkozy, yes.