You’ve heard about the “luck of the Irish.” But sometimes luck isn’t a cause, it’s a result.
The Associated Press reports that Ireland has its own immigration problem: lots of big, wealthy high-tech companies are moving there, setting up shop, hiring lots of people and paying them good salaries. We’re talking Google, Yahoo and eBay, among others.
Google’s three-year-old Dublin office has 800 employees, according to the AP.
Moreover, many of the companies have landed in a historically rundown, impoverished section in Dublin, giving it new life.
What is Ireland doing right? Why are high-tech corporate giants leaving Europe for the Emerald Isle?
Ireland’s corporate tax rate of 12.5 percent is the lowest in Europe. Most of the other developed European nations are significantly higher.
According to the Organization for Economic Cooperation and Development, the nominal tax rate on corporate profits is:
U.K. — 30%
Italy — 33%
Spain — 35%
France — 35%
Germany — 38.9%
But it may not be that way for long. The Wall Street Journal reports that Germany, tired of losing business to other lower-tax European Union nations, is looking to cut its corporate tax rate. We don’t know how low yet, but it will have to be a bunch if we’re ever going to be talking about the “luck of the Germans.”
Oh, did we mention that the corporate tax rate in the U.S. is, well, 39.3 percent?
“That kan’t be good!”
Maybe there is a lesson here for U.S. lawmakers.
We live in a global economy, where capital—and jobs—can, and will, shift to whichever country treats it best.
We hear liberals constantly complaining about President Bush and the Republican tax cuts. But the real issue isn’t whether to cut taxes; it’s which taxes to cut. And if we don’t pay close attention to what is going on in Europe—and especially Ireland—we will be the victims of the luck of the Irish.