The Emerald Isle has decided to make itself decidedly less attractive to people the world over.
Ireland is set to announce sweeping changes to its corporate tax structure in its budget¬†on Tuesday, phasing out a loophole that has allowed multinationals to save billions of dollars in tax on their worldwide income.
This is the tax code equivalent of having Jay-Z rewrite Shakespeare. Why would Ireland hamstring itself?
The country has faced sustained criticism over the past 18 months from other European Union members and the United States for its tax rules and Finance Minister Michael Noonan is expected to lay out plans to end an arrangement that has enabled firms such as Google and Apple to cut their overseas tax rates to single digits.¬†
Uber-high tax nations don‚??t like being scorned. So the EU is trying to force people to like them – which didn‚??t work in elementary school and won‚??t work now.¬† And the United States has the¬†highest corporate tax rate on the planet¬†– so we too are in the cafeteria dining alone.
Ireland has to know they‚??re damaging themselves, right?
To maintain Ireland as an attractive destination for business, Noonan could at the same time make improvements to the intellectual property tax regime, and also has room to cut income tax‚?¶.
So they realize lower and less government impediments mean higher returns. How do they have ‚??room to cut income tax‚?Ě¬†(which every government on the planet in fact does)?
‚?¶(Because of) the economy’s surprisingly strong rebound from the debt crisis.
Get that?¬† Ireland‚??s rebound from the debt crisis has been ‚??surprisingly strong‚?Ě¬†– because they fostered such a capital-friendly environment.¬† While the anti-capital US and EU have continued to founder and flounder.
Hey Huge Government US and EU – don‚??t hate, emulate.¬† Ireland as it has been – and Luxembourg and the Netherlands as they are still.
Europe’s top regulator said it believes the online retailer has been receiving state aid from Luxembourg for over a decade by taking advantage of a preferential tax deal with the nation.
Apple, Starbucks, and a unit of the automaker Fiat are also under investigation in Europe for similar tax arrangements in Ireland, the Netherlands and Luxembourg.
The European Commission said it is investigating whether Amazon purposely shifted its money around within European countries to avoid paying higher tax rates.
‚??Shifting money around‚?¶to avoid paying higher taxes‚?Ě¬†is now an EU crime?
“National authorities must not allow selected companies to understate their taxable profits by using favorable calculation methods,” said Joaquin Almunia, Europe’s top competition watchdog. “It is only fair that subsidiaries of multinational companies pay their share of taxes.”
Apparently, disturbingly so.¬† And the US?
President Barack Obama says a loophole that lets companies dodge U.S. taxes by moving their headquarters overseas is unpatriotic‚?¶.
Here‚??s a thought – let‚??s lower tax rates and remove government impediments to entice them to return.¬†¬†Mr. President?
The Obama administration is weighing plans to circumvent Congress and act on its own to curtail tax benefits for United States companies that relocate overseas to lower their tax bills‚?¶.
Not so much.¬† Nothing like the democratic process.
‚??Putting companies on notice is, I think, part of it,‚?Ě¬†(White House press secretary Josh Earnest) said.
Nothing like putting out the Welcome Back mat.
Should we and the EU continue to pummel people with Huge Government policies?¬† Or should we be more like the Less Government likes of Luxembourg, the Netherlands and¬†Hong Kong¬†– a little more inviting to the private investment pols incessantly claim they want?
The coming cascade of cash – rolling out of Ireland and into much more capital-friendly locales – will be yet another visual aide we really shouldn‚??t need.