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As an Irish person, I consider this perspective to be hilariously naive. Without tax incentives, our ability to attract foreign direct investment is massively r

by wrren 9y ago

As an Irish person, I consider this perspective to be hilariously naive. Without tax incentives, our ability to attract foreign direct investment is massively reduced and the jobs that need to attract will instead go to mainland Europe. It might work if we started by establishing a framework of financial transfers between states, but without something like that in place Ireland and a bunch of smaller countries will keep vetoing attempts to normalise tax rates.

jopsen 9y ago
But you are attracting foreign investment at the expense of everybody else. This is like peeing your pants when it's cold outside, it's nice an warm at first :) If you look at America you'll see what this race to the bottom does. Amazons new headquarter selection process is entirely about luring tax incentives out of various states. These schemes are largely outlawed in the EU, for good reason. The play Ireland makes only works because most of the European governments have too much integrity to play this game, and refuse to be beholden by corporate interest.
mark_edward 9y ago
If there only thing your country has to offer is tax shelter instead of infrastructure, talent, resources, etc. Maybe work on that
- WingH 9y ago
  No thanks, I'll take tax shelter over all of the above :)
- wrren 9y ago
  Sure thing boss, and maybe I'll drag the country over and connect it to the mainland and then see if I can seed the place with valuable ores, oil, etc. That'll solve the problem
  - madez 9y ago
    There is no right to equal economic wealth for all regions.
  - alva 9y ago
    Providing the Taoiseach holds the Brexit line throughout, it wouldn't be that surprising if the EU backs off a bit.
stefan_ 9y ago
If your economy is "jobs" in the exchange for favorable taxing & EU access that just makes you a Rentier state. All the value is in the tax avoidance scheme, not whatever the employees are doing. It's not far removed from Saudi-Arabia, the biggest game of the Sims ever played.
- distances 9y ago
  I get the sentiment regarding Saudi-Arabia, but the not what you actually mean by it being a game of Sims. Care to elaborate?
- simonh 9y ago
  It’s not at all like Saudi Arabia. Having those technical and finance jobs in Ireland builds up a reservoirs of skilled labour in those areas that attracts companies. I saw this first hand at at a previous employer. We would preferentially move technology roles to Ireland - speak excellent English, in the EU, cheap office space and plenty of technically capable workers. Without the latter, nurtured by businesses chasing tax advantages, it would have been significantly less attractive. To be honest I think that would be happening to an extent anyway, but certainly many of the tax break business is contributing to establishing economic depth in Ireland in a way extractive industries don’t.
gaius 9y ago
Without tax incentives, our ability to attract foreign direct investment is massively reduced The Irish government hit upon a very clever strategy of collecting subsidies from the EU, spending that money in lieu of tax in its own territory, therefore being able to charge lower corporation tax, luring jobs away from the very economies that were paying those aformentioned subsidies in the first place! Unfortunately the other EU countries have figured out what was happening now.
- deleted 9y ago
  [deleted]
bad_good_guy 9y ago
Ireland is soon to be the only English-as-first-language European country. I would think that is a large factor.
JustAnotherPat 9y ago
The Irish are free to Exit the EU like their British neighbors. Then you can keep your taxes as low as you want.
radicalbyte 9y ago
Ireland, The Netherlands, Sweden, Finland and Denmark. Those are the countries where you can easily find fluent English speakers within the European Union. With the tax equal anywhere in the EU, Ireland would be clearly the #1 place to locate the jobs for large international companies - particularly American ones.
cornholio 9y ago
You have just described a race to the bottom fueled by a tragedy of the commons. The textbook solution is exactly what has been suggested: coordination among players so that the overall welfare is maximized. Sure, if Ireland chooses to pass on this revenue it should be able to do so, but this should not stop France from taxing a Google that is doing business in France from an Ireland PO Box. The philosophy of the common market predates the global digital market and is no longer adequate.
nitwit005 9y ago
If the only way we can succeed is at the expense of others, maybe you should consider failure.
Supernaut 9y ago
Speaking as another Irish person, I find it disheartening to see a compatriot playing to the prejudices of our critics. The country has vastly more to offer than just tax incentives, and it is not and has never been a tax haven in the sense that Bermuda or the Cayman Islands are. We were attracting significant high-tech FDI as far back as the '70s, from companies like Apple, IBM, DEC, Amdahl and Atari. They set up manufacturing and sales operations here, in an era when the corporate tax rate climbed as high as 50%! As simonh noted in his reply to your comment, "Having those technical and finance jobs in Ireland builds up a reservoir of skilled labour in those areas that attracts companies. I saw this first hand at at a previous employer. We would preferentially move technology roles to Ireland - speak excellent English, in the EU, cheap office space and plenty of technically capable workers." Apple's sweetheart deal with the tax authorities here is an embarrassment, but the lesson has been learnt and we won't see that kind of arrangement occurring again.

by wrren 9y ago

jopsen 9y ago

But you are attracting foreign investment at the expense of everybody else. This is like peeing your pants when it's cold outside, it's nice an warm at first :) If you look at America you'll see what this race to the bottom does. Amazons new headquarter selection process is entirely about luring tax incentives out of various states. These schemes are largely outlawed in the EU, for good reason. The play Ireland makes only works because most of the European governments have too much integrity to play this game, and refuse to be beholden by corporate interest.

mark_edward 9y ago

If there only thing your country has to offer is tax shelter instead of infrastructure, talent, resources, etc. Maybe work on that

WingH 9y ago
No thanks, I'll take tax shelter over all of the above :)
wrren 9y ago
Sure thing boss, and maybe I'll drag the country over and connect it to the mainland and then see if I can seed the place with valuable ores, oil, etc. That'll solve the problem
- madez 9y ago
  There is no right to equal economic wealth for all regions.
- alva 9y ago
  Providing the Taoiseach holds the Brexit line throughout, it wouldn't be that surprising if the EU backs off a bit.

stefan_ 9y ago

If your economy is "jobs" in the exchange for favorable taxing & EU access that just makes you a Rentier state. All the value is in the tax avoidance scheme, not whatever the employees are doing. It's not far removed from Saudi-Arabia, the biggest game of the Sims ever played.

distances 9y ago
I get the sentiment regarding Saudi-Arabia, but the not what you actually mean by it being a game of Sims. Care to elaborate?
simonh 9y ago
It’s not at all like Saudi Arabia. Having those technical and finance jobs in Ireland builds up a reservoirs of skilled labour in those areas that attracts companies. I saw this first hand at at a previous employer. We would preferentially move technology roles to Ireland - speak excellent English, in the EU, cheap office space and plenty of technically capable workers. Without the latter, nurtured by businesses chasing tax advantages, it would have been significantly less attractive. To be honest I think that would be happening to an extent anyway, but certainly many of the tax break business is contributing to establishing economic depth in Ireland in a way extractive industries don’t.

gaius 9y ago

Without tax incentives, our ability to attract foreign direct investment is massively reduced The Irish government hit upon a very clever strategy of collecting subsidies from the EU, spending that money in lieu of tax in its own territory, therefore being able to charge lower corporation tax, luring jobs away from the very economies that were paying those aformentioned subsidies in the first place! Unfortunately the other EU countries have figured out what was happening now.

deleted 9y ago
[deleted]

bad_good_guy 9y ago

Ireland is soon to be the only English-as-first-language European country. I would think that is a large factor.

JustAnotherPat 9y ago

The Irish are free to Exit the EU like their British neighbors. Then you can keep your taxes as low as you want.

radicalbyte 9y ago

Ireland, The Netherlands, Sweden, Finland and Denmark. Those are the countries where you can easily find fluent English speakers within the European Union. With the tax equal anywhere in the EU, Ireland would be clearly the #1 place to locate the jobs for large international companies - particularly American ones.

cornholio 9y ago

You have just described a race to the bottom fueled by a tragedy of the commons. The textbook solution is exactly what has been suggested: coordination among players so that the overall welfare is maximized. Sure, if Ireland chooses to pass on this revenue it should be able to do so, but this should not stop France from taxing a Google that is doing business in France from an Ireland PO Box. The philosophy of the common market predates the global digital market and is no longer adequate.

nitwit005 9y ago

If the only way we can succeed is at the expense of others, maybe you should consider failure.

Supernaut 9y ago

Speaking as another Irish person, I find it disheartening to see a compatriot playing to the prejudices of our critics. The country has vastly more to offer than just tax incentives, and it is not and has never been a tax haven in the sense that Bermuda or the Cayman Islands are. We were attracting significant high-tech FDI as far back as the '70s, from companies like Apple, IBM, DEC, Amdahl and Atari. They set up manufacturing and sales operations here, in an era when the corporate tax rate climbed as high as 50%! As simonh noted in his reply to your comment, "Having those technical and finance jobs in Ireland builds up a reservoir of skilled labour in those areas that attracts companies. I saw this first hand at at a previous employer. We would preferentially move technology roles to Ireland - speak excellent English, in the EU, cheap office space and plenty of technically capable workers." Apple's sweetheart deal with the tax authorities here is an embarrassment, but the lesson has been learnt and we won't see that kind of arrangement occurring again.