Here’s one foreigner not whooping it up over the Democrats victory:
Smart Irish policymakers – several key civil servants, a few farsighted elected pols like Mary Harney, Charlie McCreevy, Bertie and Brian Cowen, and an unofficial cadre of advisers from the private sector acting for the good of the country – realised in the late 90s that for a small open island economy to prosper it would need something more than cheap wages, Guinness and the craic.So they focused on persuading big technology and pharmaceutical companies to move their intellectual property here. In 1998, the Irish corporate tax rate was slashed from 32% to 12.5%, still among the five lowest in the world. The US federal corporate tax rate is 35%.
In 2004, Ireland simply eliminated the 9% tax on the sale or transfer of intellectual property and launched an R&D tax credit. Microsoft was among the first takers. In 2005 the Wall Street Journal revealed that a little company called Round Island One had become Ireland’s biggest taxpayer. Round Island One is a brass-plate office set up in 2001 – a subsidiary of Microsoft. It booked profits of more than $9Billion in 2004. It paid $300million in taxes to the Irish exchequer.
What happens when Charlie Rangle and company have their way and make sure “American” firms pay taxes to America? Maybe not so good for my ancestral sod.
Hat tip to Eamonn Fitzgerald
