Ireland, Hungary and Estonia all opt out of OECD agreement on corporate tax

[Zinneke]

A punch in the gut for EU unity.


https://www.euronews.com/2021/07/02/ireland-hungary-and-estonia-opt-out-of-oecd-tax-deal-and-cast-shadow-over-eu-s-unified-pos


Noteworthy is that the Netherlands did not opt out, but Rutte is definitely the problem according to some. This is will just trigger the race to the bottom we have all feared, and gutting of public services as a collateral.

[parochial boy]

You'll notice that I have also regularly singled out the Irish in the past too. The fact that they are even more trollishly unscrupulous while Rutte or the Swiss did the half decent thing and signed up still doesn't excuse the regimes that those two countries put in place. Or Rutte's attitudes towards shared debt and deficit spending.

It's just that the Irish are more charismatic, so everone always gives them a pass on these sorts of things.

[Cassius]

Spare a thought for poor old Ireland. Take away tax avoidance and they’ll hardly have an economy left.

More seriously, this is why the rationalisation of ‘countries wishing to strengthen their revenues’ doesn’t work. Ireland et al running these low corporate tax regimes is what has (in part) powered the recovery of their tax revenues in the years since the financial crisis. Of course, it won’t be good for them if they are subject to some form of sanction (although what that would be I don’t know), but it isn’t in their interest to shift to a higher tax regime. This is where the reality of taxation being a zero sum game played for national interests come into play; what is good for Ireland is bad for the United States, and vice versa, and there’s no getting around that.

[It's Perro Sanxe wot won it]

I’m sure the EU will be as harsh with these beacons of selfishness as it is with countries that don’t comply with deficit rules…

[Former President tack50]

Spare a thought for poor old Ireland. Take away tax avoidance and they’ll hardly have an economy left.

More seriously, this is why the rationalisation of ‘countries wishing to strengthen their revenues’ doesn’t work. Ireland et al running these low corporate tax regimes is what has (in part) powered the recovery of their tax revenues in the years since the financial crisis. Of course, it won’t be good for them if they are subject to some form of sanction (although what that would be I don’t know), but it isn’t in their interest to shift to a higher tax regime. This is where the reality of taxation being a zero sum game played for national interests come into play; what is good for Ireland is bad for the United States, and vice versa, and there’s no getting around that.

The main issue here is that that line of thought incentivices a "race to the bottom" for the lowest tax rates possible, at the cost of everything else

[CumbrianLefty]

Ireland often get a free pass from the "plucky upstart standing up to British bullying" image. But even so Varadkar is one of the most fervent neoliberals still out there, with all that entails.

[Zinneke]

Spare a thought for poor old Ireland. Take away tax avoidance and they’ll hardly have an economy left.

More seriously, this is why the rationalisation of ‘countries wishing to strengthen their revenues’ doesn’t work. Ireland et al running these low corporate tax regimes is what has (in part) powered the recovery of their tax revenues in the years since the financial crisis. Of course, it won’t be good for them if they are subject to some form of sanction (although what that would be I don’t know), but it isn’t in their interest to shift to a higher tax regime. This is where the reality of taxation being a zero sum game played for national interests come into play; what is good for Ireland is bad for the United States, and vice versa, and there’s no getting around that.

The sanction will be France and Germany being less lenient on NI.

[Indy Texas]

Spare a thought for poor old Ireland. Take away tax avoidance and they’ll hardly have an economy left.

More seriously, this is why the rationalisation of ‘countries wishing to strengthen their revenues’ doesn’t work. Ireland et al running these low corporate tax regimes is what has (in part) powered the recovery of their tax revenues in the years since the financial crisis. Of course, it won’t be good for them if they are subject to some form of sanction (although what that would be I don’t know), but it isn’t in their interest to shift to a higher tax regime. This is where the reality of taxation being a zero sum game played for national interests come into play; what is good for Ireland is bad for the United States, and vice versa, and there’s no getting around that.

Ireland has plenty of capable, college-educated people and is a member of a massive single market via the EU.

Can they not find something productive to do with themselves besides operating what amount to glorified post office boxes for American technology and pharmaceutical companies?

[mileslunn]

I fully support deal as a Canadian and would if American.  At same time if Estonian, Irish, or Hungarian I would oppose it.  Reality is this: Low corporate taxes create race to bottom making it harder to fund programs people want or require shifting more tax burden onto low and middle income earners.  Ireland may have super low corporate taxes, but income are very high.  Marginal rate (income + USC + PRSI) is 48.5% on income over 35K which hits many middle class while top rate is 52% (55% if self-employed) and while a few other European countries go above that, most at much higher levels.  California has similar top rates to Ireland, but have to make a $1 million US before hit while in Ireland only 70,000 Euros so hits not just very rich but many upper middle class too. 

At same time small countries like Ireland wouldn't have much of an economy without low corporate tax rates.  It is precisely because of low corporate tax rates many companies like Google, Amazon, and Facebook have European headquarters in Ireland.  Estonia and Hungary not sure have benefitted much so far but maybe hoping to.  Although both have much lower wages than most of Western Europe so I would think lots of potential in manufacturing.  Never mind with more working from home, I would think both Estonia and Hungary could be attractive to high income earners who can work remotely as they have flat rates of 20% and 15% respectively whereas in Western Europe top rates range from mid 40s to low 50s.  Ireland off course falls in that range so corporate only thing going.  One thing that may help Ireland which wouldn't have when the 12.5% corporate rate was introduced is Ireland is now the only English speaking EU member thanks to Brexit so they could use that to their advantage.  As English is international business and most would rather be inside the EU than outside.

[beesley]

There ought to be some sort of clause in the agreement where if developed countries are doing this, then through protectionist measures or whatever, action is taken against them. These countries need to be run into the ground - morally they are a safe haven for fugitives (not legally).