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Facebook Finds Grass Greener In Ireland
theodp writes "Facebook announced it has chosen tax-haven Dublin for its international HQ, but not all are buying COO Sheryl Sandberg's line about local world-class talent being the motivation behind the move. The Irish Times recently reported that Irish subsidiaries owned by US multinationals are opting to convert to unlimited liability status, concealing the financial performance of their Irish operations from public view. They include Microsoft's incredibly profitable Irish subsidiaries Round Island One and Flat Island Company, Google Ireland Holdings, and a subsidiary of Apple Computer. The conversions have occurred as US tax authorities have increased their scrutiny of international mechanisms used by American multinationals to reduce their taxes at home."
is a politician's wet dream of byzantine unfairness and vote buying
Because IMO Facebook is just another fad and will go the same way as Friends Reunited when something new and shinier comes along or the novelty wears off. Very few trendy websites stay trendy for more than a few years - its only the interesting ones that survive and theres a limit to how much aquaintances boring lives and silly little games can keep you interested over a long period of time.
It's the Guinness. Just tastes better the closer you are to St. James's Gate.
"FDA staff reviewers expressed concern about the number of patients who were left out of the study because they died."
Ha! As if the US spends its tax money wisely! 900 billion here, 900 billion there, pretty soon you're talking about real money.
I asked my Representative to vote against the failout.
Don't piss off The Angry Economist
The solution to the US going further in the hole every day isn't more taxes, it's to stop pissing away money like $700 billion is pocket change.
Benford's Corollary to Clarke's Law: "Any technology distinguishable from magic is insufficiently advanced."
I think that the tax law changes started way back in the Clinton administration. If I remember correctly that Congress passed legislation to make it very difficult for people to move to lower tax rate jurisdictions and keep their money and at the same time made it easy for corporations to do so. This process of giving more rights and flexibility to corporations than to individuals continued full speed ahead during W. Bush's term.
I don't think that there can be much doubt (especially after this corporate giveaway bailout being voted on today) that most governments (including mine, the USA) have been totally subverted to corporate interests. The question is, I think, given this environment, how can we as individuals thrive most effectively? I have been blogging a lot about this lately, but I won't bore anyone here with links to that :-)
Hey, you guys all but invented "letting the market decide", so if you're not the most attractive country in which to pay tax, surely you'll be redressing that through competition, not regulation?!
"Wise men talk because they have something to say; fools, because they have to say something" - Plato
Corporations seek environments where they can generate the most profit. Get over it. America is quickly becoming a business unfriendly environment. Taxation, absurd regulations (for example, you CAN'T test 100% of your cattle for BSE no matter how much your customers want it, or how competative it will make you), insane legal exposure...
Welcome to the "service economy."
...and they say there are no snakes in Ireland?
Where's St. Patrick when you really need him?
You can't talk about Wikipedia's flaws on Wikipedia
In fairness, the $700 billion may be a cure for the billions that were pissed away before, but it is hard to tell these days.
~ Ron Fitzgerald
You don't have to be a financial expert to know that just ain't right.
A corporation has a duty to its shareholders to increase their equity. If they can save money by relocating, it's entirely appropriate for them to do so.
You might want to ask why the USA has such high corporate tax rates.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Adam Smith was a Scot, not an Irishman.
Don't piss off The Angry Economist
Where does one start researching this information?
Pick up a copy of The Economist magazine, and check the small ads towards the back. Or, just google for "offshore banking".
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Why should corporations want to stay in an environment becoming increasingly hostile? Public perception of many corporations (and certainly "the corporation") is justifiably dismal. The next president will no doubt raise business taxes. Doesn't it make sense to move to somewhere like Ireland? People make this same kind of decision all the time when deciding where to live.
One of the interesting things in these discussions is that so many people betray how utterly insular they are. The economy is global and it's easier than ever to move around the world and communicate around the world. The difference between Ireland and the US (or the US and China, India, Slovakia, Russia, etc ad infinitum) ain't what it was 50 years ago. American exceptionalism is commonly laughed at as something for fools and demagogues, yet everyone who rants about how corporations should be taxed higher and how corporations shouldn't be allowed to go overseas are betraying their own beliefs.
Sorry, thats what you get from a mind polluted by LOLCATS.
In Gregory v. Helvering Supreme Court Justice Learned Hand was quoted as saying:
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
Gregory v. Helvering, 293 U.S. 465 (1935).
The fact is tax avoidance is a key part of keeping taxation in check. If it gets oppressive, you move. In this way, governments compete for taxpayers.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
Don't you know, it's important for the economy to pass it as quickly as possible. Not because the economy would stop, but because a 2 day delay meant 400+ pages of unrelated pork and complications to the tax code.
Do you even lift?
These aren't the 'roids you're looking for.
All I'm seeing is the "unpatriotic" banner being waved by the left in America, when they AREN'T asking, "Why are companies leaving America, and why do they have hard-to-touch bank accounts offshore?" Somewhere there's a BAD disconnect - that we could minimize what many banks are going through by doing something that would ENCOURAGE people keeping their money there rather than seeing large companies as something to tax and take from because they somehow "owe" it.
The left NEVER asks what is wrong with their system - they just ask what is wrong with everyone else. We need to ask, "what would it take for you to keep your money in America," rather than proclaiming from the rooftops that they're leaving and should be punished for it.
The middle-class need tax relief. So let's tax the big companies they all work for much more heavily.
This will surely help the middle-class employees of these large greedy companies. In order to remain competitive in this global economy these large companies must move out of the USA because the taxes are so burdensome here.
Thanks Obama! That really helped a lot!
Sorry, but I need to correct you.
This round of change problems came around with Nixon, not with Clinton. Similar sounding name, but diff. When corporations began to be unaccountable and stop having to report things, a number of almost immediate changes took place. Not over months, but days. Noerr Pennington doctrine in 1972 is where they decided "it's legal to use money to influence political power". It's where "felony interference of a business model" came around. After that Reagan, Bush Sr, they all kept it going even worse.
So, Ireland is smarter than us in how they go about attracting corporate dollars... ... and you fault THEM for it?
Maybe if we were a little more competitive companies wouldn't bother fleeing there. Just a thought.
Some of you may remember the Presidential debate only 6 days ago. As soon as I saw this story, I recalled McCain's argument for lowering business taxes. He used a very specific example...Ireland.
You can see the video here with the Ireland remark highlighted.
I took the liberty of transcribing McCain's words. Not to go totally partisan up in here....but you gotta give him props for calling this one:
The business tax. Right now, United States of America business pays the second highest business taxes in the world, 35%. Ireland pays 11%. Now, if you're a business person, and you can locate any place in the world, then obviously if you go to the country where it's 11% tax versus 35, you'll be able to create jobs, increase your business, make more investment, etc. I want to cut that business tax. I want to cut it so that businesses remain in America and create jobs.
No, let's not tax them any more. Let's instead give tax breaks to companies that don't outsource American jobs, thereby encouraging them to stay here.
In case you haven't pulled your head out of your ass long enough to notice, Obama isn't president yet. How does Obama's future economic policy explain why companies are relocating over the past several years? Answer: It doesn't, it's the Bush failed economic policies of deregulation that are encouraging companies to dodge taxes overseas.
"When the president does it, that means it's not illegal." - Richard M. Nixon
Ireland is not smarter. We are just desperate.
You must understand that Ireland, as a country, had nothing. The most common phrase I hear from older people about the past is: "This country had nothing". The sad fact is, beneath it all, Ireland still has nothing. We have no natural resources, a low population, poor infrastructure, no significant industrial base. We are an island, and communications with the continent have always been expensive, slow and prone to monopolies. Corruption is and always was a very serious problem. We have a weak judiciary, a rather inept legislature and an effective one-party system. None of these points is a crippling issue, but you must understand that Ireland was never traditionally an attractive place to invest.
The low corporation tax rate is the only, and I mean the only , thing that this country has to attract foreign investment. No one is very happy with this, least of all ordinary people who have to pay ~45% income tax rates to make up for the attractive 12.5% taxes paid by corporations and yet still have to put up with a substandard public service. Ireland is a leader in the race to the bottom, and it cannot be denied that this policy has paid off. Big fish like Microsoft, Pfizer, Dell, Intel, etc have contributed substantially to Ireland's transition from a second world country in 1990, to a ... well talk to me after the current crisis is over, but I'll say for now a first world one.
The low corporation tax had lead to some substantial anomalies. Former Taoiseach Garret Fitzgerald has argued for years that Ireland's official GDP figures are grossly misleading, with a very small amount of foreign companies contributing a sizeable fraction of GDP(If I remember correctly, Pfizer's Viagra operation in Cork alone was said to account for 3% of GDP). But because the tax rate is so low, these profits will largely be sent back to their home countries, and the country will not see the benefit(as much).
Make no mistake, Ireland has made a Faustian deal with multinational companies. If even one, just one, major american company decides to pack up and head elsewhere, this country will feel the impact for many years. The company might consider its presence relatively small in global terms, but in Irish terms Microsoft's Dublin office is akin to Ma Bell in its heyday. At this point, we literally cannot afford to ever increase the corporation tax rate to anywhere near the rate in England or the continent. If we do, one or more multinational companies will leave, and the country will go under.
Many of these same reasons lay behind the bail out of Irish banks this week by the government. Our banks are small in global terms, but if they go down, we go down with them. (And they were going down. Ireland's housing crisis is exactly the same as in the US only even more extreme). Before you mention it, I will say that yes, this country as a whole has been mismanaged. For many years. I and most people living here are chronically aware of this fact.
Ireland has changed substantially in the last ~15 years. But I must stress that our great national fear has never gone away. That fear is that the country will become utterly bankrupt, and everyone in it will be reduced to abject poverty. "This country was a disaster." I've been told this over and over ad nauseum since I was old enough to speak. Even the cubs of the Celtic Tiger, for all their confidence, are dimly aware of this fact. Despite all the mobile phones and iPods, green beer, SUV's, wine counters, foreign holidays, etc, etc, Irish people collectively have not and will never let go of this one, real and ever present terror that they will be, as a nation, pauperised. Again. It has happened over and over and over. In the 1930's, the 1950's and the 1980's, and that's just in the modern era.
Ireland still, to this day, has very little going for it, and people here will do everything they can to avoid going back to nothing. As such, I seriously doubt that they
May the Maths Be with you!