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Google Warns Irish Government Against Tax Increase
theodp writes "The Irish government has been given a stark warning from some of the biggest American companies in Ireland on the risk of a mass exodus if the country's controversial low corporate tax rate is raised in return for an IMF/EU bailout to shore up the country's beleaguered banking system. According to The Telegraph, a statement signed by senior execs at Microsoft, HP, Bank of America, Merrill Lynch, and Intel points out that although Ireland's tax rate may be low in European terms, it is not when compared with locations such as Singapore, India and China. Separately, the head of Google's 2,000-strong European HQ in Dublin told the Belfast Telegraph, 'anything that impinges on Ireland's competitiveness is going to be a big thing for Google,' adding, 'anything that increases the cost-base of a business is negative for competitiveness.'"
God forbid any company would actually contribute taxes to the infrastructure of the countries in which they operate. I mean, that would just make too much sense.
Give a man a fire and he'll be warm for a day. But light a man on fire and he'll be warm for the rest of his life.
I can't begin to count how many times over the past few years I heard that we needed to emulate the "Celtic Tiger."
If they're actually that big and that well entrenched in Ireland, they won't just pick up their ball and go home that easily
And if they're not, then who gives a fuck if they leave?
If only raising taxes in the United States were enough to get rid of J.P. Morgan Chase, Bank of America and Merrill Lynch. Ireland should jump at the chance to jettison these systemically dangerous financial institutions and replace them with sound banks of their own.
A corporation serves only its self interest - it cares not about the local area(s) it operates in as long as it can get some sort of special tax treatment etc. They want full use of roadways - airports - water -etc by paying nothing or as little as possible. Yes they hire locals who have to make up the "sweetened tax deals" out of their own earnings.
I say let them move all their crap to crappy nations and see how that works out for them.
Its not the years, its the mileage
Google is using the standard "report income where tax is lowest" strategy in EU. Google has subsidiaries in multiple countries, and they can avoid paying more taxes by moving their income around as internal expenses.
Subsidiaries appear to be barely breaking even, and mothercompany reports higher profit.
There are no atheists when recovering from tape backup.
The difference is, largely, that corporations can have their cake, and eat it too. International law is set up so as to, for example, allow primarily U.S. companies like Google and Microsoft to incorporate in countries with much looser strictures on corporations, while still operating freely in the U.S.
Enjoy state ownership/competition in China and gross incompetence in India that will cost you more in sales and long-term brand recognition than you'd ever pay in actualized taxes.
Now Singapore is a relatively new and untested place for offshoring, which is a risk in itself.
It's also worth noting, of course, that none of these places are in Europe, which was the whole point of opening offices in Ireland to begin with. All these companies already have a presence in Asia, so basically they are threatening to do something that they already did, and they want people to believe that they'll give up their regional presence in Europe in order to effectively gain nothing.
It's a poor bluff.
When a private corporation attempts to dictate to a sovereign state which policies the state should adopt, there is something terribly wrong with the world.
Everyone knows why they are in Ireland to begin with. If they raise the rate just a little at a time, they will not feel the need to leave. Companies like that almost never follow through on threats like that just because they said they would. All they have to do is raise the rates just enough that they won't leave and also get enough of an increase to make a difference for Ireland.
I tend to agree that it's different this time, but not necessarily for the same reasons Zakaria is pointing to. (Didn't read the Time article, just what the parent was quoting.)
Labour is less mobile than capital and technology, but that's not the problem. Labour's basic problem is that it's value is decreasing globally. You can't found a business on labour any more, because you can't produce stuff that people want for long. Our economy has become so productive and skill-based that labour can't keep up. Any skill that labour has will become redundant in a decade or so. This is a big problem, and as society and economy we really don't have any tools to cope with this.
Another development that disadvantages labour is that people, especially young people, tend to value things that are post-scarcity. They don't want big house that they can fill with designer furniture, they want an address with a broadband connection that they can fill with music, comedy and games.
Developing world labour has a competitive advantage right now, but that won't last for more than decade or two. They will caught in the same bind.
I think we need seriously start to think how to bring about sustainable labour.
Computers are useless. They can only give you answers - Pablo Picasso