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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.'"
Kind'a...
If you do not contribute to the economy of your host country one of the results is that it will have a low living standard, housing in disarray, unemployment through the roof. This will automatically put a number of limitations on what kind of people you can hire. To be more specific - you can hire only wageslaves with non-working dependants.
While that may be OK if your aim is to import labour from Talebanic countries where the wife is a houseslave, it does not work well in the civilised world. If it did, Google would not have had to post 200+ positions on a weekly basis for Dublin and consistently _FAIL_ to fill them. The situation with a lot of other emloyers in Ireland is not much different. They all continue to have a long list of positions for qualified labour open.
That is to expected, because foreign labour does not want to move into the middle of a dump (and Ireland in the economic sense is a dump) and the Irish educational system does not have enough money (taxes are actually used for something ya know) to produce an equivalent.
So overall, Google should stop wingeing here and realise that by moving a high skilled labour activity into a low tax rate country it has shot itself in the foot in the long term. High skilled labour, Low Taxes and Growth - you have to pick two. All three together are mutually exclusive.
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Perhaps you're not looking at the question properly. Please, change your perspective. slightly, then take another look. Let's ask the question, like this: "If having all those corporations in the country tax-free is so good, then WHY is Ireland going bankrupt?" I'll be honest - I am no economist. I don't understand all the tax schedules, or who gets tax breaks, or why, or how. What I DO KNOW for certain is, the corporations are parasitic entities, with only their own welfare in mind. If the corporations were symbiotic, instead of parasitic, they would be examining how taxes benefit the host nation, and negotiating over those taxes. You know, give and take, compromise, stuff like that. Instead, we see here that the parasites are ready to find a new host if this one goes belly up.
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Not in the Irish case. Companies "in Ireland for tax reasons" don't necessarily employ many people there. They just have to allocate certain revenues to an Irish subsidiary for tax purposes, and then re-"export" these same on-paper revenues to tax havens like Bermuda.
What I don't understand is why this is legal outside of Ireland (i.e. in those countries which are losing money because of it).
Don't get me wrong - if countries want to compete on income tax to attract businesses, I'm all for it. It's up to the citizens of a democratic state to decide how they want to run things in it, and that includes tax rates. And Google, Intel, Microsoft etc are quite welcome to enjoy the benefits of those low taxes - by moving their actual production facilities to those places.
But why the hell do they get to pay low taxes in Ireland off products that are actually made - and often sold! - on US soil? Their businesses enjoy all benefits of that society, but then skirt their obligation. Why is this legal?