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Ireland, Still Addicted To Tax Breaks

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The Irish government decided last week to get rid of a tax loophole that has helped big multinational companies like Apple and Google avoid paying billions in taxes to any government at all. But hold the champagne: Ireland could well replace one problematic tax policy with another, leaving aggressive tax avoidance pretty much intact.

On Oct. 14, Ireland’s finance minister, Michael Noonan, said the country would get rid of the “double Irish” — a provision that allows companies doing business in the country to avoid taxes by making royalty payments to an affiliated firm that is registered in Ireland but has its tax home in another country, often a tax haven like Bermuda that has no corporate income taxes. The provision will disappear for new companies in January, but businesses already using it can continue to do so until 2020.

Still, Ireland, which for years used policies like the double Irish to attract multinational businesses, appears uninterested in true reform. It will create a new provision known as the Knowledge Development Box that will allow technology, pharmaceutical and other companies that make money from patented products and services to pay a discounted tax rate. Officials haven’t said much about what kinds of profits will qualify for the lower rate or what it will be. Experts expect it to be lower than the already low standard corporate tax rate of 12.5 percent.

Ireland is not alone in trying to lure tech companies with very low tax rates. Since last year, Britain has been phasing in what it calls the Patent Box. By 2017, the country will have just a 10 percent tax on profits from “patented inventions and certain other innovations.” That will be less than half its standard corporate tax rate of 22 percent. [more at link]

http://mobile.nytimes.com/2014/10/20/opinion/ireland-still-addicted-to-tax-breaks.html?smid=tw-share&_r=3&referrer

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Why does government think it can thieve by tax anyway?

And don't give me that 'its the price we pay for living in a civil society' rubbish. Basing a society on theft is hardly 'civil'

Ireland should stick two fingers up to the yanks and get rid of all corporate taxes.

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Why does government think it can thieve by tax anyway?

And don't give me that 'its the price we pay for living in a civil society' rubbish. Basing a society on theft is hardly 'civil'

Ireland should stick two fingers up to the yanks and get rid of all corporate taxes.

Maybe we should cut the subsidies to business first? :rolleyes:

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Actually, since corporations are considered individuals nowadays and can donate to [buy] elections, then really in the interests of fairness, shouldn't they be taxed as individuals?... ;)

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There are many countries around the world which have civilised societies, but take far less tax off their populations. The level of taxes does not need to be anywhere near as high as in the UK to operate a civilised society.

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Since businesses are de facto individuals now, tax them on their revenues like individuals. Then everyone's rates can go down.

Or, tax pollution or something else we don't want. Wouldn't most companies support a CO2 tax, which is something they can control the production of, vs. a tax on profits which is what they want more of? Why are we taxing things we want more of and giving free rides to things we want none of?

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Actually, since corporations are considered individuals nowadays and can donate to [buy] elections, then really in the interests of fairness, shouldn't they be taxed as individuals?... ;)

Ideally both should be taxed at 0%.

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Well I see taxes on business profits from production as an important part of achieving maximum social economic efficiency. It is from these profits that social costs of labour will be covered, since heaven knows they are not fully covered by wages.This also applies to capital gains which should also be taxed accordingly, because they arrive indirectly from labour production and of course... labour does not own the output of their production. However, it is from their production that society is sustained. Therefore, corporate taxes allow a certain value of production to be directed back toward sustaining society.

Just my own take, don't expect too much agreement in here :ph34r:

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Well I see taxes on business profits from production as an important part of achieving maximum social economic efficiency. It is from these profits that social costs of labour will be covered, since heaven knows they are not fully covered by wages.This also applies to capital gains which should also be taxed accordingly, because they arrive indirectly from labour production and of course... labour does not own the output of their production. However, it is from their production that society is sustained. Therefore, corporate taxes allow a certain value of production to be directed back toward sustaining society.

Just my own take, don't expect too much agreement in here :ph34r:

Only problem with the high corporate tax argument is that:

- usually the profit margin across same industry is similiar (retail (eg Tesco, ASDA, ...) profit margin is 5%) so any higher taxation just increases the price to the consumers (the citizens)

- if some extra money are taken from the profit margin it will hit mainly the shareholders (the rich). But who is the largest shareholder in the West??? -> the pension funds (the citizens)

- throwing money at lower classes (social care / minimal wage) does not improve their level in the sociaty or their quaility of life; as it just increases the price floors; eg Apple iPhone, designer hand bag or the best Nike shoes will be always expensive for the lower class

- as the West style high taxation social state is a hungry baby the burden of the high taxation (40%/50%) is on the middle class citizens

Thanks God for EU taxation rules and Ireland 10% corporate tax! This is only way forward! US 30% one is a joke. UK 20% one needs some tweaking to go down ...

Edited by Damik

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You can't really tax legal fictions like corporations. Only human beings pay tax ultimately.

In the case of taxes concerning corporations, either the shareholders, the employees, or the customers, will pay tax.

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