Ireland and Corporate Taxes

While I was over in Italy there was quite a bit of coverage of the EU referendum in Ireland. On the flight back I read an interesting article in the Financial Times. Ireland had not yet voted on the measure at the time of the article and they subsequently voted No. There was a tremendous amount of campaigning and advertising around both the Yes and No sides. But what I found particularly interesting about the situation is that it was actually the left-wing (unions, etc.) that were pushing for the No vote. And one of the primary reasons they were pushing the No vote was because they claimed that Ireland must lose control of their ability to continue to have low corporate taxes.

Unions pushing for lower corporate taxes! Amazing, right? Ireland has corporate taxes hovering around 12.5% and their economy has benefited significantly as a result. Here's a quick excerpt from the article:

Ireland's corporate tax take was €6.4bn last year, representing a little less than half total tax revenues. Only Luxembourg of the EU 27 depends more on corporate taxes.

In Germany the contribution is about 5 per cent of total tax take, in France 6 per cent and in the UK 9 per cent.

Ireland, with it's 12.5%, pulls in half of it's tax revenue from corporations! Now, the No campaign was primarily just playing on people's fears regarding the actually referendum. There are several EU nations with rates as low or even lower than Ireland. But as an American, that's not what I picked up on. Looking back at one of my posts from a year ago - The Wrong Side of the Laffer Curve - you can see how far off the United States is compared to Ireland. It definitely seems like we're missing an opportunity here. Even Obama is considering lowering corporate tax rates.

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