Leaning on little Ireland

Any truth in the FoI inspired report that the US and UK are leaning on Ireland to tighten up the 12.5% corporation tax regime? Pity, if it hit NI hopes of winning a slice of Tiger action at last. The UK has long been fearful of a mass exodus of multinationals to Ireland. Two more big ones went west last week. It was the last straw after they heard that our tough talkin’ Chancellor will after all refuse to abandon ideas for a tax on multinationals’ profits earned overseas. Pressure to scrap the plans had been increasing long before it was clear ( to Alistair Darling anyway) that the financial crisis was so severe.The best option would be another corporation tax cut from 28%. But O Lord not yet. We have to get revenue from somewhere.

  • Greenflag

    BW ,

    ‘Two more big ones went west last week.’

    So it ‘Brits In ‘ as opposed to ‘Brits Out ‘? or is it a case of going west before they really go west in the final i.e financial sense ? Who said money does not make the world go around or east or west for that matter.

    ‘We have to get revenue from somewhere.’

    Ah yes the bottom line as always -now lets see where we can find a few bob – from the working class -naw they’ll not vote for us 🙁 , from the middle class – better not with home equity values in decline 🙁

    Tax increase on petrol ? A kamikaze strategy right now – Cut defence spending -not with the Russian Bear on the prowl and Afghanistan in turmoil ? Not practical

    What’s left ? Reducing Queenie’s stipend and our last bit of pomp and circumstance ? Inconceivable .

    There must be something . There has to be !

    What was that Alastair? Darling, -Northern Ireland and 6 billion in potential savings ? Eh ?. Get me those ungrateful feckers on the phone right now !.

    Yessiree -it’s not easy being green and even less easy being brown .

  • New Yorker

    The problem for US and UK treasury tax collectors is that the low corporate tax rate is not exclusive to Ireland. There are countries with near zero corporate tax rates. US and UK treasury officials should recognize the reality that some corporations will relocate to lower tax countries. And, it is better for many reasons that corporations relocate to a stable and friendly country like the ROI rather than some ‘cut-rate’ countries in Central America or the Middle East.

    The US Treasury and the so-called “double taxation” arrangement is an important matter and US Treasury should stay away from it and not upset international agreements in this difficult economic climate with a new administration four months away.

    Overall the US and UK governments must realize that in a global world they will have to be competitive on corporate tax rates or face a constant but inevitable relocation of corporations out of their high corporate tax rate countries. Corporations answer to stockholders and the surest way to improve the bottom line is to trim tax expense.

  • we wont put up with this kind if interference from foreign empires.We will drive them from our shores.

    By the way if you are wealthy multinationals you could not be more welcome here.We will bend over backwards,sumersault or whatever your hearts desire really!

  • Greenflag

    New Yorker

    ‘ US and UK treasury officials should recognize the reality that some corporations will relocate to lower tax countries.’

    The ‘officials ‘ do not have to face election to hold onto their jobs. Gordon Brown does . Barack Obama has been heard to make noises re finding new ways to ‘tax’ those large corporations who send American jobs overseas and thereby reduce their ‘tax’ obligation at home – thus forcing the US Government to emisserate it’s middle class through all kinds of underhand measures from understating the price inflation statistics to keeping the minimum wage barely at subsistance level . It’s now requires 97 hours of work at the minimum wage level for somebody to be able to afford and apartment and a ‘survival’ standard of living . At some point this ’emisseration ‘ strategy will lead to ‘blood’ on the streets of the USA . The fact that 3,000,000 people are behind bars in all of the newly built prisons has probably helped keep the lid on ‘revolt’.

    There is a worldwide disconnect between need for large multinational corporations to make a profit yes even obscene profits and the need for western developed countries to protect their democracies .

    Given modern internet technology and global free trade it is technically possible for large corporations to thumb their noses at the governments of their home base countries /states by locating their HQ’s in Central America .

    While a small Government like Ireland can afford to have a 12.5 % tax rate, the USA /UK and other larger countries have large defence expenditures and worldwide ‘strategic ‘ responsibilities cannot .

    The people elect their Governments to rule their State in a manner which protects and enhances their democracies. The people do not elect large multi national corporations .

    At some point there will have to be concerted international government cooperation on tax rates and on how to tax overseas investments . Otherwise multinational corporations will effectively ‘rule’ democratic countries not directly but through indirect ‘financial ‘ pressure through reducing national tax bases and through the emisseration of the middle and working classes of the developed countries .

    ‘Corporations answer to stockholders and the surest way to improve the bottom line is to trim tax expense.’

    True -it certainly is much easier than having to improve worker productivity which is difficult when the many Americans have’nt had a real wage increase in a decade . The CEO’s of America’s large corporations now earn 430 times the annual salary of the average American whereas 40 years ago they earned only 40 times the average .

    The ‘bottom line’ of the above trend will result in a tiny minority of extremely wealthy Americans having to live behind security gates and sending their children to school under police or security guard escort for their safety .

    This upcoming election will indicate whether the USA is going to move decisively against the anti social and stupidly selfish politics of trickle down economics or carry on it’s present path to political and economic self destruction .

  • New Yorker

    Greenflag

    Treasury officials’ jobs depend on elected governments. In the US, maybe less in the UK, when a new administration takes over, there is usually a house cleaning in at least the top tier of Treasury bureaucrats. If Obama wins, as I think he will, those officials who do not address this issue with new thinking rather than short-sighted measures, will be out of their jobs.

    As to international government cooperation on the matter, I hope so but see no movement on that in the near future. Meanwhile the inevitable headquarters relocations continue. Has it been announced yet that Martin Sorrell might relocate WPP, one of the largest advertising and marketing conglomerates out of the UK?

    Globalization implicitly means post-nationalism no matter what people say, increasingly we live in a post-nationalist way. As you point out, the solution for corporate relocations and taxes is really supra national.

  • Greenflag

    New Yorker ,

    Agree with your post above . Perhaps it is time for a World Government which would rule on access to oil and water supplies and would guide nations in their ‘demographic ‘ and immigration policies .

    I don’t believe the world has time to wait for and hope that the global ‘market’ alone will solve the problems of overpopulation , ever scarcer natural resources and mass immigration across cultural boundaries and states .

    New thinking is urgently needed at a supra national level perhaps through regional associations like the EU/NAFTA etc .

  • In the US, maybe less in the UK, when a new administration takes over, there is usually a house cleaning in at least the top tier of Treasury bureaucrats.

    Not at all in the UK.

    Perhaps it is time for a World Government which would rule on access to oil and water supplies and would guide nations in their ‘demographic ‘ and immigration policies .

    Sounds creepy and authoritarian to me. I don’t want a UN bureaucrat to tell me how many children I can have, whether I can or must export our ample water supply to parched South Eastern England, or whether or not an Iraqi or Pole can be my neighbour.

    Nor do I want matters of vital interest cooked up by governments behind closed doors without any accountability, at least not any more than we do at the moment.

    Nor do I have any confidence in a George Monbiot style elective democracy that would have to encompass bought votes in India, vote stealing in Zimbabwe, elections where candidates the Mullahs don’t like get nixed from the ballot paper in Iran, elections where candidate Putin doesn’t like get banned from TV or arrested in Russia and no elections at all in China.

    Nice theory. Maybe in 100 years. Meanwhile, there’s plenty of work to be done to make the EU genuinely democratic…

  • Greenflag

    ‘Maybe in 100 years. ‘

    Maybe we (7 Billion and counting ) don’t have 100 years . Oil supplies will run out within the next 20 or become so expensive that only the rich or well armed will have any .

    ‘Sounds creepy and authoritarian to me.’

    Does’nt have to be. China has unilaterally set itself a population target in line with it’s resource base and it’s capacity to feed itself . Without food imports Britain can only support some 27 million people . Don’t know the figure for Ireland but it’s probably one third the British figure given agricultural land areas .

    ‘there’s plenty of work to be done to make the EU genuinely democratic’

    Indeed -but not just the EU . We might want to consider making our ‘nation ‘states genuinely democratic also .

  • Dave

    If the food runs out, we can always eat the Europhiles.

  • frustrated democrat

    GF

    ‘Oil supplies will run out within the next 20’

    Do you have any evidence for this assertion?

    I have seen figures from 60 – 240 years depending on the fall in consumption due to the reduction in the carbon footprint.

  • Maybe we (7 Billion and counting ) don’t have 100 years .

    Based on what evidence? In almost every country, fertility rates are falling precipitously. Work population is probably going to peak at 9 billion in about 40 years. I don’t see any evidence that we can’t feed 9 billion people.

    Oil supplies will run out within the next 20 or become so expensive that only the rich or well armed will have any .

    No they aren’t. Only a small number of doomers, representing a minority of ‘peak oil’ supporters, itself an unproven theory, expect an oil crash so soon.

    Does’nt have to be. China has unilaterally set itself a population target in line with it’s resource base and it’s capacity to feed itself .

    That’s right, China’s population policies are not creepy and authoritarian at all…

    Indeed -but not just the EU . We might want to consider making our ‘nation ‘states genuinely democratic also .

    I take the point, but vastly more so than multi-national institutions.

  • Greenflag

    When exactly we run out of oil is not the question. That could be another 50 to 100 years from now dependent mainly on the expected increase in consumption among the 60% of the World that lives in Asia . The crisis begins when oil production PEAKS and nations start bidding up the price of oil. From 28 dollars a barrel to 147 dollars a barrel 2000 to 2007 is an indication that we can expect more of the same ‘fluctuations’ . Several prominent geologists say the peak has already occurred. Try reading http://www.oilcrash.com or http://www.dieoff.org for information on this topic.

  • Greenflag

    ‘In almost every country, fertility rates are falling precipitously.’

    Precipitously? only in the developed countries , and Japan and of course in China due to their one child policy. In the rest of the LDC’s while the dfertility rate has decreased life expectancy has increased with the exception of Africa where the Aids epidemic is having the most impact on population forecasts . Even in Sub Saharan Africa population is growing and by 2050 will be 8% less than what it would have been without the Aids effect.

    I’ve read various population projections from the UN and others and they range from 9 million (low projection to 15 billion to 20 billion ) .

    ‘Only a small number of doomers, representing a minority of ‘peak oil’ supporters, itself an unproven theory, expect an oil crash so soon.’

    I don’t know what you mean by an oil crash but long before the last ‘barrel’ is pumped out of the ground the oil energy ‘game ‘ will be up unless of course a practical replacement can be found , developed and brought into mass consumer use .

    ‘China’s population policies are not creepy and authoritarian at all’

    Right -they stem from the fact that some 30 million Chinese died of starvation in the late 1960’s when the population had reached circa 700 million . At that time Chinese agriculture was producing just enough food to stave of mass famine at that level of food production. The ‘introduction’ of new green technology (by the West )enabled the population to expand to 900 billion and then over 1 billion to now 1.3 billion . The Chinese may relax their one child policy as the population stabilises and begins to decrease . From a western perspective the Chinese population policy may seem ‘inhuman ‘ and authoritiarian . From their perspective it’s a practical ‘solution’ to an age old problem in their history when ‘famines’ were always the precursors to revolution , dynasty change etc

  • From 28 dollars a barrel to 147 dollars a barrel 2000 to 2007 is an indication that we can expect more of the same ‘fluctuations’ .

    While increased demand, particularly from Asia, has doubtless played a part in that rise in price. You are ignoring the role played by a: the invasion of Iraq; b. political instability in other oil producing and pipeline carrying regions, and especially c.; rampant asset price speculation particularly as both property and gold took a tumble. No honest observer can do this.

    Try reading http://www.oilcrash.com or http://www.dieoff.org for information on this topic.

    I’ve been reading the paranoid ranting on dieoff.org for many years, and really would appreciate it if you pointed me to a website that consisted of more than rather juvenile howling at the moon. ‘I referred to the Olduvai Gorge because it has a mournful sound’. Yeah, right.

    As for oilcrash.com, Robert Atack has been promising the same dire consequences in the next 1-2 years since, to my memory, at least 2004. It’s still a better record than the hapless Paul Ehrlich, but Atack is catching up quickly. The Doomer claims a bit like those weird religious cults who claim Jesus is about to return on Tuesday week, then show no shame when he doesn’t. That hardly being the only similarity extreme environmentalism shares with fundamentalist revision.

    Basically, a group of ultra capitalist hedge-fund managers, who hate greens and all their works, gave the doomers a couple of years of good propaganda while getting both rich and screwing poor people by driving the price of oil through the roof! It’s classic.

    Precipitously? only in the developed countries , and Japan and of course in China due to their one child policy.

    Complete and utter nonsense! (By the way, you do realise Japan is a developed country?) Here are some low-to-medium development countries where the fertility rate is already below replacement: Armenia (precipitously low), Georgia (precipitously low), Macedonia, Cuba, Thailand, Barbados (all the aforementioned less fertile than the UK), Iran (yes, you heard me right), British Virgin Islands, Seychelles, Trinidad, Tunisia (yes, more Muslims not fulfilling the Melanie Phillips/Mark Steyn demographic hysteria stereotype), Puerto Rico, China (Chinese have more babies than the Iranians despite the one child policy), St. Vincent, Algeria (Algerians have less babies than the French), Mauritius, Vietnam, Brazil (a demographic giant), Turkey, Lebanon, Kazakhstan, Burma, Uruguay, Brunei, Chile, North Korea, Suriname, Sri Lanka, Albania, Guyana, Azerbaijan, Argentina. Additionally, every developed country Europe and Asia is well below replacement fertility. Also, the US and Dominica are right at the long-term zero population growth rate.

    We also need to consider how fertility rates in third-wold demographic titans like Indonesia (TFR 2.34), Mexico (2.37) and India (2.76) is falling fast, consistently much faster than even the low-end UN projections.

    Yup, Africa’s a problem; so what else is new? Africans living in anything but the most abject poverty don’t have lots of babies – South Africa’s fertility rate is almost exactly at replacement level (2.11). The answer to Africa’s population problem is better schools, better infant healthcare, reliable access to pension provision and economic growth. This is not news.

    I’ve read various population projections from the UN and others and they range from 9 million (low projection to 15 billion to 20 billion ) .

    You’d better be aware that even the low-end projection has overstated population growth for the past two decades…

    Right -they stem from the fact that some 30 million Chinese died of starvation in the late 1960’s when the population had reached circa 700 million . At that time Chinese agriculture was producing just enough food to stave of mass famine at that level of food production.

    Wrong. You are thinking of the Great Chinese Famine of 1958-1961 and had absolutely nothing to do with the level of Chinese agricultural development. It had everything to do with the policies of Chairman Mao, including disastrous forced collectivisation, farmers being compelled to work in bizarre backyard steeel furnaces which they little understood, implementation of Trofim Lysenko’s wacky agricultural theories, forcing farmers to leap around banging pots and pans to scare sparrows to death while harvests went uncollected, etc.

    The Great Chinese Famine is a monument to the elevation of ideology over common sense. A similar worship of ideology at the expense of common sense is why I am, frankly, frightened of elements of the modern environmental movement.

  • kensei

    Sammy

    While increased demand, particularly from Asia, has doubtless played a part in that rise in price. You are ignoring the role played by a: the invasion of Iraq; b. political instability in other oil producing and pipeline carrying regions, and especially c.; rampant asset price speculation particularly as both property and gold took a tumble. No honest observer can do this.

    The last assertion is certainly of debate to honest observers, or economists at least:

    http://krugman.blogs.nytimes.com/2008/05/13/more-on-oil-and-speculation/

    There’s plenty on both sides of that debate, if you google it.

  • Ken,

    interesting article, but liberal economist though I may be, I don’t assume that markets are absolutely transparent, absolutely efficient or that actors in markets are absolutely rational. I accept that Paul Krugman has a bit more standing in the world of economics than I do, but I think he both underestimates the elasticity of demand for oil – look at the way the average motorway driving speed in Britain has fallen over the past year – and he overestimates the markets ability to price raw crude accurately.

    Thanks for the link.

  • Greenflag

    ‘You are thinking of the Great Chinese Famine of 1958-1961 and had absolutely nothing to do with the level of Chinese agricultural development. It had everything to do with the policies of Chairman Mao’

    I was’nt. I was referring to the 1969 famine which resulted in approx 20 million dead . This was the Famine which ‘persuaded ‘ China to buy in western ‘green revolution technology’ which vastly improved yields and which enabled China to escape from the malthusian trap in which it found itself in the 1950,s and 60’s. President Nixon’s offer of food aid at that time was rejected by Chairman Mao.

    The Great Leap forward induced famine 1958-1961 resulted in an estimated 38 million deaths . Given the nature of the Chinese regime at that time the figures for both famines are estimates from outside observers. .

    ‘The Great Chinese Famine is a monument to the elevation of ideology over common sense.’

    There have been several such monuments throughout the communist world. The Chinese are no strangers to natural disaster induced famine down through the ages . We in Ireland haven’t yet erected a ‘monument ‘ to the memory of Sir Charles Trevelyan’s ‘common sense ‘ 19th century the market ‘ knows best ‘strategy .

    ‘ A similar worship of ideology at the expense of common sense is why I am, frankly, frightened of elements of the modern environmental movement.’

    I’m glad you say elements for while there is a lot of environmentalist hype out there – there is no little doubt that fossil fuels are in finite supply . The USA with 5% of the world’s population consumes 25% of the oil produced . India and China together have almost 10 times the USA population . Present USA levels of oil consumption cannot be replicated on a world wide basis for the oil is simply just not there .

    A major part of USA foreign policy in the Middle East since the 1970’s has been to secure their oil supply . As a result of the Iraqi War -the USA is now moving into a situation reminiscent of Japan 1938 -1941 whereby USA industry and economy are at the mercy of oil suppliers many of whom are no longer as well disposed to the USA as they once were .

    As for the world oil price -although this looks like a replica of the 1970’s as far as the American consumer is concerned -it isn’t . There has been a strategic shift in the control of world oil supplies to countries other than the USA .

  • Greenflag

    kensei ,

    Some of the producer countries are keeping the oil in the ground as they have more than enough dollars thank you very much .

    Joe Biden the US VP cndidate made a point re opening up the polar oil offshore fields of Alaska that the oil companies there had the capacity to increase their present production levels but were not doing so in order to leverage Congress and the Senate to grant them ‘licenses’ for future development before the next administration comes and slams the door shut . Have’nt we noticed the oil price dropping in recent weeks -Surely it’s nothing to do with an upcoming election ?