Nothing new here but is all the more terrifying considering the current context. Ireland, a few eggs not even a dozen and a basket case that will make the history books. Oh Dear Mr Swift why did we not head your musings!
From memory Coca Cola made up a staggering proportion of our exports in terms of concentrates production, i.e. the syrup, being one of the top 3 if I am not mistaken. They moved the botteling plant North for better water, grants and such forth. Even though the plant iin Dublin was highly efficient at this stage as the plant in the north is less efficient according to those who went from the south to north to help with the hand over. They just scratch their heads in dismay. Its wages and lower cost base + grants what make it cheaper.
I think its time to set up a ‘taxpin’ website…
Irelands beggar-my-neighbor tax set up will not survive the financial crises caused by the boomers pensions crises over the next ten years. As governments scramble to pay crushing pension obligations they are going to stamp hard on Irelands aiding and abetting multinationals underpaying at least $10B p.a in tax in the US, France and Germany. At the bare minimum I expect all the brass plate operations to be shut down, which seem to account for more than two thirds of the revenue that is channeled through Ireland.
And once the tax advantage is stripped away what is left? An economy as healthy as Portugal’s? Then how do you pay for a Nordic style public expenditure?
I think Ireland is facing the very real possibility of a 1950’s style economic collapse in the next 10 years. Does anyone out there know if the Dept of Finance have written any position papers on policy options regarding loss of the tax advantage? And if so, could one do a FOI on it?
And if not, why not?
Or are they waiting for another Whitaker to dig them out of the mess when no other political evasion is left, and the terrible damage has been done?
Irish Government in over reliance on one sector for tax revenue shock!
Really, it’s shocking to think we have’nt created one major multinational in financial services or technology ourselves in past 2 decades . Similar sized countries like Israel, Finland and Norway have all created indigenous MNCs which prevents overreliance on FDI. Our “businessmen” were too busy with property and raking in cash from local services and retail outlets to care about bigger picture. Ridiculous amounts invested in foreign property compared to new Irish companies. Finfacts did some good articles on it.
The attraction of Ireland for American MNCs could be wiped out with the signing of some legislation in Washington.
Time to get that one way ticket to Australia?
1950’s is that Detroit collapse or somewhere else in the US, world or plain old Ireland? 1950’s (head scratch…)
This is one subject they pointedly ignore in the Modern Irish History they teach in school. I knew things were bad in the mid 50’s but it was not until I read the background chapters in the Festschrift published in honour of T. K Whitaker in the early 80’s that I realized just how close Ireland was to complete economic and social collapse in the mid 50’s.
Never wonder why Fianna Fail under Lemass completely reversed every economic policy they had championed since 1932. A humiliating reversal of what had been a fundamental tenet of their political philosophy. They did it because they had no choice. They were told that their policies had created such a catastrophic economic situation in Ireland by the mid-50’s, with emigration rates that had not been seen since the 1850’s, that Ireland would cease to be a functioning society by the early 1960’s.
Linky link???.. I need to prime up. This is interesting. I didn’t realise the extent. I suppose we are locked in the late 70’s/80/ down turn… actually we been fucked so many times in this wet sod it no wonder people stayed in denial for so fucking long. Can you blame them on an emotional level, not really. Though it is the polar opposite and no extreme is good in the long run as we are finding out.
I suggest getting a copy of Roger and Me to see how bleak things can become
Yes, two very important and highly visible organisations both in terms of employment and tax take, but it strikes me as odd that such and article would ignore the importance to the revenue of what are, fundamentally, shelf companies being used to process corporate profits, such as Microsoft’s vehicle Round Island One Limited. This little known body corporate, was back in 2004 reporting profits of €3.23 billion, which was more than any other company in the State at that time. (Link)
Organisations such as this are vital to government revenues and any change in our tax laws could see them moved, quickly and easily, with no big news coverage of job losses or plant closures as they directly employ no one (other than keeping the odd solicitors assistant busy). However, in fiscal terms, their loss would be nothing short of devastating for the State.
I wouldn’t question the fact of our dependence on foreign companies, but we were discussing Dell in Another Place and it seemed that its contribution was somewhat exaggerated. There seems to be one of these perceptions out there about Dell contributing 6% of (variously) GDP or GNP. This quickly compresses to 2% when a source is sought, but even that seems questionable when we find the CSO stating that the whole of the Mid West region contributes about 7.5% of national gross value added with 8.5% of the national workforce. So if the Dell plant in Limerick constitutes a notable percentage of national output, the rest of the Mid West must be exceptionally unproductive. (For what its worth, Dell seems to account for about 1% of Corporation Tax take. They paid €55 million in 2005. To get some perspective, the Department of Arts, Sport and Tourism spent €460million so far this year – or about eight times what Dell paid in corporation tax three years ago.)
So, indeed, I take it the tax take is more about companies making a paper profit here rather than anything happening in the real economy. Clearly that means that tax revenue is very mobile, and will head off the minute some other country manages to replicate the same dodge. But, to be positive, at least that tax revenue doesn’t in any way depend on the Irish property market.
I think this is the book
My copy is in a box 5000 miles away at the moment so I’m not 100% sure but it sounds about right.
Irelands economic history since 1932 has been a repeated cycle of repeated running a successful economy into the ground. The first cycle started in '32, the second in '77, the third in 2002. In each case the result of utterly feckless and completely irresponsible political policies by the Permanent Party Of Power. When you are ruled by a South American style Peasant/Populist Party who believes in Cargo Cult Economics you end up with South American Style periodic economic catastrophes, all self-inflicted.
I have been for some weeks now. This is what worries me.