Irish economy at risk in Obama tax plan
Plans to close corporate tax loopholes will have serious implications for Ireland
Irish expert slams Obama tax plan as 'wrongheaded' Read More
US President Barack Obama has spelled out plans to close corporate tax loopholes on U.S. multinational corporations and crack down on overseas tax havens.
The new move will have serious implications for the Irish economy which is heavily dependent on the multinationals.
Obama spelled out the Irish dependency today when he said that U.S. companies in just three countries; Ireland, Bermuda and the Netherlands, reported one-third of all foreign profits.
At present, U.S companies can avoid paying taxes on profits earned abroad if they put those profits back into their overseas subsidiaries.
Obama's new tax plan is expected to raise $100 billion in revenue over 10 years.
U.S companies have taken advantage of Ireland’s low corporation tax – at 12.5 percent – and invested heavily in Ireland, making the country one of the top locations for U.S investment in Europe.
Ireland’s low corporation tax, which was left unchanged in its recent supplementary budget, has been a source of tension with other European Union countries, who want harmonize corporation tax rates across Europe.
A study in the U.S journal Tax Notes found that from1999-2002, Ireland was the most profitable country for U.S corporations. During those years, profits by U.S companies in Ireland doubled from $13.4 billion to $26.8 billion.
The author of that study, Martin Sullivan, described Ireland as a “semi tax haven” and noted that for that same period, profits for U.S companies in most of the rest of Europe fell.
Major U.S. companies, such as Pfizer in Ireland, lobbied Congress in March to voice their concerns at the changes to the tax code, arguing that it would make U.S firms less competitive.
They said that the proposed changes would mean that their foreign competitors, many of whom are not obliged to pay taxes on the profits they make from their overseas operations, would have a new competitive advantage.
In March, Treasury Secretary Timothy Geithner told the Senate Budget Committee that the changes would make it harder for U.S. companies to avoid taxes.
"Some proposals will focus on the rules in our tax code that put those who invest and create jobs in the United States at a disadvantage,” Geithner said.
“We will propose rules to both reform U.S. corporations' ability to defer foreign earnings and deter high income individuals and corporations from using tax havens to avoid.”
Irish-American businessman Denis Kelleher, founder of money managing firm Wall Street Access, told IrishCentral that the new proposals would have an effect on U.S. investment into Ireland.
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Brolaur that was brilliant very well put. We do have crazies in Canada just not the violent kind. The quicker that this idiot puts himself away the beIrish students told “No Irish Need Apply” to Chicago for summer 2014
I was wondering where the real Chuck was hiding. I meant nothing by my comment except to invite the Irish students to our fine country and was only giNelson Mandela was against IRA decommissioning its arms during 2000 talks
Chuck very well said, you are really a man of vision. I wish I could have said that. The world needs men like that, he was a lot like the great PresidNelson Mandela was against IRA decommissioning its arms during 2000 talks
You sat back on your effen arses and let the only real leader of Irish men since 1916 starve to death instead you went for the worm Ahern,Cowen &