Fight Right Wing Propaganda - The Myth About Ireland's Low Corporate Taxes

[Median Democrat]

Republicans love to point to Ireland's low corporate tax rate. However, they never mention the entire picture. First, Ireland has far less loopholes than the US tax code, thus the effective tax rate is higher. Second, Ireland also imposes a VAT tax, which is like a sales tax at every stage of production. Third, Ireland also has a relatively high income tax rate. I wish that some liberals on these talk shows would shove this idea of Ireland as some RW tax utopia down their the throats of the RW by asking whether they also advocate that the US increase income taxes, eliminate corporate tax loopholes, and impose a VAT like Ireland.

Indeed, perhaps it is a sign of the right wing bias in mainstream media that these right wingers are allowed to repeat these myths, and John McCain talking points, without any contradiction. So, be prepared for hours of propaganda about Ireland's anti-tax utopia.

The truth? Ireland's income taxes and VAT taxes are far higher, and Ireland is about to sink into double digit unemployment. However, since when did the GOP and mainstream media let truth get in the way of propaganda.

http://www.lowtax.net/lowtax/html/jirdctx.html

/snip

In Ireland the main tax on individuals is income tax. There is also capital gains tax, capital acquisitions tax (which includes inheritance tax), rates (property taxes) and stamp duties on transfers of various types of property. As a member state of the EU, Ireland levies VAT, currently at a rate of 21%.

* * *
Until December 2000, Irish tax-payers were assessed annually to tax on gains in investment funds, at the rate of 20% for Irish-resident funds and 40% for foreign funds. Now there is instead an 'exit tax' of 23% on encashment or maturity, for domestic and foreign funds alike. For non-residents this tax will apply only to Irish-source income.

* * *
Ireland Income Tax
The standard rate of Irish income tax for individuals is 20% on the first EUR32,000 of taxable income, rising to 42% on the balance.

As from 2001 Ireland operated a tax credit system for most personal allowances. There is a personal allowance of EUR1,630 (2006/2007), it is doubled for a married couple. There are some other permitted deductions, including mortgage interest and pension contributions.

Income is comprehensively defined and includes employment income and benefits, income from property, income from a trade or profession, and investment income. An important exemption for one class of individuals applies to the earnings of Irish-resident artists from works of cultural or artistic merit. Overseas workers can deduct a proportion of income relating to the overseas work.

* * *
Ireland Capital Acquisition Tax
Tax is payable on gifts and inheritances; when either the donor of the gift/the testator or the recipient of the gift/the heir is an Irish resident, the tax is also applicable to overseas assets.

Tax is payable at 20%, over and above an exemption which varies depending on the relationship between the parties.

Transfers from a married person to his or her spouse are exempt from the tax.

/snip

Ireland's debt and unemployment rise

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSGD4ArhO0C0&refer=home

/snip

The cost to hedge against losses on Irish government bonds is now the highest in the euro region as Moody’s Investors Service changed its outlook on the top-rated debt to negative.

Credit-default swaps on Ireland rose 2 basis points to 262.5, according to CMA Datavision. Investors perceive that the second riskiest nation is Greece, with contracts on its government debt costing 255 basis points, CMA prices show.

“The current economic crisis is likely to significantly affect Ireland’s economic strength and government financial strength for the years to come,” Moody’s analysts Dietmar Hornung and Kristin Lindow wrote in a report today.

Ireland’s economy is headed for a record 5 percent slump this year as construction and consumer spending shrink, according to government forecasts. The collapse has lifted unemployment to a 15-year high and may push the budget deficit to more than three times the European Union limit.

The cost to hedge against losses on Irish debt is now more than Chile, the Czech Republic, Israel, Malaysia, Saudi Arabia, Thailand and China, CMA prices showed.

/snip

[Median Democrat]

1. Examples of GOP Spreading Fiction About Ireland Tax Utopia

Here are some examples of Republicans trying to justify their attacks on the stimulus package by relying a fictional Ireland tax utopia:

http://www.foxnews.com/wires/2008Jun13/0,4670,CandidatesEconomy,00.html

/snip

The Tax Policy Center concluded that Obama's would offer much larger tax breaks to low- and middle-income taxpayers than McCain would.

The report said McCain's reduced individual and corporate rates would help "economic efficiency and increase domestic investment." It is a point McCain makes repeatedly on the campaign trail, noting that the United State's 35 percent corporate tax rate is second only to Japan's. He points out that Ireland has a corporate rate of only 11 percent, making it attractive for businesses to relocate there.

McCain has also continued to push for a summertime gas tax holiday, arguing that would provide relief for drivers and truckers. He has scoffed at economists who say the reduction would either be too small to provide relief or that the price of gasoline would increase to make up for the lack of the tax. Obama opposes the tax holiday.

/snip

http://www.washingtonmonthly.com/archives/individual/2009_01/016642.php

/snip

REPUBLICANS HEART IRISH TAX RATES.... While pushing back against the economic stimulus plan, Republicans have, of course, been demanding more tax cuts. But what kind of tax cuts are we talking about? Republican Policy Committee Chairman John Ensign, the fourth-ranking Republican in the chamber, argued yesterday:

"You know, we have the second highest corporate tax rate in the industrialized world. Microsoft, which is a great American company, has zero exports from the United States. They have a lot of exports from Ireland, because, guess what, Ireland has a 12.5 percent corporate tax rate; we have a 35 percent corporate tax rate."


Are we back to this again? John McCain relied on this talking point quite a bit last year. In the first presidential debate, the Republican nominee said: "Right now, the United States of American business pays the second-highest business taxes in the world, 35 percent. Ireland pays 11 percent. Now, if you're a business person, and you can locate any place in the world, then, obviously, if you go to the country where it's 11 percent tax versus 35 percent, you're going to be able to create jobs, increase your business, make more investment, et cetera."

/snip

[Median Democrat]

6. ABC: Sen. Jim DeMint Repeated The Corporate Tax Talking Point Today

Sen Demint from South Carolina repeated this talking point again, and once again, no mention is made of the fact that (1) Ireland's income taxes and VAT taxes are much higher than the U.S., and (2) despite the super low corporate tax rate, Ireland's economy appears to be in worse shape than the U.S. as it heads into double digit employment. WTF?

We need more Democrats to start shoving this talking point down the throat of Republicans, because it is complete bullshit.

http://news.yahoo.com/s/ap/20090202/ap_on_go_co/congress_stimulus

[pepperbear]

2. not to mention, you know, the HEALTH CARE that is provided. n/t

[givemebackmycountry]

3. Oh well shit, then the hell with Ireland

And their SOCIALIST policies.
Shit, they are damn near communists for christs sakes.
Who gives a shit if they have great beer and whiskey.
FREE HEATLH CARE?

They're COMMUNISTS!

:sarcasm:

[HuskiesHowls]

4. First, they need to know what is actually PAID here in corporate taxes!!

"While the middle class struggles to fulfill its tax obligations, 60 percent of corporations pay no taxes at all. At a time of rising corporate profits, the GAO reports that 95 percent of corporations paid less than 5 percent of their income in taxes, and 6 in 10 paid nothing at all in federal taxes from 1996 through 2000."
http://www.americanprogress.org/issues/2004/04/b45747.html
<snip>

That's just from ONE article at American Progress. I got into a discussion with a friend at work, prior to the election, and he wanted information about how corporations were avoiding paying taxes. I found many articles, and some rather interesting things. Why are there so many corporations registered in Delaware?? Its because they allow so many more tax loopholes than any other state. How do corporations avoid paying taxes, and yet show a profit? Because they find the loopholes and move money around so that they can take advantage of these loopholes.

It was absolutely mind boggling to read about what goes on in the world of corporate tax....its so easy to avoid it, I'm surprised ANY corporation pays any taxes whatsoever.

[Median Democrat]

7. It Is Mindnumbing How The Media Doesn't Have The Guts To Challenge The RW

When a Democrat is interviewed, the interviewer always feels obliged to mention the right wing talking points. However, where are the journalists challenging the lies of the Republicans. I am about to toss my remote at my TV the next time I hear a Republican talking about how great Ireland's low corporate tax is, and no one calling the Republican on this crap.

[Blue Dog Dominion]

5. We need some form of VAT

[vadawg]

9. As long as they get rid of other taxes before they bring it in

i sure as hell dont want to pay an extra 17.5% on the things i buy.

[GeorgeGist]

8. No myth ...

Ireland is in deep trouble because of it. http://www.guardian.co.uk/business/feedarticle/8335229

[Median Democrat]

10. Is It Too Much To Ask A Journalist To Ask A Follow-Up Question?

With just a little bit of effort, one can find numerous stories blowing up the notion that Ireland is somehow avoiding the effects of the recession by virtue of its low corporate tax rate. Yet, Republican after Republican repeats this talking point (lie), and no one has the guts to question them on it.