US President Joe Biden will be responsible for bringing “leprechaun economics” to an end, a Clare TD has said.
In 2017, the Republican Party introduced a huge corporate tax cut during Donald Trump’s time as US President. The underlying premise for this was aimed at bringing millions of jobs back home as it was felt US corporations were moving operations outside of the States to avoid paying US taxes. No visible effect of the tax cut was witnessed on business investment in the country.
Members of Joe Biden’s administration believe that aspects of the US tax code have built an incentive to move jobs abroad. The Made in America Tax Plan includes a proposal for a 21 per cent minimum tax rate on overseas profits. Their plan to create new jobs centres around the development of new taxes.
Speaking on Today FM’s The Last Word about the impact of COVID-19 restrictions on the Irish economy, Clare TD Michael McNamara (IND) stated, “Our economy is doing fine based on the fact that we’re a tax haven but that unfortunately is coming to an end. Our GDP growth at 25 percent in one year is, unfortunately nice to be able to believe in it but it is leprechaun economics and it is coming to a rapid end courtesy of Joe Biden”.
Chief Executive of the American Chamber of Commerce Ireland, Mark Redmond did not believe US multinationals were running out of road in Ireland as a result of the proposed measures. He explained that United States secretary of the treasury, Janet Yellen is “focusing on a race to the bottom in coporation tax rates, Ireland isn’t in that race and in fact Ireland has increased its corporate tax rate since US multinationals have been coming here and in fact this issue went its way through the Congress and bipartisan give and take, the critical importance strategic place Ireland plays for United States business interests will come into sharp focus”.
Redmond added, “The United States has five percent of the world’s population, its economic model demands it does business with the other 95 percent, the most important market for it is the European Union and who is the most successful English speaking gateway to the European Union for US business, that’s Ireland and I think Ireland is very well placed but we need to be very strategic in how we manage this process”.
He maintained, “tax never turns a bad business decision into a good one. Clearly US investment by 800 companies in Ireland has been good business decisions because they keep on taking them. While tax is important, how we are going to keep being successful and stay attracting US businesses is about talent, innovation, infrastructure, inclusion and sustainability are the key factors, where people want to live is also hugely important. Tax is not the only criteria”.