Originally Posted by Apjp
Absolutely spot on.
People should also bear in mind that Ireland with its
nominal rate of Corporation tax set at 12.5% has an effective rate of taxation of 11.9% i.e. a very low divergence due to the simplicity of the system.
For example France on the other hand has a nominal rate set at 34.34% with an effective rate of 8% due to numerous loopholes and tax breaks.
Some 25% of French companies paid no corporate tax at all in 2009.
Sarkozy is one of the most vocal critics of the Irish Corporation tax rates, he could do with looking at the situation in his own country.
I'd recommend reading this document from the World Bank/PWC
It's a breakdown of taxation rates worldwide.
or this summation in the Irish Times
US companies also provide a huge revenue stream to the Irish exchequer paying 43% of the Corporation tax take in 2009.
Corporation Tax Revenue from Top 250 Companies
Country Corporation Tax Revenue(€ million) Corporation Tax Revenue(%) Number of Companies
Total CT Revenue for 2006 6,223 - -
CT Revenue from Top 250 Companies
3,766 100% 250
of which country of ownership is:
Ireland 762 20% 63
US 1,811 48% 84
UK 502 13% 32
EU 537 14% 54
Rest of the World 154 4% 17
US companies are also seemingly recession a lot more recession proof when compared to indigenous companies - Corporate tax revenue decreased 40% between 2007 and 2009 but revenue from US companies only fell by 4% in the same period.
Increasing the rate of tax will probably generate very little extra revenue and will most probably cost jobs and future investment.
So in summation the ULA and Angela Merkel are talking rubbish.
Table 5: Corporation Tax Revenue from US Companies 2001 to 2009
Year Corporation Tax Revenue from US Companies(€ million) Share of Total Corporation Tax Revenue
2000 1,189 28%
2001 1,550 36%
2002 1,720 40%
2003 1,597 37%
2004 1,562 35%
2005 1,828 35%
2006 1,907 31%
2007 1,742 28%
2008 2,090 40%
2009 1,677 43%
The Economic and Fiscal Contribution of US Investment in Ireland