Obama is really making a huge mistake by not laowering corporate taxes. Look at 2 countries that lowered their rates: Iceland and Ireland. First, a look at Iceland: Corporate tax rate in Iceland reduced to 15% The Icelandic government this week announced that it would lower the corporate tax rate in Iceland to 15%. The change applies for transactions during the 2008 financial year and will come... [more]
Obama is really making a huge mistake by not laowering corporate taxes. Look at 2 countries that lowered their rates: Iceland and Ireland.
First, a look at Iceland:
Corporate tax rate in Iceland reduced to 15%
The Icelandic government this week announced that it would lower the corporate tax rate in Iceland to 15%.
The change applies for transactions during the 2008 financial year and will come into effect for tax returns filed in 2009.
The reduction in tax from 18% to 15% is part of a strategy to make the Icelandic business environment one of the most competitive in the world. Companies in the Nordic countries pay in the range of 24%-28% tax on their profits and the ratio is even higher in the US, UK, Canada and Australia, at up to 36%.
http://www.icenews.is/index.php/2008/02/20/corporate-tax-rate-in-iceland-reduced-to-15/
And as well all know, Iceland make a good decision. It's not like they went bankrupt or anything....
Now let's look at Ireland:
Just ask Ireland how well raising taxes is working for their economy when just a few years ago its economy was increasing at one of the fastest paces in Europe. Despite its low tax rate, over the last year we have seen Ireland’s unemployment rise and incomes plunge like many countries around the world.
One of the significant, bellwether events leading to Ireland’s recession was Dell’s decision to move its operations from Limerick Ireland to Lodz, Poland costing almost 2,000 workers their jobs. A U.S.-based, global computer company, Dell’s exports from Ireland were about 5% of their total economy. How did this happen to a country that has one of the lowest corporate tax rates and used to be one of the main countries companies would use as their manufacturing base?
http://blog.heritage.org/2010/03/02/a-recurring-theme-more-taxes-means-less-jobs/
Again, another great example of a country lowering their corporate tax rate and not going bankrupt.
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"Canada is poised to cut its corporate-tax rate to 16.5% on Jan. 1, part of a decade-long campaign that some experts say is making the country one of the most cost-effective places to do business in the developed world."
http://online.wsj.com/article/SB10001424052970203525404576050080874854882.html
Trouble on the horizon?
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Response by Socialist
about 15 years ago
Posts: 2261
Member since: Feb 2010
Now let's check in with our CATO friends:
Was this dramatic change the luck of the Irish? Not at all. It resulted from a series of hard-headed decisions that shifted Ireland from big government stagnation to free market growth. After years of high inflation, double-digit unemployment rates, and soaring government debt that topped 100 percent of GDP, Irish policymakers began to cut spending in the late 1980s in a desperate bid to recover financial stability.
And Ireland has steadily reduced its tax rates. The top individual income tax rate was cut from 65 percent in 1985 to 42 percent today. The capital gains tax rate was cut from 40 to 20 percent in 1999.
However, the key to Ireland's success has been its excellent tax climate for business. In 1980, Ireland established a corporate tax rate for manufacturing of just 10 percent. That low rate was subsequently extended to high-technology, financial services, and other industries. More recently, Ireland established a flat 12.5 percent tax rate on all corporations -- one of the lowest rates in the world, and just one-third of the U.S. rate.
Low business tax rates have helped Ireland attract huge inflows of foreign investment. Given the country's modest size, it boosts a high-tech industry second to none. Intel, Dell, and Microsoft are among the island's biggest exporters. Ireland also hosts booming insurance, banking, money management, and pharmaceutical industries.
Ireland was hurt by the real estate bubble, not low corporate tax rates. I'm not aware of a link between low corporate tax rates and real estate appreciation please share.
Iceland was hurt by an over-leveraged banking sector that was disproportionate to the countries GDP. The country also suffered from a central bank that let inflation run away, which introduced yet more capital distortions.
Ignored comment.
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Response by Socialist
about 15 years ago
Posts: 2261
Member since: Feb 2010
But if you look at corporate tax rates throughout the world, Ireland and Iceland are very low. Greece is also quite low, with a 25% rate. Dubai (UAE) has NO corporate tax rate. Yet we all know what happened to Ireland, Iceland, Greece, and Dubai.
But India is at 34%. Brazil is 34%. Both are growing.
If there are other factors involved, then why have none of those factors hurt high tax countries? European countries with high taxes should have collapsed. After all, they are all linked to Ireland and Greece through the EU and the Euro. The fire should have spread and burned down the next door house.
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Response by huntersburg
about 15 years ago
Posts: 11329
Member since: Nov 2010
There is ZERO reason for a global company to be in Ireland. Or Iceland.
Unless, they can move their and pay a lower tax rate than they can pay elsewhere.
So the decision for Ireland, or Iceland, is get a low rate of something, or a high rate of nothing.
Now let's check in with our CATO friends:
Was this dramatic change the luck of the Irish? Not at all. It resulted from a series of hard-headed decisions that shifted Ireland from big government stagnation to free market growth. After years of high inflation, double-digit unemployment rates, and soaring government debt that topped 100 percent of GDP, Irish policymakers began to cut spending in the late 1980s in a desperate bid to recover financial stability.
And Ireland has steadily reduced its tax rates. The top individual income tax rate was cut from 65 percent in 1985 to 42 percent today. The capital gains tax rate was cut from 40 to 20 percent in 1999.
However, the key to Ireland's success has been its excellent tax climate for business. In 1980, Ireland established a corporate tax rate for manufacturing of just 10 percent. That low rate was subsequently extended to high-technology, financial services, and other industries. More recently, Ireland established a flat 12.5 percent tax rate on all corporations -- one of the lowest rates in the world, and just one-third of the U.S. rate.
Low business tax rates have helped Ireland attract huge inflows of foreign investment. Given the country's modest size, it boosts a high-tech industry second to none. Intel, Dell, and Microsoft are among the island's biggest exporters. Ireland also hosts booming insurance, banking, money management, and pharmaceutical industries.
http://www.cato.org/pub_display.php?pub_id=8136
Ireland was hurt by the real estate bubble, not low corporate tax rates. I'm not aware of a link between low corporate tax rates and real estate appreciation please share.
Iceland was hurt by an over-leveraged banking sector that was disproportionate to the countries GDP. The country also suffered from a central bank that let inflation run away, which introduced yet more capital distortions.
But if you look at corporate tax rates throughout the world, Ireland and Iceland are very low. Greece is also quite low, with a 25% rate. Dubai (UAE) has NO corporate tax rate. Yet we all know what happened to Ireland, Iceland, Greece, and Dubai.
But India is at 34%. Brazil is 34%. Both are growing.
http://en.wikipedia.org/wiki/Tax_rates_around_the_world
Other factors?
If there are other factors involved, then why have none of those factors hurt high tax countries? European countries with high taxes should have collapsed. After all, they are all linked to Ireland and Greece through the EU and the Euro. The fire should have spread and burned down the next door house.
There is ZERO reason for a global company to be in Ireland. Or Iceland.
Unless, they can move their and pay a lower tax rate than they can pay elsewhere.
So the decision for Ireland, or Iceland, is get a low rate of something, or a high rate of nothing.
Im with riversider. There is no link.
With riversider? Ugh.