HP and other US tech corps 'suggest' Ireland be very careful with its corporate tax rate

[thewayne]

Ireland has problems with its banking system and is in need of an EU bailout. Part of the problem is that most all American tech corporations have operations in Ireland to exploit its low corporate tax rate, so billions of dollars flow through Ireland but Ireland doesn't see a heck of a lot tax revenues from said transactions.

So Ireland is talking to the EU about a bailout, and some EU members are saying that they should raise their corporate tax rate. A letter was written by the head of the American Chamber of Commerce in Ireland and a senior Hewlett Packard executive and signed by the Irish heads of HP, Intel, Microsoft, and Bank of America Merrill Lynch.

The letter says: "The IMF, the European Central Bank and the European Commission must realise that any increase in our corporation tax rate would ultimately make us more economically dependent, not less so on our European Union partners."

Separately, John Herlihy, head of Google's 2,000-strong European headquarters in Dublin, told The Belfast Telegraph that "anything that impinges on Ireland's competitiveness is going to be a big thing for Google".

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8148882/US-firms-warn-Irish-over-tax-move.html

http://tech.slashdot.org/story/10/11/21/0157216/Google-Warns-Irish-Government-Against-Tax-Increase

It's a giant shell game. To maximize profits as required by Wall Street and their shareholders, they need to minimize taxes. To minimize taxes, they move to the country with the lowest tax rate. Then when that country threatens to raise taxes, they start crying and mention that taxes are lower in Singapore, India, and China, among others. Rinse, repeat.


Capitalism is dead, long live corporatism!

Comments

[thewayne.livejournal.com]

I almost opened an account with B of A, and am glad I didn't. I was in a town where you had three choices: B of A, Wells Fargo, or one of several local banks. Wells Fargo apparently takes great pride in nickel and diming you to death with fees, so I didn't go with them. B of A, contrary to what they told me over the phone, wouldn't release my initial deposit for over a week even though it was from the local government's Wells Fargo account. Found a better local bank and have been quite happy with them ever since.

Unfortunately we sometimes have little choice where our loans end up. I heard a financial analyst did a study of exactly who owned his home mortgage, and because of the slicing and dicing that's been going on over the past decade, it was a stultifyingly big chart.

[silveradept]

Until one day when even all the small tax rate companies raise their taxes to something the corporations don't want to pay. Then do we start seeing the first corporate-backed militias and takeovers? Or will they all move offshore into their own micronations?

[thewayne.livejournal.com]

It's interesting how prescient some aspects of the cyberpunk literature genre are showing to be somewhat prescient. We do have organizations such as the formerly named Blackwater, so we do have corporate militias. They have not yet been used in takeovers, but I could see it happening.

I personally blame a lot of world problems on Wall Street greed and the demand for quarterly profits. There is not an infinite supply of money in the world, thus it is not possible to have constant profit. It appears that there is no thought to long-term profitability, just quarter-to-quarter. I think it was Warren Buffet who jokingly said that there should be a 100% tax on all stock gains for any executive who sells company stock within 5 years of their leaving said company to discourage this quarter-to-quarter strive for profits.

On today's Slashdot, there is an article about Novell being bought out by a venture capital company and a lot of people stating comments that Novell will be gone as a brand name in 3 years. Wisdom of the crowd prescience or just a bunch of people who don't know what they're talking about?

[silveradept]

With you on the Wall Street profit demands ruining everything. If we nudged the definitions of corporations so that their purpose was not to make profit, but something else, we might be able to stop the maw of Mammon, but it could be too late for that.

As for Novell, they are probably fading into a niche, likely in education and those other infrastructures that they built before people headed to the cloud (and before Google and Cisco took prominence in the networking biz.)