Poor old Ireland. It’s been a terrible year on Erin’s Isle. The country that most benefited from the boom suffers more than others from the bust. That’s just the way it works. Property prices are in free fall. Unemployment is soaring. And now comes Mr. Obama, pulling the bog out from under the bog trotters.
Your editor operates a mini-multinational. Yes, we have offices all over the world – in Paris, London, Madrid, Buenos Aires, Johannesburg, Melbourne, Bombay…and Waterford, Ireland. That is why we spend so much time traveling…just trying to keep up with business.
We moved to Waterford to take advantage of the 12% corporate tax rate. You gotta be somewhere? Why not go somewhere where they don’t tax you so much?
In practice, this has not proven very important, because we never made enough money in Ireland for the tax rate to matter. Still, it was nice to know that if we ever did make any money in Ireland at least we wouldn’t have to give so much of it to the Irish government.
But along comes Obama’s anti-tax haven initiative…and poor old Ireland is even poorer. The American president proposes to do away with Ireland’s tax advantage altogether…at least as it applies to American firms, who are the main beneficiaries. In fact, he’ll penalize U.S. firms abroad. Not only will they pay local taxes…but they’ll pay U.S. taxes too!
Yes, our poor little micro-multinational will have to pay more taxes. And your poor editor too.
Dear reader…please do us a favor. Please write your congressman. Tell him to drop dead.
Until next time,
for Markets and Money