Fiscal Council: Up to €6 billion of Corporation Tax may be temporary

According to the oracle of Dalkey, Mr. David McWilliams, we would have an economy like Albania's if it wasn't for the Multinationals.
Of course that can't be true as I distinctly remember the teachers telling us it was all down to them and our world class education system during the last boom (although the crassh had nothing to do with them). The cynic in my thinks that they just said that to get another pay rise but I try to rise above that sort of thinking.

The point is that we don't just get the €6 billion a year from them, we probably get half out tax take when income tax, VAT and everything else the wages they pay generates is taken into account. So, if the €6 billion goes there will be far more than that going with it.
Then we might start looking for value for money in state spending but of course by then it will be far too late.

Purple said:

Or efficiently deliver health services. That's probably the best option; do it right and we'll have far better services and have to spend less.

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Of course, but speaking from my own personal experience, the service provided to me and my elderly parents has always been excellent, save some minor inconveniences.
Its getting into the system that is the big issue as far as I can see.
If the private health insurance industry was replaced by a universal healthcare system things would improve greatly.

Purple said:

The point is that we don't just get the €6 billion a year from them, we probably get half out tax take when income tax, VAT and everything else the wages they pay generates is taken into account. So, if the €6 billion goes there will be far more than that going with it.

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My question would be is - where are they to go?
From a multinational prospective, Ireland offers competitive tax rates, mild climate, political stability (as stable as anywhere else), English speaking and educated workforce, access to EU market, modest Labour pressures, quick access to ports, business friendly government (nothing sells Ireland to corporates better than fighting off a €15bn windfall from Apple).

You would be hard pressed to find as equal opportunity to tick all those boxes elsewhere in the EU.
Corporations are in the business of doing good business. Ireland offers a good deal, we shouldn't be on the bended knee thanking them anymore than they should be grateful to Ireland.

Purple said:

To encourage them not to get fat. It's the same reason we tax alcohol.

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You'd have to tax calories. It's the over-consumption of calories causing obesity (mostly), not sugar or fat. Why not just cut out the middle man and tax fat people directly? You could have tax bands linked to BMI ranges. Of course, there's no evidence any of your taxes work and they generally just serve as a tax on the poor and an incentive to make nice things taste awful.

Purple said:

To encourage them not to get fat. It's the same reason we tax alcohol.

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Isnt alcohol one of the heaviest taxed products?
Could you honestly say that taxation of alcohol has discouraged consumption?

WolfeTone said:

Of course, but speaking from my own personal experience, the service provided to me and my elderly parents has always been excellent, save some minor inconveniences.
Its getting into the system that is the big issue as far as I can see.

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No my experience or, indeed, the experience of those on trolleys and waiting lists.
A friend recently attended the Beacon Hospital in Dublin. She was discharged at 8 on a Sunday morning. When I had kids in Tallaght hospital we always had to spend the weekend hanging around waiting for the consultant to come in on the Monday afternoon to discharge us. The "He'll probably discharge you when he sees you" line on a Friday meant that we had to spend two days hanging around waiting for someone to do their job. Maybe someone earning €200k-€300k a year should have to work the odd weekend.

WolfeTone said:

If the private health insurance industry was replaced by a universal healthcare system things would improve greatly.

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How would that help? The State would have to come up with €2 billion extra to fund the subsidy that the private healthcare industry currently plugs the public system with.

WolfeTone said:

My question would be is - where are they to go?
From a multinational prospective, Ireland offers competitive tax rates, mild climate, political stability (as stable as anywhere else), English speaking and educated workforce, access to EU market, modest Labour pressures, quick access to ports, business friendly government (nothing sells Ireland to corporates better than fighting off a €15bn windfall from Apple).

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With all due respect that shows a fundamental lack of understanding of how mobile capital is and what the MNC's actually use Ireland for (what they are paying tax on). You should also remember that one in four of the high-tech jobs in Ireland are filled by immigrants (those people who come here to "steal" the jobs that we can't or won't do). Take a look at the number of companies who have moved their manufacturing from Ireland to Costa Rica. Then look at what they still actually do here.

WolfeTone said:

You would be hard pressed to find as equal opportunity to tick all those boxes elsewhere in the EU.
Corporations are in the business of doing good business. Ireland offers a good deal, we shouldn't be on the bended knee thanking them anymore than they should be grateful to Ireland.

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We make money from them paying their global tax bill here. They could still sell into Europe, have exactly the same market access, and be 10% of their current size.

The point isn't hyperbole about bended knees and who is greatful, it is to understand that we are a tax haven which funds our inefficient public services by stealing taxes from other countries. We are fast running out of road as other countries rightly do what they can to stop our unethical behaviour. We need to realise that and plan for it. The threats are both political and economic and they are very real.

24601 said:

You'd have to tax calories. It's the over-consumption of calories causing obesity (mostly), not sugar or fat. Why not just cut out the middle man and tax fat people directly? You could have tax bands linked to BMI ranges. Of course, there's no evidence any of your taxes work and they generally just serve as a tax on the poor and an incentive to make nice things taste awful.

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Cheap calories in the form of sugars and fats are the main problem. If you don't understand the difference between the overall food value of an orange and a chocolate bar which may contain the same calories then there's little point in talking to you.

WolfeTone said:

Isnt alcohol one of the heaviest taxed products?
Could you honestly say that taxation of alcohol has discouraged consumption?

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So why are so many campaigners in the area seeking minimum per unit pricing?
Could you honestly say that alcohol sales would not increase if there was no tax on it?

Purple said:

So why are so many campaigners in the area seeking minimum per unit pricing?
Could you honestly say that alcohol sales would not increase if there was no tax on it?

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Because so many campaigners are nanny staters. Also, a calorie is a calorie. It's simply a unit of energy. If you eat enough oranges you'll put on weight. A ton of feathers weighs the same as a ton of lead. It's very basic maths, if your calories in > calories out you'll gain weight. The problem of over-consumption of calories is far more difficult to tackle than just taxing sugar/fat. All of this is totally off-topic - maybe it's deserving of its own thread?

24601 said:

Because so many campaigners are nanny staters. Also, a calorie is a calorie. It's simply a unit of energy. If you eat enough oranges you'll put on weight. A ton of feathers weighs the same as a ton of lead. It's very basic maths, if your calories in > calories out you'll gain weight. The problem of over-consumption of calories is far more difficult to tackle than just taxing sugar/fat. All of this is totally off-topic - maybe it's deserving of its own thread?

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"a calorie is a calorie"... Sweet This post will be deleted if not edited immediately.

At Harvard Medical School, Dr. Dariush Mozaffarian, an associate professor of medicine and epidemiology whose research was cited by experts in the film, said that the long-held idea that we get fat solely because we consume more calories than we expend is based on outdated science.

He has studied the effects that different foods have on weight gain and said that it is true that 100 calories of fat, protein and carbohydrates are the same in a thermodynamic sense, in that they release the same amount of energy when exposed to a Bunsen burner in a lab. But in a complex organism like a human being, he said, these foods influence satiety, metabolic rate, brain activity, blood sugar and the hormones that store fat in very different ways.

Studies also show that calories from different foods are not absorbed the same. When people eat high-fiber foods like nuts and some vegetables, for example, only about three-quarters of the calories they contain are absorbed. The rest are excreted from the body unused. So the calories listed on their labels are not what the body is actually getting.

“The implicit suggestion is that there are no bad calories, just bad people eating too much,” Dr. Mozaffarian said. “But the evidence is very clear that not all calories are created equal as far as weight gain and obesity. If you’re focusing on calories, you can easily be misguided.”

Purple said:

"a calorie is a calorie"... Sweet This post will be deleted if not edited immediately.

At Harvard Medical School, Dr. Dariush Mozaffarian, an associate professor of medicine and epidemiology whose research was cited by experts in the film, said that the long-held idea that we get fat solely because we consume more calories than we expend is based on outdated science.
He has studied the effects that different foods have on weight gain and said that it is true that 100 calories of fat, protein and carbohydrates are the same in a thermodynamic sense, in that they release the same amount of energy when exposed to a Bunsen burner in a lab. But in a complex organism like a human being, he said, these foods influence satiety, metabolic rate, brain activity, blood sugar and the hormones that store fat in very different ways.
Studies also show that calories from different foods are not absorbed the same. When people eat high-fiber foods like nuts and some vegetables, for example, only about three-quarters of the calories they contain are absorbed. The rest are excreted from the body unused. So the calories listed on their labels are not what the body is actually getting.
“The implicit suggestion is that there are no bad calories, just bad people eating too much,” Dr. Mozaffarian said. “But the evidence is very clear that not all calories are created equal as far as weight gain and obesity. If you’re focusing on calories, you can easily be misguided.”

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That's great an all but that film has been largely discredited along with many of the scientific claims in it. And citing one Professor does not a scientific conclusion make.

24601 said:

That's great an all but that film has been largely discredited along with many of the scientific claims in it. And citing one Professor does not a scientific conclusion make.

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Link please.

Are you honestly saying that, assuming the same physical activity level, someone who consumed 2500 calories a day from crisps and chocolate will be as thin and healthy as someone who consumes 2500 calories a day from fruits, vegetables and lean meat?
Do remember that we use 20-30% of the calories in protein to digest that protein but only 3% of the calories in refined fat.

Purple said:

Link please.

Are you honestly saying that, assuming the same physical activity level, someone who consumed 2500 calories a day from crisps and chocolate will be as thin and healthy as someone who consumes 2500 calories a day from fruits, vegetables and lean meat?
Do remember that we use 20-30% of the calories in protein to digest that protein but only 3% of the calories in refined fat.

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What this has to do with corporation tax is beyond me. A cursory Google search will bring up loads of articles debunking the film. The science isn't anywhere near as settled as you seem to think. For instance, your claim in relation to the 20-30% calorie expenditure for protein is from a study with 17 people. Seventeen. To bring this back on topic can you show me any examples of how sugar/fat taxes have worked? Also, would you be in favour of applying the tax to say, chicken dippers and waffles? Why are you targeting "refined" fat? How would such a tax be designed?

24601 said:

What this has to do with corporation tax is beyond me. A cursory Google search will bring up loads of articles debunking the film. The science isn't anywhere near as settled as you seem to think. For instance, your claim in relation to the 20-30% calorie expenditure for protein is from a study with 17 people. Seventeen. To bring this back on topic can you show me any examples of how sugar/fat taxes have worked? Also, would you be in favour of applying the tax to say, chicken dippers and waffles? Why are you targeting "refined" fat? How would such a tax be designed?

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You are the one who dragged the thread off topic with what is quite frankly utter nonsense.

You haven't answered any questions but rather attacked sources with unsubstantiated opinion.
The idea that the type of foods we eat don't matter, just their calorie count, is ludicrous. The way in which energy is released, how foods make us feel full, the other health and nutrients they provide, their link to things such as heart disease and type 2 diabetes; all of these things matter. Calories are calculated based on the energy content of the raw food. Therefore sugary drinks, chocolate, crisps etc have the calories as stated on the wrapper but meat, for example, has a lower calorie count than stated if you cook it and drain off the fat.
We tax alcohol and tobacco to reduce consumption and encourage general health but being fat kills more people in the developed world than either tobacco or alcohol. It also costs billions. Alcoholics and fatties are the biggest blockers in the health sector.

Purple said:

Maybe someone earning €200k-€300k a year should have to work the odd weekend.

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Certainly should. I would imagine anyone earning €300k is probably working the odd weekend, as a private consultant, in the Beacon.

Purple said:

The State would have to come up with €2 billion extra to fund the subsidy that the private healthcare industry currently plugs the public system with.

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The private healthcare industry does not 'plug' or subsidize the public system. Is that €2bn figure anything to do with with 2m+ people that pay private health insurance in addition to tax?
The private healthcare industry is a scam of the highest order. A money fest for consultants and shareholders of insurance corporation selling their wares by way of shiny hotel style lobbies, colourful multi-plan brochures promising private rooms (if available) and flat screen HD TV's.
You have to hand it to those marketing firms, they really do earn their buck.
I recently had cause to see a private consultant. Even with PI it cost me €240. Ordinarily it is only €200 but as it was my first appointment with this consultant I had to pay an additional €40 (seriously, I was honored to have this privilege bestowed upon me).
The blood tests I had were subsequently clear, and I was to hear back in a week.
Three weeks later and EIGHT phonecalls to his office he finally found time to deliver my results. And further to boot, he has moved hospital, so I guess I will always remain a first-time patient for this guy.

Purple said:

With all due respect that shows a fundamental lack of understanding of how mobile capital is and what the MNC's actually use Ireland for

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I understand the mobility of capital only too well, and how Ireland treats their profits favourably for tax, and all within the law of the EU.
But it would be naive to think that multinationals are doing us any favours. There are good reasons why they are here beyond the favourable tax treatment.

Purple said:

They could still sell into Europe, have exactly the same market access, and be 10% of their current size.

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Yes, I agree, but this is where long-term it gets complicated. This is where organizations like the IDA have done a great job. There is quid pro quo here - favourable tax treatment for sustainable and significant employment.
In the main that is what occurs, save the financial industry who abused the system through gold-plates (but those leeches would sell their great grannies corpse if they could).
Apple employ some 5,500 people in Ireland and have been here since 1980. They owe €15bn. The equivalent of paying each one of those workers €68,181pa for 40yrs!
So the favourable tax treatment is not without a return. The return is sustainable employment in the country.

Purple said:

We are fast running out of road as other countries rightly do what they can to stop our unethical behaviour. We need to realise that and plan for it. The threats are both political and economic and they are very real

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I agree, but it still begs the question - where will they go?
If they all hop and jump to Costa Rica, or wherever, in the short-term that will hurt Ireland, in the long-term, access to the biggest market will become more restrictive.
Not because they are no longer present in Ireland, but because they are no longer present in EU.

Purple said:

Could you honestly say that alcohol sales would not increase if there was no tax on it?

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No I couldn't, but I asked you a different question. Has high tax rates, in your opinion, deterred alcohol consumption in this country?

WolfeTone said:

The private healthcare industry does not 'plug' or subsidize the public system. Is that €2bn figure anything to do with with 2m+ people that pay private health insurance in addition to tax?

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Yes, that's what I am saying; there is an additional €2 billion a year going into health services in this country which wouldn't be there without private healthcare. The state would otherwise have to come up with that money, ergo that money is a subsidy.

WolfeTone said:

There are good reasons why they are here beyond the favourable tax treatment.

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Such as? Please don't say our world class education system!

WolfeTone said:

If they all hop and jump to Costa Rica, or wherever, in the short-term that will hurt Ireland, in the long-term, access to the biggest market will become more restrictive.

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In the long term Europe won't be the biggest market. In the long term if we have to charge the same tax rates as America they will just move home to America.

WolfeTone said:

No I couldn't, but I asked you a different question. Has high tax rates, in your opinion, deterred alcohol consumption in this country?

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Because it makes it more expensive. Have you heard of price elasticity? It is certainly the case that alcohol, and particularly beer, is relatively price inelastic but spirits are more price elastic. Read this for an overview of the Irish situation and graphs showing the link between income growth and alcohol consumption.

Purple said:

Yes, that's what I am saying; there is an additional €2 billion a year going into health services in this country which wouldn't be there without private healthcare. The state would otherwise have to come up with that money, ergo that money is a subsidy.

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Yes, and what im saying is that through a progressive tax system a better outcome could be achieved with everyone having equal access to the healthcare they need, and no need for shiny multi-plan brochures, unsolicited marketing etc trying to offer 'better deals'.

Purple said:

Such as? Please don't say our world class education system!

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Access to EU markets. Its wrong to automatically assume that if US multinationals all pull back to US that they will have as favourable conditions, tax, pricing, etc as they do now while present in the EU creating employment.

Purple said:

Read this for an overview of the Irish situation and graphs showing the link between income growth and alcohol consumption.

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There is nothing attached.
But to elaborate my question, has high taxes on alcohol had an effect on alcohol consumption that shows noticeable in roads tacking the health and social disorders associated with alcohol? In other words, tax on alcohol hasnt stopped liver disease, domestic abuse, over-crowding a&e on weekends, etc.

WolfeTone said:

Yes, and what im saying is that through a progressive tax system a better outcome could be achieved with everyone having equal access to the healthcare they need, and no need for shiny multi-plan brochures, unsolicited marketing etc trying to offer 'better deals'.

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We have the most progressive taxation system in the world and a dangerously narrow income tax base. How much worse would you like to make it?

WolfeTone said:

Access to EU markets. Its wrong to automatically assume that if US multinationals all pull back to US that they will have as favourable conditions, tax, pricing, etc as they do now while present in the EU creating employment.

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If they have roughly the same tax treatment in the USA they will move their IP etc back there. The tax the MNC's pay here is not based on the activities they carry out here. The main reason they are here and employ people here is we collude with them to evade tax in the rest of the world.

WolfeTone said:

There is nothing attached.
But to elaborate my question, has high taxes on alcohol had an effect on alcohol consumption that shows noticeable in roads tacking the health and social disorders associated with alcohol? In other words, tax on alcohol hasnt stopped liver disease, domestic abuse, over-crowding a&e on weekends, etc.

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Attachment there now. I think it may answer your questions.

Purple said:

We have the most progressive taxation system in the world and a dangerously narrow income tax base. How much worse would you like to make it?

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It is subjective how 'progressive' our tax system is. Imposing 40% on incomes as low as €36,000 and not increasing at any point higher than that is not very progressive in my opinion. Just a blunt instrument instead.
Without wanting to spiral into never ending debate, there is plenty of scope for altering tax rates, bands, codes that would make the system more fairer in my opinion. Facilitating a universal healthcare system as well.

Purple said:

The tax the MNC's pay here is not based on the activities they carry out here. The main reason they are here and employ people here is we collude with them to evade tax in the rest of the world.

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Yes, I agree, but I think you are missing a central point. The reason we 'collude' with them is that they guarantee sustainable employment.
The favourable tax treatment would be shut down if they decide to bail out to Costa Rica or US. Meaning, the market of EU is not as lucrative as it is now, open to European, or Asian competitors etc to fill the void.
So it is in our interests to facilitate favourable tax treatment and EU access, and it is in their interest to employ lots of people here.