Comment

Wednesday, December 14, 2005 - Vol. 7 No. 250

In Today's Letter: Comment: Ireland Is a Tax Haven -- So What? Offshore: Manx Leader Attacks OECD. Privacy & Rights: U.S. Totalitarian Regime A Danger.

Ireland Is a Tax Haven -- So What?

Dear A-Letter Reader:

When Bertie Ahern, Ireland's prime minister, recently declared it was time to reinstate the military parade that used to commemorate the Easter Rising, the short-lived rebellion launched by a small band of Irish republicans against the British empire in 1916, the idea was both embraced and rejected here as revolutionary. ''The Irish people need to reclaim the spirit of 1916, which is not the property of those who have abused and debased the title of republicanism,'' Ahern declared at his Fianna Fil party's conference in October.

But there is some evidence that the current leaders of the stalwart nation that gave the world the likes of Edmund Burke, James Joyce, Samuel Becket, Oscar Wilde, and Eamon de Valera, (not to mention the snake banishing Saint Patrick himself), are loosing their courage, if not their common sense.

For reasons we don't comprehend some of Ireland's ruling politicians, including Brian Cowen, the finance minister, don't like their fair land to be called a "tax haven."

It appears they have forgotten that the main reason that Ireland has a well earned reputation as a tax haven is that Ireland's 12.5% corporate tax rate allows multinational companies to move there to cut taxes and has attracted billions in mobile foreign investment. This has made Ireland one of the most prosperous nations in Europe and the envy of the high tax EU nations who hate Ireland's successful tax competition.

Ireland is the world's most profitable country for US corporations that wish to save taxes, according to analysis by the tax journal Tax Notes . Their study found that profits made by US companies in Ireland doubled between 1999 and 2002 from $13.4 billion to $26.8 billion, while profits in most of the rest of Europe fell. In the analysis Ireland was called a "semi-tax haven" for US firms, because firms are involved in real productivity in contrast with locations such as Bermuda where many US corporations only have their corporate registrations but no actual staff or production.

We know that every left dominated group around, the EU, the OECD and even the UN, has made a career out of blasting all tax havens and tax competition among nations in particular. Fearful of loosing the billions of taxpayer funds they regularly squander, the welfare state bureaucrats never met a tax they didn't like. Thus within EU circles, Ireland has been the butt of brutal verbal attacks by near bankrupt socialist leaders in France and Germany, where taxes are high and getting higher, budget deficits are growing, and business jobs are escaping to more attractive venues with low or no taxes and less regulation. Keeping up the constant attack on Ireland's low taxes and tax havens, The New York Times published an editorial calling for so-called Irish "tax loopholes" to be closed, describing Ireland with those dirty words "tax haven''.

Well, Ireland is in fact a tax haven in the special sense of low corporate taxes.  The policies that made it such have turned an impoverished nation into a major European business center and brought anew, historic prosperity to a country where hunger, unemployment and hopelessness once ruled.

OK, so the Irish government, in a crass domestic political move, just abolished tax exemptions for racehorse breeders and "artists" -- we understand that kind of political sop. But if Ireland's leadership ever decides (and we don't think it will) to start raising corporate taxes, it better start planting more potatoes for the next famine. In the meantime, a little more Irish spirit and truth in language calls for an admission that Ireland is indeed a tax haven -- and so what's it to you buddy?

That's the way that it looks from here.
BOB BAUMAN, Editor

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 Manx Leader Denounces OECD Blacklist

 DOUGLAS, Isle of Man: The Chief Minister of the Isle of Man, Donald Gelling, has denounced the OECD for its continued use of a phony blacklist published in 1998 that claims this British Crown Dependency is engaged in "unfair tax competition" because of its low corporate taxes. He said that at the recent OECD global forum on taxation held in Melbourne, steps were taken to reduce the impact of the blacklist but it was not renounced as it should have been. Gelling also criticized bills pending in the US Congress based on the OECD blacklist which, if they became US law, "could threaten the continued or future existence of US-owned corporate operations based in the Isle of Man." 

U.S. Totalitarian Regime A Danger