{"id":174,"date":"2024-11-27T07:56:00","date_gmt":"2024-11-27T07:56:00","guid":{"rendered":"https:\/\/www.bourbonnaistax.com\/blog\/?p=174"},"modified":"2024-11-26T00:57:30","modified_gmt":"2024-11-26T00:57:30","slug":"when-irish-eyes-are-smiling","status":"publish","type":"post","link":"https:\/\/www.bourbonnaistax.com\/blog\/when-irish-eyes-are-smiling\/","title":{"rendered":"When Irish Eyes Are Smiling"},"content":{"rendered":"
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Economies across the board are roaring back from the pandemic. But few have roared back faster than Ireland. The Emerald Isle is projected to grow by 2.5% this year and 3% next year. The Wall Street Journal<\/em> reports the government is stashing cash in two sovereign wealth funds and regulators are warning they\u2019re spending so fast they may overheat the economy. Still, there\u2019s enough left over to start work on a \u20ac2.2 billion children\u2019s hospital and spend \u20ac10 million on keeping the kids off their phones at school. (If you figure out an answer, could you maybe send it our way?)<\/p>\n\n\n\n

Where is all that green coming from? Has someone finally found the pot of gold at the end of the rainbow? Did Ireland win the Irish sweepstakes?<\/p>\n\n\n\n

The real answer lies in two less romantic places: Washington, DC and Brussels, Belgium. That\u2019s where our government, along with the European Union, has dedicated a decade\u2019s worth of effort to clamping down on global corporate tax avoidance.<\/p>\n\n\n\n

For years, global giants like Apple, Amazon, and Google moved big chunks of their income to places like the Cayman Islands. They didn\u2019t need to send actual people there\u2014they did it by moving intellectual property like patents and trademarks. That move let them avoid tax rates of up to 35% here at home. But the lawmakers who set those rates aren\u2019t stupid. (I know what you\u2019re thinking, wise guy.) And so, with the Tax Cuts and Jobs Act of 2017, they passed the biggest corporate tax reform in a generation. Specifically, they lowered the rate to a far more competitive 21% in exchange for closing out the loopholes that let corporations their profits on an all-inclusive Caribbean holiday. Those new rules included a global minimum tax of 10.5% on worldwide profits.<\/p>\n\n\n\n

Today, about 1,000 U.S. companies have moved operations to Ireland, where they pay 15%. Ireland\u2019s corporate tax collections have grown from \u20ac8.1 billion in 2017, the year before our new rates took effect, to an estimated \u20ac37.5 billion in 2024. That\u2019s a lot of potatoes! It works out to about $7,300 for every Irish man, woman, and child. In contrast, corporate tax collections work out to just $1,570 per person here, or $1,300 per person across the Irish Sea in the United Kingdom.<\/p>\n\n\n\n

How long can Irish eyes keep smiling? That\u2019s a wild card. Trump and the Republicans are back in control in Washington, just like in 2017. But now Trump wants to cut our rate even lower, at least for companies that make products here in the U.S. Matching Ireland\u2019s rates would eliminate the incentive many companies have to move and greatly simplify life for the accountants and attorneys managing the whole cross-border flow.<\/p>\n\n\n\n

But our deficit, which stood at $20 trillion when Trump signed the corporate reform into law, has ballooned to $36 trillion today. Interest alone is costing $1.8 billion per day. And extending the TCJA\u2019s personal provisions is the new administration\u2019s highest priority. There may just not be enough gold in our own pot to threaten Ireland\u2019s windfall.<\/p>\n\n\n\n

Modern life is full of shadowy forces with surprising influence. Back in 1994, Bill Clinton\u2019s advisor, James Carville, made an amazing comment: \u201cI used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.\u201d Our tax system is just another one of those hidden levers that move mountains. That\u2019s why you need us on your side to manage it all!<\/p>\n","protected":false},"excerpt":{"rendered":"

Economies across the board are roaring back from the pandemic. But few have roared back faster than Ireland. The Emerald Isle is projected to grow by 2.5% this year and 3% next year. The Wall Street Journal reports the government is stashing cash in two sovereign wealth funds and regulators are warning they\u2019re spending so fast they may overheat the economy. Still, there\u2019s enough left over to start work on a \u20ac2.2 billion children\u2019s hospital and spend \u20ac10 million on keeping the kids off their phones at school. (If you figure out an answer, could you maybe send it our way?)<\/p>\n","protected":false},"author":2,"featured_media":175,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3],"tags":[4,9,64,29],"class_list":{"0":"post-174","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-taxes","8":"tag-tax","9":"tag-tax-strategy","10":"tag-taxpolicy","11":"tag-wealth-tax","12":"entry"},"_links":{"self":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/comments?post=174"}],"version-history":[{"count":2,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/174\/revisions"}],"predecessor-version":[{"id":177,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/174\/revisions\/177"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/media\/175"}],"wp:attachment":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/media?parent=174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/categories?post=174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/tags?post=174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}