Ireland’s economy has undergone a remarkable transformation..Thomas L. Friedman of the NY Times attributed Ireland’s economic growth in part to the country’s low corporate tax rate.
Ireland had been the second richest country in the European Union, with a per capita GDP higher than that of Germany, France and Britain. But in the mid-1980s, the economy was faltering, college graduates were emigrating, and the outlook was bleak:
"We went on a borrowing, spending and taxing spree, and that nearly drove us under," said Deputy Prime Minister Mary Harney. "It was because we nearly went under that we got the courage to change."
This change included a corporate tax rate cut to
12.5 percent, far below the rest of Europe, which attracted foreign investment. Nine of ten of the world's top pharmaceutical companies and seven of the top ten software designers now have operations in Ireland.
In 2001 the Tax Foundation hosted a delegation of congressional tax staff on a European tax conference that included a meeting with officials from Ireland’s Industrial Development Agency, who explained that the corporate tax rate cut had stimulated economic growth and new foreign investment.
Conservatives believed that making your corporate taxes low, simple and transparent; and by opening the economy to competition, a country can become wealthy.
Even John McCain used Ireland as an example for his tax cut platform.
Today, you probably haven't seen many conservative articles touting the Irish miracle. Today, the news out of Ireland is far different. The country is suffering from huge deficits and debt, and near 14% unemployment.
Debt Crisis Casts Spotlight On Ireland's Low Taxes
The Irish government indicates the tax base was way too small for the economy, and too many people weren't paying taxes, Without a tax base, the economy and goverment just couldn't run.
According to Wikipedia, The
Irish economy expanded rapidly during the
Celtic Tiger years up to 2007 due to low interest rates among other causes. This led to an expansion of credit and included a
property bubble which began to end in 2007. Irish banks, already over-exposed to the Irish property market, came under severe pressure in September 2008 due to the global
financial crisis of 2007–2010.
Wikipedia also stated that The Republic of Ireland entered into an economic depression in 2009. The Economic and Social Research Institute predicted an economic contraction of 14% by 2010. In the first quarter in 2009, GDP was down 8.5% from the same quarter the previous year, and GNP down 12%.
Unemployment is up 8.75% to 11.4%. The economy exited the recession in the third quarter of 2009 . . .
Ireland is now the poster child for the excesses of supply side economics which is based on a low tax rate. Because the low tax rate hobbled the Irish government, it was not able to do much for the country much when the economic hard times occurred.
This in many respects is a lesson that conservatives should understand form the Bible.
The seven years of plenty, that were in the land of Egypt, came to an end.And Joseph opened all places in which there was food" - all the stores in every city. "And sold unto Mizaim." The stores under Pharaoh's hand were public property, obtained either by lawful taxation or by purchase.
It was a great public benefit to sell this grain, that had been providently kept in store, at a moderate price, and thus preserve the lives of a nation during a seven years' of famine.
"All the land." This is to be understood of the countries in the neighborhood of Egypt. Famines in these countries were not unusual. We have read already of two famines in Palestine that did not extend to Egypt
Genesis 12:10;
Genesis 26:1.
The point that Righatrdia is trying to make is that the government can leave its citizens on their own with low taxes, but when an emergency occurs, it will be unable to help much.
The Egyptians taxed its citizens and bought grain that it put in storage for a rainy day. When the hard times followed, the grain stores were opened and the government survived. In Ireland the ruling political party fell to third place for the first time in Irish history after the economy had faltered.
sources:
http://www.npr.org/templates/story/s...ryId=126614692,
http://www.politicalforum.com/showthread.php?p=3147659 and
http://bible.cc/genesis/41-53.htm
