When I was in law school, my tax professor commented one day that the only intellectually respectable argument in favor of the corporate income tax is that it employs a lot of accountants and lawyers. This news story about Ireland, the latest EU country to pass through a fiscal crisis, brought to mind that observation:
The Irish government has been given a stark warning from some of the biggest American companies in Ireland on the risk of a mass exodus if the country’s low corporation tax rate is raised.
The warning – from executives at Microsoft, Hewlett-Packard (HP), Bank of America Merrill Lynch and Intel – spoke of the “damaging impact” on Ireland’s “ability to win and retain investment” should the country’s corporation tax rate be increased from 12.5pc.
The U.S. had, last time I checked, the second-highest corporate income tax in the developed world at 35 percent. And that’s only the federal tax–state corporate income taxes range as high as 12 percent. It’s interesting that Google, too, has warned Ireland against raising its corporate income tax:
Google has strongly warned against any corporate rate tax increase, saying that a move to increase business costs would damage Ireland’s competitiveness.
“Anything that impinges on Ireland’s competitiveness is going to be a big thing for Google, including corporation tax,” Google Ireland boss John Herlihy told the Irish Independent.
“And anything that increases the cost-base of a business is negative for competitiveness.”
There is nothing controversial about those observations, but here in the U.S. Google is relentlessly left-wing.
For some reason, Americans tend to be complacent about our business climate. In fact, the same laws of economics that apply to Ireland and every other country also apply to us. We are, in many ways, not as competitive as we should be. Our sky-high corporate income taxes and outrageously progressive personal taxes are among a number of factors that seriously inhibit economic growth.