Government should double the corporations profits tax and stop cutting wages and pensions

SINCE 1975, Ireland’s GDP doubled every 7½ years to reach €182bn in 2007.

From 1975 to 2007, multinational companies took an average of almost 15% of our GDP out of our country every year.

They called it “repatriation of profits”. Ireland will never see that money again. In the past, some multinational companies adjusted their accounts and shuffled them between various countries to minimise their tax liabilities.

This was known as “transfer pricing”. It took a while to uncover that econometric black hole in the mid-1980s. Over the years, multinationals have paid, on average, 62% of all corporation tax collected. They repatriate seven times as much annually as they pay in corporation tax.

If the Government doubled the rate of corporation tax, multinationals would then repatriate six-sevenths of what they calculate under the present system. That would still be a very generous business incentive.

It would be better to collect an extra €3bn (or more) each year by increasing corporation tax than by slashing public servants’ wages and terrorising old people.

Michael Mernagh

Carrigaline

Co Cork