Double corporation tax

For many years economists have argued about whether Gross Domestic Product (GDP) or Gross National Product (GNP) is the better measure of the overall economic performance of a country.

Net Foreign Income (NFI) is the difference between GNP and GDP. In the case of Ireland, it reveals an alarming reality that many commentators overlook.

NFI represents the net flow of money between a given country and the rest of the world. Since 1975, NFI for Ireland has been negative.

That outflow consists significantly of repatriation of: profits by foreign-owned companies; royalties and licensing fees to those companies; and payment for research and development carried out by them. In 1986, NFI in the Irish economy was more reliably quantified than previously at minus €2.5bn (about minus 10% of GDP). From then onward, it has followed a generally downward trend. By 2011, it had fallen to minus €32bn (or minus 20% of GDP). If we continue on the trend, then, by the middle of the 23rd century, we will be giving away 100% of GDP annually.

Every year, our politicians go through their charade of frightening us ordinary citizens in the lead up to the budget. Will they ever stop fooling us with their smooth-talking bluff and bluster?

The case is stronger than ever to double corporation tax. That would help to staunch the haemorrhage of money from our country.

Michael Mernagh

Carrigaline

Co Cork