Ireland's low tax rate for businesses draws Obama criticism, defenders
DUBLIN — Bewilderment best describes the response of Irish residents and tourists to President Obama's sharp criticism of American companies for acquiring facilities in Ireland to take advantage of the lowest tax rate in the world.
Some companies were “magically becoming Irish” to exploit the “unpatriotic loophole,” Obama said last week.
In the words of a pro-business Texan on vacation here, that smacked of typical “Chicago-style politics” by Obama to thwart efforts by American companies to boost profits legitimately rather than pay higher taxes at home.
“To me, it's common sense,” said Tim Lyman of Austin, a territory manager for Stanley Black & Decker. “American companies want to support America. They also want to make money.”
The United States could lower its 35 percent rate, Lyman said. In Ireland, the corporate tax rate is 12.5 percent.
Despite several other countries offering low rates, “the only country (Obama) mentioned was Ireland,” said Frank Smith, a Dublin actor and tour guide.
The story appeared on the front page of the Irish Times last week, reporting Obama's comments to CNBC and later at the Los Angeles Trade-Technical College.
The Irish paper quoted Irish government officials as saying it's a problem for the United States to fix.
During the past few years, companies have purchased facilities or merged with those in Ireland and other low tax-rate countries such as Switzerland and the United Kingdom.
Obama urged Congress to change tax law, saying the lost revenue contributes to the nation's budget deficit.
Dubliner Lorcan Collins, a historian and author, defended the choice of Ireland for major American facilities.
“They need a European headquarters somewhere. Why not here, in an English-speaking country?” said Collins, founder of the 1916 Rebellion Walking Tour. “The population is highly educated, and there's a diligent workforce.”
Collins would love to see companies such as Google, which has its European Union headquarters in Dublin, pay more in taxes. But if American companies are going to seek lower rates, Ireland might as well be the choice, he said.
“Do you go to Sweden or do you come to Ireland, which has emigrated people to the U.S. for 150 years?” Collins asked.
Fernanda Madeiros, 32, a server at Temple Bar in the heart of Dublin, essentially agrees with Obama. A native Brazilian working part-time in Ireland, Madeiros said big companies are “where all the money is. I think they should pay the higher rate.”
American companies should not be allowed to take advantage of lower tax rates in other countries, said Madeiros, a journalism student.
Back in the United States, David Taylor, executive director of the Pennsylvania Manufacturers Association, said the American tax rate for businesses is the “highest rate on Earth.”
“The tax rate in Ireland is the lowest among developed countries for trading (business) income,” said Bob Willens, a tax expert and publisher of the Willens Report in New York City. “They've long been known as a tax haven.”
He estimates no more than 100 American companies have merged or made financial moves to low tax-rate countries, including Ireland, since 2004.
Willens doubts Congress will act soon. Obama seemed to strike a political chord for Democrats to “exploit in the mid-term election” in November, Willens said.
Smith, guide of a literary walking tour for tourists, hopes it all blows over. “It would be disastrous” for Dublin's economy if Google pulled out, he said.
When Ireland joined the EU in 1973, there was enormous pressure to raise the tax rate, Smith said. Ireland's government said it was nonnegotiable, he added.
If the United States and the EU pressure Ireland to raise the rate, Ireland should respond by making the republic a “tax-free zone” — and watch companies flock to the Emerald Isle, he said.
The Associated Press contributed to this report. Brad Bumsted is Trib Total Media's state Capitol reporter. He can be reached at 717-787-1405 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Injuries to Penguins’ Ehrhoff, Letang force defense to pick up slack
- Former Pa. Gov. Corbett: From pension critic to collector
- Reversing the field: Pirates continue to raid Yankees for hidden skill
- Trench collapse traps Butler County worker
- Five is enough for Penguins’ defensemen
- Man decorating Scranton-area family grave is killed by falling headstone
- Steelers’ Tomlin, Pirates’ Hurdle share similar philosophy
- Pgh. International leader strives to inject Pittsburgh flavor into airport
- Recent early retirements in NFL could be trend — or simply a coincidence
- Pirates notebook: Locke the choice to be 5th starter
- Ohio governor Kasich, a McKees Rocks native, considers presidential run