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Originally Posted by Micah Foehammer
I'm not sure how proximity matters given such a large disparity in the corporate tax rates.
Given the choice of 12.5% versus 26% the slightly lower labor costs in the UK wouldn't seem to be that much of a driver for a US corporation or EU companies for that matter to preferentially locate in the UK versus Ireland or (Switzerland for that matter).
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This was my initial feeling too. It's covered on the news in the UK & Ireland quite a bit as a hotbed issue. From what I have seen and heard, proximity is a factor when the HQ is located an hour or so across the ocean. If they want an office as close as possible to Ireland for example, they have no choice but to go to the UK to perhaps route orders via Heathrow etc. So England gets a cut of the action. Not a big cut, but a cut due to being the closest proximity to Ireland. A relucant benefit maybe. This is all gleaned from talking to friends who are vendors or listening to news and radio of how the UK is getting some trickle-down benefit from Ireland's uniquely low rates.
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I don't follow this closely. Do you have some details on what sort of changes were made? I do know that the government of Ireland refused to consider raising the corporate tax rate despite the furor.
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I try to not follow it closely as we are mindnumbed by the thing via the media. I could find them if you are really curious - probably somewhere on the official Irish Gov site. I follow this via the TV and radio mostly rather than reading about it on websites. Like I said it was a big issue at one point like a year or more ago and most of us are so burned out hearing about it. From what I recall, Ireland refused to raise it's super-low corporate rate in the face of EU opposition. Many argued that it would discourage these businessess from springing up and they would just go elsewhere (which some have). So the main proposal was turned down, but in the wake of a troubled economy something needed to be raised and I think they did a bit of a number on these corps and enacted some new laws. IIRC there was even a public vote on it. (in Ireland we vote on EVERYTHING so you lose track of what the issue is this week and what the signs are referring to on this day).
But anyways, there was then talk that while the official rate was not altered, some other laws were put in place to squeeze some money out of these large corporations. It used to be a topic on talkshows, where CEO's would be interviewed and acknowledge that while at first glance the rate remains untouched, they still wind up with slightly more to pay. Still quite coveted, but I think a bit more expensive than it was. I could probably hunt the laws down with some time but my understanding of it is jaded at best.