Whenever anyone questions whether a low corporate tax rate is good for the economy I have always pointed to Ireland.  In the sea of high taxes (corporate and otherwise) that is Europe, Ireland has become a beacon of minimalism in corporate taxes.  The results speak for themselves.

From the Cato Institute:

In 1987 the Irish Republic's per capita income hovered at 63 percent of the United Kingdom's. From 1990 to 1995 Ireland's economy grew at more than 5 percent per year and from 1996 to 2000 it raced at more than 9 percent a year. Today, Ireland's $25,500 per capita income bests the United Kingdom's per capita average by $3,200.

Ireland's econmic growth is expected to be 6% this year. 

What caused this radical shift for the better?  Among other things, Ireland decreased tax rates - including corporate rates.

Well, if you don't believe pesky little statistics how about the observations of Ireland's first billionaire, Tony O'Reilly.  From the Times Online:

O’Reilly’s view is that the main reason for the Irish economic “miracle” has been the low level of corporate tax in Ireland. He is working to persuade the UK Government to reduce the rate of corporation tax in Northern Ireland to that of the south; that is, from the UK’s 30 per cent to the Republic’s 12.5 per cent. He comments that the Irish miracle is not “because the pubs are great, the golf is great and the climate is, well . . . the fact is, its tax.”

This is, indeed, one of the political truths that politicians ignore at their peril. O’Reilly’s “the fact is, its tax,” is just as valid as Bill Clinton’s “it’s the economy, stupid”. 

Now imagine if the U.S. not only matched Ireland, but exceeded them, by implementing the FairTax, which would eliminate all corporate income taxes.  Everyone from Dublin to Hong Kong would not be able to ignore our dramatic economic growth - and the new jobs it creates.

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This entry was posted by Brian on Tuesday, June 13th, 2006 at 10:27 am and is filed under FairTax, International, News & Opinion, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Please note the copyright policy.