Ahern’s plea

Ahern was speaking at the Joseph F. Maher Leadership Forum at Molloy College on Long Island.
And while the subject of his formal speech to the packed gathering was Northern Ireland a decade after the Good Friday agreement, Ahern addressed economic concerns when, as a member of a subsequent panel of speakers, he answered a question about possible effects on the Northern peace process from a long lasting recession.
Ahern, referring specifically to the Republic, said that one thing Ireland didn’t need right now was a change in tax policy.
“That would crucify us,” he said.
The Obama administration wants to harmonize corporate tax rates that apply in the U.S. with rates levied by overseas government. The Irish government had long used a relatively low rate to attract American companies.
This is actually highlighted on a U.S. State Department website “country” report on Ireland
“One of Ireland’s most attractive features as an FDI (foreign direct investment) destination is the low corporate tax rate,” the website report states.
“Since January 1, 2003, the corporate tax rate for both foreign and domestic firms has been 12.5 percent. Foreign firms that established an Irish presence prior to this date retain their entitlement to the ‘old’ 10 percent rate until 2010 in the case of manufacturing and certain internationally traded services,” the report adds.
“Ireland’s corporate tax rate is among the lowest in the EU, and the Irish Government continues to oppose proposals not only to harmonize taxes at a single EU rate, but also to standardize the accounting methods used by EU Member States to calculate corporate taxes.”
During his tenure as taoiseach, Ahern’s government presided over the unprecedented economic boom that gave birth to the Celtic Tiger.
Many credit the tiger’s birth in significant part to the arrival of hundreds of American firms attracted to Ireland in large part due to the favorable tax rate.
When he meets with President Obama in the White House on St. Patrick’s Day, Ahern’s successor, Brian Cowen, is expected to lay out a case for Ireland to be treated sympathetically at a time of economic stress that is as unprecedented as the boom that the new hard times have succeeded.
Even despite the continued favorable tax levy, some U.S. companies are already heading for Ireland’s exits. Texas-based Dell Computers recently moved most of its Irish operation to Poland, where labor costs are significantly cheaper.