US multinationals 'more likely to stay in Ireland than go' even if Trump slashes corporation tax rate
Even if America drops its corporate tax rate as a senior economic advisor to Trump has said, it may not have an immediate effect on Ireland.
Donald Trump's senior economic advisor Stephen Moore has warned they will drop their corporate tax rate to compete with us.
Speaking in a BBC interview yesterday, he said they would cut their headline tax rate for companies from 35% to just 15% to encourage them to locate in the States.
He said: "I believe that when we cut these tax rates – we’re going to cut our business tax rate from roughly 35% down to roughly 15%- 20% – if you do that you are going to see a flood of companies leaving Ireland and Canada and Germany and France and they are going to come back to the United States,” he said. “It is going to have a very high impact on jobs.”
Managing partner at financial firm PWC Fergal O'Rourke said the changes probably would not make companies leave here , but may deter more from coming.
He said: "I think we're going to see (the companies) pressing the pause button for the next few months, but from a tax perspective the incentive will be NOT to move out, just to stay where they are."
Earlier, Dr Declan Jordan in UCC's Department of Economics said the touted reduction in corporation tax was in fact unlikely to lead to the return of multinationals to the US, and would actually worsen the country's economic outlook.
He said that while the reduction to 15% "sounds vaguely reasonable, it ignores the manner in which multinationals avoid taxation.
"In Ireland we are especially worried about this proposal, as we fear it will undermine our taxation advantage. It doesn’t, and when we consider that large multinationals have effective taxation rates much lower than the nominal 12.5% it’s hard to see how it would."
