Fears for Irish industry as US Senate slashes taxes

IRELAND could soon become less attractive for American businesses after US president Donald Trump succeeded in slashing his country’s corporate tax rate.

Under the bill, pushed through the US Senate early yesterday, the American corporate tax rate is set to drop from 35% to 20% – bringing it much closer to Ireland’s nominal 12.5% – in an effort to encourage manufacturing jobs back to the US. The proposed legislation also provides that all future foreign profits of US based firms would be mainly exempt from tax.

The Industrial Development Authority, which is tasked with attracting foreign investment into the Republic, promotes Ireland to US businesses by saying tech firms can hire two engineers in Ireland for the price of one in Silicon Valley. With such a dramatic drop in the American tax rate, that claim may have to be revised.

Mr Trump raised eyebrows in October when he bizarrely claimed to have ‘heard that Ireland’s going to be reducing their corporate rates down to 8% from 12… we can’t be at 35% and think we’re going to remain competitive in terms of companies and in terms of jobs.’

The remark was met with astonishment from Government officials here and Taoiseach Leo Varadkar accused Mr Trump of circulating ‘fake news’ – a charge the billionaire president regularly levels at others. Stephen Moore, a former economic adviser to the US president, has blamed the loss of US businesses to many countries, including Ireland, on the US having ‘the highest business tax rate in the world’. Meanwhile, Mr Trump hailed the bill’s passage on Twitter, thanking US Senate majority leader Mitch McConnell and Senate finance committee chairman Orrin Hatch, R-Utah. ‘Look forward to signing a final bill before Christmas!’ the president wrote.

‘We’re going to remain competitive’