Saturday 3 December 2016

Ireland Inc may be a big loser in race for the White House

Promises of deep and radical changes to the US corporate tax regime pose a significant threat to investment in Ireland

Published 08/05/2016 | 02:30

Trouble ahead: US presidential candidate Hillary Clinton speaking in Washington last week Photo: Getty Images
Trouble ahead: US presidential candidate Hillary Clinton speaking in Washington last week Photo: Getty Images

Ten long weeks of government formation have produced an enormous list of concessions on public spending. The Independent deputies must feel they have been negotiating with the Make-a-Wish Foundation. A rough costing (remarkably there is none in the documents that have been released) puts the bill at €3bn in annual cost and leaves the State's finances ever more exposed to whatever problems are coming down the track. The problems in Europe, including the risk of Brexit and the continuing travails of the common currency, are not the only ones. The biggest threat to long-term recovery in Ireland could be coming from the west.

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The next US president will be either Hillary Clinton or Donald Trump. If you fancy a wager Clinton is heavy odds-on: bet €5 and you would win only about €2. Trump is around 9 to 4 against. You can have any price you like about the other possibilities. The odds are saying that Clinton is the likely winner, a Trump victory is possible while the other nomination-seekers in the Democratic and Republican parties have no chance left.

Ireland's industrial strategy has been built for decades around inward direct investment and the core attraction is a low tax rate on corporate profits. The nominal rate in the US works out at 39pc (combining federal and state impositions), but averages around 25pc in many European countries and just 12.5pc in Ireland.

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