Monday 18 December 2017

Increased capital spending needed to counter Trump’s tax cuts – Ibec

US president Donald Trump
US president Donald Trump
Ellie Donnelly

Ellie Donnelly

Ibec has said that the Irish government should increase spending in education and display greater ambition in a capital infrastructure programme to counter US president Donal Trump’s tax cuts.

“Domestically, the best response to President Trump’s announcement is to ramp up investment in our education system, increasing our attractiveness to high skilled workers and for government to show much greater ambition in a capital infrastructure programme,”Ibec's drector of policy and public affairs, Fergal O'Brien said.

The group that represents Irish businesses also said that, should Trump’s tax plans be passed in full, they could provide some competitiveness pressure for Ireland, however the implications would be much less serious than if earlier proposals had progressed.

Read more: Dan O'Brien: How Ireland's economy has dodged two potential bullets - for now

“Even if the US succeeds in delivering a substantial rate cut, the proposition for US firms to invest in Ireland remains compelling. Fundamentally, the majority of US firms use Ireland as a platform to access the EU and other international markets. This will remain the case no matter what the US tax rate is,” O’Brien said.

“Our tax rate remains important in the competition with other investment locations but clearly it is only one of a number of factors, such as talent, ease of doing business and cost competitiveness, which influence investment decisions,” he said.

The White House on Wednesday unveiled plans for massive tax cuts for businesses, middle class, and the wealthy, however details regarding when the tax cuts will be implemented were not revealed.

Read more: Trump pledges to cut US corporation tax to 15pc- but fails to explain how

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